Thai rice prices ticked up this week on low supply at the end of the harvest season, while quotations eased in India and Vietnam due to thin demand, traders said on Wednesday. Thai benchmark 5-percent broken rice prices strengthened to $360 a tonne on Wednesday, free-on-board (FOB) basis, from $350-$359 last week.
"Some exporters bought rice when prices were low to sell later, which helped raise prices," said a Bangkok-based trader. Supply has tapered off, another trader said. "Prices are going up because the harvest peak is over," a third trader said, adding that the new harvest season will begin next month, which could halt a further rally in prices.
Thailand's rice exports have improved and the country is on track to meet its 2016 rice export target of 9.5 million tonnes, the commerce ministry said on Wednesday. In India, the 5 percent broken parboiled rice prices dropped $2 per tonne this week to the range of $348 per tonne to $352 per tonne due to weak export demand, though limited supplies in the spot market restricted the downside.
"Prices could have corrected sharply, but due to demonetisation it fell instead of rising," said an exporter based in Kakinada, a city in the southern Indian state of Andhra Pradesh, referring to the government's move to scrap high-denomination banknotes. Earlier this month, the Indian government scrapped 500-rupee and 1,000-rupee bills to crack down on corruption. The move disrupted trading of farm commodities such as cotton, rice and soybean as most farmers prefer payments in cash.
India's summer-sown rice output is seen at a record 93.88 million tonnes in the crop year ending June 2017 as ample rainfall helps boost yields after back-to-back years of drought, the farm ministry said. "Prices will come down after two or three weeks once the cash crunch eases," said a Mumbai-based dealer. India, the world's biggest rice exporter, mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East. The country's non-basmati rice exports between April and August, the first five months of its fiscal year, rose 0.8 percent from a year earlier to 3 million tonnes.
Vietnam's 5 percent broken rice eased to $340 a tonne, FOB Saigon Port, from last Wednesday's $340-$350, but still failed to attract buyers, traders said. Vietnam's January-November rice exports dropped 24.2 percent from a year earlier to 4.59 million tonnes, the government said. Thailand and Vietnam are the world's second- and the third-biggest rice exporters after India.
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