Rice dealers in Thailand are looking to buy grain from Pakistan for delivery to China, traders said on Wednesday, as the Thai government's policy of setting a relatively high minimum price for the grain threatens its status as a top exporter. "Pakistan's prices were cheaper so Thai exporters could make a profit from that rather than buying from domestic markets, which have been pushed up by the government," a Thai trader said. Traders did not give any volumes for these deals.
Pakistan's 5 percent broken grade white rice was offered at around $450 per tonne, free on board (FOB), well below the same grade of Thai rice at $580-$600 per tonne. Vietnam offered its 5 percent broken grade at $555-$565 a tonne, FOB, up slightly from $550-$560 last week but demand was thin as buyers anticipated a drop in prices when the country's winter-spring crop arrives in early 2012.
Thailand's benchmark 100 percent B grade white rice stood unchanged at $620 a tonne, supported by government intervention. The relatively high price made for very thin trade. The government started buying rice at 15,000 baht ($480) a tonne from October 7 to support farmers. Some traders have said that could push the export price of the benchmark grade above $800 a tonne and buyers have switched to other origins.
"They are now buying from India and Pakistan as their prices are more attractive," said a Bangkok-based trader. The effect of the intervention policy has been limited so far because of widespread flooding in Thailand, which has disrupted trade. Some farmers in need of cash and unable to get grain to government buyers have had to sell to millers at far cheaper prices.
In Vietnam, ample stocks have kept prices stable after Indonesia bought 300,000 tonnes of 15 percent broken rice, following a deal of 250,000 tonnes with India, traders said. "The deal is only for 300,000 tonnes, while exporters have more than 1 million tonnes sitting in warehouses," an exporter in Ho Chi Minh City said.
Vinafood 2, Vietnam's top rice exporter, has built stocks in advance to prepare for loading to Indonesia so domestic and export prices were little affected by the news, another trader said. Indicative offers for Vietnam's 25 percent broken grain edged up to $515-$525 a tonne, FOB, from $505-$510 a week ago.
THAI FLOODS RECEDING Thai exporters said the flooding situation in Thailand had improved, with water receding in several places, allowing exporters to resume rice shipments. Thai exports fell significantly in October when floods cut transport routes. Loading volumes fell to 628,000 tonnes from 890,000 tonnes in October 2010, Ministry of Commerce data showed.
Thailand has exported 9.9 million tonnes of the grain so far this year, up from 7.5 million in 2010. It had aimed to sell a record of more than 10 million tonnes this year. Vietnam would follow with around 7 million tonnes, which will be a record after its 6.83 million tonnes in 2010, industry officials said.
Vietnamese exporters have signed deals to ship 7.3 million tonnes, of which around 7 million tonnes would be loaded in 2011 and the rest in early 2012, Pham Van Bay, deputy chairman of the Vietnam Food Association, was reported as saying by a state-run newspaper on Wednesday.
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