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Thursday, 24 May 2012 00:54 - - {{hitsCtrl.values.hits}}
BANGKOK (Reuters) : Thai rice prices slipped this week on the prospect of fresh supply flooding into the market although demand from Iraq provided some support, while Vietnamese prices continued to fall as loading demand subsided, traders said on Wednesday.
Benchmark 100 percent B grade white rice of Thailand, the world’s biggest rice exporter, was at $630 per tonne, down from last week’s $640, which was the highest in seven months. The 5 percent broken grade was at $610 per tonne, down from last week’s $612.
Thai prices have been pushed up by a government intervention scheme, which has left little grain in the market for exporters.
They are likely to fall further in the next few months because of fresh supply from an off-season crop of 2-4 million tonnes due to be harvested in July.
The intervention scheme ends in June and it is not clear if the government will extend it since it has limited warehouse space, with stockpiles at a record high of 13.9 million tonnes of paddy.
“Prices were on a downward trend. However, demand from Iraq will help support prices, at least for a short time,” said a Bangkok-based trader.
Iraq’s state grain board has purchased 100,000 tonnes of rice in an international tender, of which 70,000 tonnes was from Thailand and 30,000 tonnes from Uruguay.
The main Thai suppliers to the Iraqi market are normally Asia Golden Rice, Capital Rice and Chaiyaporn, traders said.
“Shipment is expected to be done by July and after that prices could fall again as there’s no demand and supply is about to rise,” said Wanlop Pichpongsa of Capital Rice, who confirmed Capital supplied part of the order.
Thailand, is struggling to sell its grain because the intervention scheme has pushed prices up to uncompetitive levels. It has exported just 2.6 million tonnes of rice so far this year, down 42 percent from the same period in 2011, when it had sold 4.5 million.
Even so, the government still reckons its target of 9.0-9.5 million tones is feasible and is confident it can secure government-to-government deals to boost exports in the second half of the year, using grain from its stockpiles.
In Vietnam, the second-biggest exporter, prices also fell due to an absence of demand, even though the Philippines said it would seek Vietnamese or Thai grain at a tender, traders said.
Its 5 percent broken rice eased to between $420 and $440 a tonne, free on board Saigon Port, from $430-$450 last Wednesday.
The 25 percent broken grade was quoted at $380-$390 a tonne versus $390 a week ago.
“Loading demand is waning and there is very weak commercial demand,” a Vietnamese exporter in Ho Chi Minh City said.
The next harvest of the summer-autumn crop is due to start in July in the Mekong Delta food basket.
The Philippines said on Tuesday it would seek 100,000 tonnes of rice from either Vietnam or Thailand, and may open a tender later this year for another 20,000 tonnes.
“This volume is too small for Vietnam’s export capacity,” another trader said, adding prices would not change even if Vietnam was picked.
Last year Vietnam exported a record 7.2 million tonnes of rice and the country’s agriculture minister has said shipments in 2012 would match that, although industry officials forecast volume could drop to 5.4 million.
