[HANOI] Vietnam has reached an agreement to sell 240,000 tonnes of rice to Malaysia, although the small volume and an eight-month loading schedule mean grain export prices will stay near multi-month lows, a state-run newspaper and traders said on Monday.

The country will ship the five per cent broken rice to Malaysia over April to November, the Vietnam Economic Times newspaper said, coinciding with the peak for Vietnam's main winter-spring crop harvest that is expected to provide more than 5 million tonnes of unhusked rice mostly for export.

An official at the Vietnam Food Association, which oversees the country's rice exports, declined to comment on the deal with Malaysia, the third-biggest buyer of Vietnamese rice after China and the Philippines.

While the report did not give any detail on the deal price, a Vietnamese private trader estimated that both sides may have agreed to a price of US$385 a tonne, free-on-board (FOB). "Vietnam has yet to publish the price of the deal as it is still eyeing a demand from the Philippines," another rice exporter said.

The Philippines plans to import up to 500,000 tonnes for delivery between March and May to boost stockpiles and might go for a government-to-government deal, government and trade sources said last week.

The price for Vietnam's five per cent broken rice fell to US$358-US$360 a tonne on Monday, FOB, from US$360-US$370 last week. The lower end of the range is the weakest price for the grain since mid-September, 2013, Reuters data shows.

Traders in Ho Chi Minh City said they do not see any upside to Vietnamese rice export prices from the deal with Malaysia given its long loading duration. Malaysia took 470,000 tonnes of Vietnamese rice in 2014, up 1.5 per cent on year. "With some 30,000 tonnes to be shipped per month (April-Nov 2015), this small volume will not affect the market supply and prices," said a trader at a foreign firm in Ho Chi Minh City.

REUTERS