HANOI/MANILA, June 18 (Reuters) - Vietnam has lifted a ban on rice exports, signalling improving supplies on the world market, while the Philippines completed its purchases for the year with a deal to buy 600,000 tonnes of Vietnamese grain.
The twin moves could speed a recent decline in international rice prices from record highs -- prices had nearly trebled this year -- helping to ease food inflation and boosting supplies of the staple in Asia.
But traders added that prices were unlikely to crash as a ban by India remained in place, while output from the new crops in leading producing nations was yet to arrive on world markets.
Vietnam lifted its ban on the signing of rice export deals, saying it would only allow contracts for a limited quantity as it caps exports of the grain in the first nine months of this year at 3.5 million tonnes.
And Manila’s $564 million purchase of 600,000 tonnes of rice from Hanoi in a government-to-government deal takes the world’s largest rice importer out of the market until possibly the end of the year, when it may start stocking up for 2009.
“There are signs of improving supplies but we still have a few bullish factors,” said one trader.
Thai benchmark rice prices RI-THWHB-P1 fell 3 percent to $795 a tonne, free on board, in the week to Wednesday, down around 26 percent from a record peak of $1,080 hit in April.
Traders in Manila scoffed at the price of $940 a tonne, including cost and freight, the Philippines paid for its latest shipment, largely composed of the 25-percent broken variety.
The price was far above the floor price of $800 a tonne, free on board, that Vietnam, one of the world’s top three rice exporters, set on Wednesday for commercial traders selling higher quality 5-percent broken rice.
“If it’s that disadvantageous, they should not have pushed through, they could have just gone back to the market and held a tender,” said one dealer who declined to be named.
“If they don’t like the prices, they can just reject, at the end of the day they have the final say.”
But Manila, spooked about food security due to export bans by producer nations, was in a hurry to boost its stockpile of rice during a traditional lean period in the third quarter.
Wednesday’s price was 17 percent below what it paid at the last successful tender in April.
Including Wednesday’s purchase, Manila has spent around $1.54 billion buying 2.3 million tonnes of its national staple, its biggest purchase since 1998 when it imported 2.4 million tonnes.
Vietnam said it would allow export contracts of up to 3.5 million tonnes until the end of September, the second major rice exporter to lift a ban intended to help dampen soaring domestic inflation but which instead triggered panic around the world.
Vietnamese companies can now sign new deals for “several thousand tonnes” with a minimum price of $800 per tonne, on a free-on-board basis.
But adding in the 600,000 tonne deal with the Philippines, Vietnamese exporters would only be able to sell another 700,000 tonnes between now and the end of the third quarter.
Hanoi has said the rice export quantity for the whole of 2008 would be adjusted after Vietnam completes January to September shipments and more details of the country’s rice production are available.
The Mekong Delta farmers are due to see their harvest peak early next month.
In May, Cambodia lifted its ban on foreign shipments of rice but prices of the grain are unlikely to drop dramatically before India, the world’s second-largest rice exporter last year, lifts its curbs. (Additional reporting by Rosemarie Francisco in Manila and Apornrath Phoonphongphiphat in Bangkok) (Reporting by Carmel Crimmins; Editing by Sambit Mohanty)