Asian rice prices were firm on Wednesday, pushed up by demand from the Philippines and Japan, with renewed government intervention in Thailand lending additional support, exporters said. In Vietnam, the world's second-biggest rice exporter, export prices rose around 5 percent from last week due to strong demand from the Philippines, which needs to buy more rice as its own crop was damaged by typhoon weather, traders said.
The 25 percent broken grade rice price rose 5.5 percent, or about $20 per tonne, to $390 a tonne, free on board Saigon Port, compared with last week's $370 per tonne. The 5 percent broken grade rice rose to $440 per tonne from $420 a tonne last week. "With closer trade ties between Manila's NFA and Vietnamese exporters, Vietnam is likely to win a big portion of the 250,000 tonne Philippine rice tender," a Bangkok-based trader said, referring to the National Food Authority, which oversees Philippines rice imports.
Vietnam could supply as much as 170,000 tonnes after the tender on November 4 because of its lower prices and ample stocks following a big harvest last month in the Mekong Delta, traders said. The Philippines has imported 1.775 million tonnes of milled rice this year, the bulk of it from Vietnam, versus a record 2.3 million tonnes in 2008.
The Vietnamese government said on Tuesday that rice exports in the January-October period jumped nearly 33 percent from a year ago to 5.34 million tonnes. It aimed to sell a record 6 million tonnes this year, but traders said demand from the Philippines could push exports as high as 6.3 million.
JAPANESE DEMAND In Thailand, the world's biggest exporter, rice prices were steady to higher, helped by demand from Japan, traders said. The price of benchmark 100 percent B grade white rice was unchanged at $520 per tonne, but premium grade 100 percent fragrant rice rose to $870 per tonne from last week's $820.
"Thai exporters have been buying rice in a bid to secure supply for delivery to Japan during the last quarter of this year and that helped support domestic prices," a Thai exporter said. Domestic paddy rice rose to 8,400 baht ($251.3) per tonne, from last week's 7,500-8,000 per tonne, millers said.
Japan held a tender last week to buy 25,000 tonnes of rice and will hold another on October 30 to buy 75,000 tonnes. Domestic Thai rice was also supported by state intervention after the government said it would step in to buy grain direct from farmers again in a bid to prop up prices during the harvesting period.
The government had planned to end its rice-buying intervention in favour of a scheme under which it would subsidise farmers without buying grain itself. However, it has been forced to run both schemes in parallel in the face of farmers' protests. However, Thai rice prices were unlikely to stay high long due to rising supply, as the government said on Tuesday it would sell 950,000 tonnes of rice stocks by the end of this year and planned to sell another 1.77 million tonnes in 2010.
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