Asian rice prices fell this week and are expected to slide lower on thin demand and a significant rise in supplies over the next few weeks with substantial stocks in Thailand still weighing on the market, traders said on Wednesday. The price of benchmark 100 percent B grade Thai white rice slipped to $600 per tonne on Wednesday, from last week's $610 per tonne.
"The market is very quiet and demand is very thin as most buyers aren't rushing to buy as they know that the supply is rising in both Thailand and Vietnam so they're waiting to buy when prices reach bottom," said a Bangkok-based trader. Thailand, the world's biggest rice exporter, is due to harvest an off-season rice crop grown in well-irrigated areas in the centre of the country over the next few weeks.
The Agriculture Ministry expects about 3 million tonnes to be reaped with domestic rice supplies expected to peak in July. Besides rising supplies, a big government rice stock also weighed on prices and was likely to push them lower in coming weeks, traders said. The Thai government is holding record high rice stocks of 13.9 million tonnes of paddy, or 8.3 million tonnes of milled rice, according to Commerce Ministry data.
In Vietnam, rice prices also edged down this week as buyers were waiting for prices to drop further late this month when farmers in the country's southern region accelerate their harvest, traders said. "With the ongoing downward trend, buyers aren't rushing for deals now," a trader in Ho Chi Minh City said.
Vietnam's 5 percent broken rice edged down to $420 per tonne, free-on-board Saigon Port, from $420-$425 a week ago. The 25-percent broken grade also widened to $380-$390 a tonne, from last week's $385-$390. Main buyers of Vietnamese rice from Africa and China have been absent in the past week on expectation prices will fall, another trader said.
Buyers had cancelled orders for more than 90,000 tonnes in April and May and another similar amount could also be scrapped this month, a state-run newspaper cited an industry report on Tuesday as saying. Farmers in Vietnam's Mekong Delta have started an early harvest of the summer-autumn crop and are expected to pick up the pace from late June. With rising supplies, prices could fall further by mid-July when the harvest peaks, traders said.
Philippines to buy 20,000 tonnes of Vietnam rice The Philippines' National Food Authority (NFA) said on Wednesday it would buy an extra 20,000 tonnes of rice from Vietnam's state-owned Vinafood 2 at $470 a tonne to fill its buffer requirement ahead of the lean harvest season from July. The volume brings to 120,000 tonnes the state agency's total imports from the world's No 2 seller this year, but the deal is unlikely to provide support to falling rice prices in the region.
"We're now finalising the contract with Vietnam," NFA Administrator Angelito Banayo told Reuters. The agreed price is higher than the quoted market prices of Vietnam's benchmark varieties as it includes the cost of delivery up to NFA warehouses. Vietnam's 5 percent broken rice edged down this week to $420 per tonne, free-on-board Saigon Port, from $420-$425 a week ago. The 25-percent broken grade, the variety Manila usually buys, also widened to $380-$390 a tonne, from last week's $385-$390.
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