Vietnam, the world's second-largest exporter of rice has dashed any hopes of a significant reduction in rice prices in the short term as the Vietnamese government has decided to impose a minimum export price of $800 PMT for new contracts.

The minimum export price comes after the government lifted its ongoing export ban on the signing of new export contracts that was imposed earlier this year.

Vietnam is expected to export 4 million MT of rice this year, but traders said the country is capable of exporting up to 4.5 million MT due to a strong domestic supply.