Vietnam buys Indian rice for first time in decades

MUMBAI/HANOI - Vietnam, the world’s third biggest exporter of rice, has started buying the grain from rival India for the first time in decades after local prices jumped to their highest in nine years amid limited domestic supplies, four industry officials told Reuters.

The purchases highlight tightening supplies in Asia, which could lift rice prices in 2021 and even force traditional buyers of rice from Thailand and Vietnam to switch to India - the world's biggest exporter of the grain.

Indian traders have been contracted to export 70,000 tonnes of 100 per cent broken rice for January and February shipments at around $310 per tonne on a free-on-board (FOB) basis, the industry officials say.

“For the first time we are exporting to Vietnam,”

B.V. Krishna Rao, president of the Rice Exporters Association, told Reuters on Monday. “Indian prices are very attractive. The huge price difference is making exports possible.”

Dwindling supplies and continued Philippine buying have lifted Vietnamese rice export prices to a fresh nine-year high.

Vietnam's 5 per cent broken rice is offered around $500-$505 per tonne, significantly higher compared to Indian prices of $381-$387.

The shrinking supplies will heighten concerns about food insecurity with sub-Saharan Africa among the areas where import demand has been increasing due partly to population growth.