Thai rice exports slump on intervention; Vietnamese exports surge

Thai rice exports have halved from a year ago due to unrealistically lofty prices caused by government intervention, and prices are likely to stay high until the end of the second quarter which will cause exports to slump, traders said. Between January to April 17, Thailand exported 1.8 million tonnes, down 47 percent from the same period of last year, when it sold 3.4 million tonnes.
"That was definitely due to government intervention that pegged Thai prices at uncompetitively high levels," said Chookiat Ophaswongse, an honorary president of the Thai Rice Exporters Association. The benchmark 100 percent B grade Thai white rice was offered unchanged at $550 per tonne, while another 5 percent broken grade was at $500 per tonne, up slightly from last week's $495. "Prices are likely to stay at that high level until the end of June, when government intervention is due to expire," said another Bangkok-based trader. The government pays farmers 15,000 baht ($490) per tonne for paddy, well above market prices of around 9,000 baht, building up nearly 7 million tonnes of rice for government stocks.
VIETNAM EXPORTS SURGE Unlike Thailand, Vietnamese rice export in the second quarter were likely to double in the first quarter to 2 million tonnes, due to fresh demand from China and the Philippines. The Philippines' state grains procurement agency said last week it would seek bids from rice exporters Vietnam, Thailand and Cambodia for a 120,000-tonne supply deal as it seeks to boost buffer stocks before the lean harvest season.
"We expected the Philippines to award this lot to Vietnam this year as its prices are cheaper," one exporter said. Vietnam's 5 percent broken rice was offered at $425-$455 a tonne, free-on-board Saigon Port, against $440-$450 a tonne last week. That was well below the same grade of Thailand of around $500 per tonne.
Another Vietnamese 25-percent broken grade eased to $370-$380 a tonne from last week's $405-$425 a tonne due to thin demand for this grade, traders said. On the other hand, rice companies have so far bought an equivalent 1.08 million tonnes of rice, having completed their purchase to stockpile 1 million tonnes under an industry plan to support prices during the harvest season, the Vietnam Food Association said.