Demand for Vietnam rice up; Japan may resume imports

* Bangladesh in process of buying 200,000 tonnes

* Japan may seek 250,000 tonnes from Vietnam-media

* Mekong Delta's paddy prices rise 4 percent

* Harvest of the biggest crop to end this month

By Ho Binh Minh

HANOI, April 5 (Reuters) - Demand for Vietnamese rice is strengthening, with deals totalling over 1 million tonnes sealed in recent weeks, while Japan may resume imports of the grain from the Southeast Asian country, state media and traders said.

The possible return of Japan, once a frequent buyer of Vietnamese rice, and Bangladesh's plan to sign another contract, put Vietnam on track to grab a bigger share of the global rice market from top exporter Thailand.

The new export contracts -- 250,000 tonnes for Cuba, 200,000 tonnes each for the Philippines and Bangladesh, and 400,000 tonnes for Indonesia -- helped support rice prices even as Vietnam's top rice crop harvest is ending in the Mekong Delta. [ID:nSGE72M00K] [ID:nHAN385762]

Harvest pressure has kept Asian benchmark Thai white rice RI-THWHB-P1 at $490 a tonne, less than half the peak level of the 2008 food crisis and a decline of 10 percent so far this year.

The deals would make up nearly 17 percent of Vietnam's annual export target of around 6 million tonnes this year, after the world's second-biggest rice exporter shipped a record of 6.83 million tonnes in 2010.

Vietnam Food Association Chairman Truong Thanh Phong was quoted by state-run Vietnam Agriculture newspaper on Tuesday as saying Japan may remove a ban on imports in place for several years and buy 250,000 tonnes of Vietnamese rice.

Phong and other officials from the association could not be reached for comment.

A Japanese farm ministry official said he was not aware of the reported rice volume that Japan may import from Vietnam, adding that Japan has sufficient reserves and there was no concern about supply.

His comments echoed those by a senior economist at the United Nations' food agency late last month, who said the earthquake and tsunami which hit Japan on March 11 were unlikely to cause major damage to rice and other grain crops. [ID:nLDE72L21O]

Japan stopped buying Vietnamese rice in 2009 after finding high levels of pesticide residue, the Agriculture Ministry-run newspaper added.

But several traders told Reuters that Vietnam might have made its last rice shipment to Japan in 2007.

The Japanese official said there had been no bids to sell Vietnamese rice at Japanese government auctions since the contaminated rice was found, but added that Japan had not imposed any ban.

DEALS WITH CUBA, BANGLADESH

Cuba, a major Vietnamese rice buyer, bought 250,000 tonnes under a government deal, the official Nguoi Lao Dong (Labourer) newspaper quoted Chairman Phong as saying.

Cuba's statistics office said in January that rice output last year dropped 12.2 percent from 2009 to 247,400 tonnes, affecting efforts to cut imports of one of the country's main staples. [ID:nN07198016]

Hanoi-based Vietnam Northern Food Corp, which has been in charge of handling government deals for the Latin American country, sold 400,000 tonnes of rice to Cuba in 2010.

Bangladesh will ink an agreement to buy 100,000 tonnes of white rice from Vietnam at $530 a tonne, cost-insurance-freight (CIF) basis, after concluding a government deal to import 100,000 tonnes of parboiled rice at $575 a tonne, CIF, an official said. [ID:nSGE73400U]

The parboiled rice price is higher than Bangladesh's last purchase from Vietnam, but less than the $580 a tonne, including cost and freight but excluding insurance, which Bangladesh paid for the same grade from Thailand.

PRICES RISING IN VIETNAM

Paddy prices in the Mekong Delta food basket have increased 4 percent in the past week to 5.7-5.8 million dong ($274-$278) a tonne thanks to loading demand for recent contracts, the food association said in its weekly report.

Farmers in the Delta have harvested 62 percent, or 965,000 hectares (2.38 million acres), of the winter-spring crop as of March 30, the report said.

The harvest, the country's largest and mostly for export, is expected to provide 3 million tonnes of milled rice for shipment.

Vietnam's rice exports between January and March rose 17 percent from the same period last year to an estimated 1.69 million tonnes, the government has said.

April 5^th, 2011

Source: Reuters