HANOI, Aug 10 - Vietnamese rice companies should make sure they have sufficient stocks to supply the domestic market and avoid any price disruption after unusually big orders from China for up to 600,000 tonnes, officials said.
Traders said buyers from southern China had been buying Vietnamese rice since May to offset a domestic shortfall after severe drought, but their purchases were initially not big enough to push up prices.
However, demand continued into July, when Vietnamese businesses also started buying under a government-backed plan running for two months until Sept. 15 to stockpile 2 million tonnes of summer-autumn paddy to support prices during the harvest.
The Chinese demand could lead to a shortage in Vietnam, Vietnam Food Association Chairman Truong Thanh Phong was quoted as saying in a report on Tuesday on the association's website (www.vietfood.org.vn).
"The Chinese market is an unknown, because we don't know how large their rice shortage is," he said.
Summer-autumn paddy prices in the Mekong Delta have increased to 4,000-4,600 dong (21-24 U.S. cents) per kg this week from 3,400-4,500 dong last week, due in part to the government's stockpiling plan and demand from China and Bangladesh.
The fact that many local buying agents had offered high prices to gather rice for exporting to China is an unusual development, Industry and Trade Minister Vu Huy Hoang was quoted as saying in another report.
He said the stockpiling plan was aimed at ensuring farmers made a profit and guaranteeing food security.
The food association said it had asked members to monitor market developments for the rest of this year to ensure intervention as needed "to avoid rice price fever".
The summer-autumn rice crop in the Mekong Delta is expected to produce up to 9 million tonnes of paddy, but several rice exporters have expressed concern that they may face a shortage due to China's emerging demand.
The food association has raised its forecast for rice exports this year to a record of between 6.4 million and 6.5 million tonnes from an earlier projection of up to 6.2 million tonnes, a state-run newspaper reported on Monday.
Vietnam is the world's second-largest rice exporter after Thailand. ($1=19,090 dong)
