Asian rice prices weighed down

Tuesday, 5 June 2012 00:59 - - {{hitsCtrl.values.hits}}

Demand from the Philippines failed to lift Asian rice prices which are already weighed down by the prospect of rising supplies from major exporting countries and record high stocks held by the Thai government, traders said.

The Philippines’s National Food Authority (NFA) said it was seeking government approval to award a 100,000-ton rice import deal to Vietnam, but traders said the deal was too small to affect the market.

“The deal has no impact on the rice market. I think it is too small to push up prices and demand elsewhere remains thin,” said a Bangkok-based trader.

The 5 percent Vietnamese broken rice eased to $420-$425 a ton, free on board Saigon Port, from $420-$440 last Wednesday. The 25-percent broken grade edged up at $385-$390 a ton, FOB basis, from $380-$390 a week ago.

“Buyers are not around and there have been no transactions on the market to get a benchmark price, so offers are only based on domestic prices,” an exporter in Ho Chi Minh City said. Thai rice prices also fell amid thin trade. The benchmark 100 percent B grade Thai white rice was at $610 per ton on Wednesday, down from last week’s $630, traders said.

Supplies of rice in Thailand and Vietnam, the world’s biggest and the second-biggest exporters, are expected to rise significantly over the next few weeks, traders said. Thailand was due to harvest an off-season rice crop, which farmers in some well-irrigated areas normally grow after they reap the second crop.

“We expect to have around three million tons of extra rice output from the crop, which is due to be harvested in the next few weeks and supply is likely to peak in July,” said a senior Agriculture Ministry official. The Thai Government is also holding record high rice stocks of 13.9 million tons of paddy, which kept prices lower, traders said.

Vietnam, the world’s second-biggest rice exporter, is forecast to export 6.25 million tons of rice this year, the Agriculture Ministry said on Wednesday, an increase of nearly 16 percent from an earlier projection of 5.4 million. Higher domestic output and higher demand are likely to spur the increase in exports, the Ministry said in a monthly report released on Wednesday.

“The import demand for Vietnamese rice from countries such as China, Malaysia, Ivory Coast and Senegal rises from 2011,” the report said, without giving any breakdown of the demand. It forecast Vietnam’s rice export revenues this year could reach $3 billion, down 17.6 percent from $3.64 billion in 2011.

Last month, China displaced Indonesia from its March position to become the biggest buyer of Vietnamese rice, having bought nearly 680,000 tons in the first four months of 2012, the Farm Ministry said in a separate report, marking a more than three-fold increase from 153,000 tons a year ago. Malaysia took second place, with the four-month delivery volume rising nearly 27 percent from a year ago to 258,000 tons, the ministry said.