The decision was made last week when global rice prices reached US$325 a tonne.

"Domestic rice exporters have so far this year signed export contracts for nearly four million tonnes, which is the country’s 2007 export target," said Tan.

Though the country currently has a million tonnes of rice in inventory, it is only enough to ensure food security for the year, said Tan.

The agriculture ministry is concerned that paddy production this year may be hit hard by recent natural disasters and brown hopper infestations. A recent storm damaged more than 60,000ha of paddy fields.

Rice production, though, is down by about 200,000 tonnes compared to the same period in 2006, according to ministry statistics.

Viet Nam, the world’s second largest rice exporter, exported nearly 3.6 million tonnes of rice worth roughly $1.2 billion in the first eight months of 2007, down 4.8 per cent in volume but up nearly 13 per cent in value over the same period last year.

Shipments to the Philippines, Malaysia and Cuba accounted for roughly 60 per cent of total exports in 2006.