Rice buyers turn to Vietnam as prices stay firm in Thailand, India
Buyers of Asian rice turned to Vietnam this week as prices remained firm in Thailand and India, traders said on Thursday.
Thai benchmark 5-percent broken rice RI-THBKN5-P1 edged up to $387-$392 a tonne, free-on-board (FOB) Bangkok, from $380-$390 last week.
“Some ships are still loading,” said a trader in Bangkok. Thai prices went up last week as exporters rushed to fill shipments amid a slow off-season harvest.
Prices are expected to remain high for the next one to three weeks, traders said.
Trade will likely stay subdued as rice-consuming countries in the Middle East prepare to observe the Islamic holy month of Ramadan, during which Muslims around the world will be fasting.
Ramadan begins on May 26 and ends on June 24 this year.
Thailand’s commerce ministry said on Thursday it will hold the second state auction of the year on May 24 for 1.82 million tonnes of rice.
Vietnam’s 5-percent broken rice RI-VNBKN5-P1 was quoted at $355-360 a tonne, FOB Saigon, up from $350-$352 last Thursday on more active trade.
“Thai prices increased further, so importers turned to Vietnamese rice,” said a Ho Chi Minh-based trader.
Vietnam shipped an estimated 1.84 million tonnes of the grain between January and April, down 8.8 percent from the same period last year.
Thailand and Vietnam are the world’s second and third biggest rice exporters.
In India, the world’s biggest rice exporter, prices of 5-percent broken parboiled rice RI-INBKN5-P1 were steady at $394-$399 a tonne this week as export demand remained weak amid a rally in local paddy prices.
“Overseas buyers are not ready to pay more than $390 and Indian exporters couldn’t cut prices due to rising paddy prices,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.
“Buyers are shifting to other producers like Vietnam.”
Local paddy prices are rising due to limited supplies and aggressive buying by state-run agencies, dealers said.
The Indian government buys rice from local farmers at a fixed price to supply subsidised food and meet any emergency needs such as a sudden spike in prices.
An appreciating rupee is also making it difficult for exporters to reduce prices, said another exporter based in Kakinada.
The rupee has risen more than 5 percent so far in 2017, trading near its highest level in 21 months. A stronger rupee trims returns of exporters.
India mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East.
Bangladesh said this week it will import 600,000 tonnes of rice, parts of which will be from the world’s top three exporters through government-to-government deals.