Food association advises rice exporters against price cuts

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The Vietnam Food Association has asked local rice exporters not to cut their prices as supplies of the grain on the world market are lower than expected.

Exporters are being told to set their prices at no lower than US$475 per ton for 5-percent broken rice, Vietnam's highest quality variety. The minimum price for 25-percent broken rice is $435 per ton.

Many businesses want to lower prices to attract buyers more easily, but market trends are now favorable for Vietnamese rice, said Pham Van Bay, vice chairman of the association.

The minimum prices set by the association are reasonable, considering that the production costs for the 5-percent broken variety has reached $460 per ton, Bay said.

Vietnam exported 5.4 million tons of rice in the first nine months, up 8.51 percent from the same period last year. The country has set a target of shipping 6 million tons of rice this year. The food association said there are 1.2 million tons available for export in the remaining months.

The United Nations' Food and Agriculture Organization in late August revised its forecast for global rice production in 2010 downward to 467 million tons, 5 million tons lower than of the previous projection in June.

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