Asia rice: Vietnamese prices up on Philippines’ tender, China demand

Thursday, 24 April 2014 00:04 - - {{hitsCtrl.values.hits}}

Vietnam expected to win Philippines tender
Traders view Vietnamese price rise as uncompetitive
China trade smooth, despite Vietnam crackdown on trucks
African buyers seek Thai rice after govt sales

REUTERS: Vietnamese rice prices rose on Wednesday on expectation it would win a Philippine’s rice tender and supported by demand from China, but the hike was viewed by traders as uncompetitive and may leave Vietnamese grain vulnerable to Thai rice sales. State-owned exporters Vinafood 1 and Vinafood 2 are poised to win deals to supply 800,000 tons of rice to the Philippines after submitting the lowest bids in a tender last week.

Vietnam’s 5% broken rice rose to $ 390-$ 395 a ton, free-on-board basis, from $ 380-$ 390 last week. While its 25% broken rice edged up to $ 365-$ 370 a ton, from $ 360-$ 365 a week ago. The same grade 5% broken rice from Thailand was offered at the same level of $ 390-$ 400 a ton, traders said. Vietnam’s price rise has made its grain uncompetitive against Thai rice in the eyes of traders, as Vietnamese prices have for decades been offered at around $ 30-$ 50 a ton lower than Thai prices. “More buyers from Africa and the Middle East are asking for Thai rice as prices are lower,” one exporter said. Vietnamese prices were also supported by demand from China, its main buyer, which last bought through border trade. Traders said truck drivers, faced with a Vietnamese Government crackdown on overloaded trucks, are either following the new rule or taking shortcuts to avoid weight check-points. The crackdown that began on 1 April, lead to a pile-up in grain supplies and softer prices. “Prices are rising, showing that sales to China are smooth now, and also on hopes that Vietnam winning a tender in Manila,” a second trader said. Thailand could win a tender to sell 30,000 tons of rice to Iraq as the offer was the lowest of around $ 481 per ton CIF basis, traders said. Traders said African buyers were seeking parboiled grade Thai rice as prices were competitive after the Government offloaded more stocks to fund a guaranteed price to farmers. “Buyers from Africa booked Thai 100% parboiled grade white rice at $ 420 per ton for prompt shipment,” said a Bangkok-based trader. The Government said it would sell around 800,000 tons to 1.0 million tons of rice from stocks to raise money to pay farmers, many of whom have been waiting for months to be paid after selling their rice to the state. “Prices will drop eventually because supply is rising as the Thai Government says it will sell more rice. But, no one knows how big the drops would be,” another Thai trader said.