Vietnam halts new rice export contracts as it reviews stocks

A Vietnamese farmer works on her terraced rice field in Pu Luong on Feb 29, 2020. (Reuters photo)

HANOI: Vietnam will not sign any new rice export contracts until Saturday at the earliest as it checks whether it has sufficient domestic supplies to cope during the coronavirus outbreak, the government said in a statement on Wednesday.

Vietnam's rice exports rose 4.2% last year to 6.37 million tonnes, making it the third largest exporter in the world after India and Thailand. The largest buyers of Vietnam's rice include the Philippines, China and countries in Africa.

Prime Minister Nguyen Xuan Phuc has told the ministries of trade, finance and agriculture to review the country's rice stocks and submit a report on supplies and exports by Saturday, according to the statement.

"While waiting for the report from the working group, the signing of all new rice export contracts will be suspended, and those contracts that have already been signed will be dealt with after the report is available," the government said.

The ban would be in force until after the report was submitted on Saturday, it said.

"This move by Vietnam is causing a lot of attention in the international market, a European rice trader said. "If food exporting countries start limiting supplies to secure their own food security this would be of very great concern."

In a separate statement on Wednesday, the Ministry of Industry and Trade said Vietnam's rice exports in the first two months of 2020 rose 31.7% from a year earlier to 928,798 tonnes.

"If exports keep rising at this pace, Vietnam would face the risk of shortages for domestic consumption," it said.

The ministry said it would hold a meeting with the country's key rice producers and exporters on Thursday to assess domestic supplies and export contracts.

Vietnam has reported 134 cases of the coronavirus but no deaths, according to the health ministry. More than 1,500 suspected cases are in quarantine and being monitored.

The prime minister this month vowed to protect food security during the outbreak, state media reported.

On Tuesday, a government food official told Reuters that Vietnam would continue rice exports, despite reports by state media and customs officials that a government ban on exports had been in effect.

The mixed messages have created confusion in the domestic market, rice traders said.

"We've been worried and confused by the signals from the authorities and have stopped purchasing rice from farmers from Tuesday," a trader based in the Mekong Delta province of An Giang said.