Thai rice prices seen falling, overseas demand weak

Thai rice export prices are expected to fall in the next week due to a lack of overseas demand, traders said on Friday. Thai 100 percent parboiled grade was steady at $287-288 a tonne, free on board, on Friday. Indian parboiled grade was at $256-257. "The market is very quiet. There is nothing to do," said one trader in Thailand, the world's biggest rice exporter.
"I don't think anything exciting will happen next week. Buyers are looking at other cheaper sources such as Vietnam and India to pick up some quantities." Thai rice is $18-50 per tonne more expensive, on a FOB basis, than rice from Vietnam, the world's second-largest exporter of the grain.
Traders in Vietnam expected their prices to ease further in coming weeks as the country's key crop harvest is nearing its peak. Thai grade Jasmine rice was $10 down from last week at $380 a tonne FOB. The newly developed Thai Pathum Thani grade, which looks, tastes, smells like Jasmine rice, was $320. The domestic price of 5 percent white paddy was down 0.15 baht a kg at 10.95 baht this week from 11.10 baht a week ago.
Most farmers started planting the main rice crop this month after the start of the rainy season in mid-May, traders said. There was still talk in the market that Nigeria, one of the world's top importers, may change its policy on rice imports, traders said.
"For Nigerian buyers, they have bought some quantities, so they want to wait and see for a while before stepping up purchases," said one trader.
The talk was that Nigeria was planning to raise the fixed price for Thai rice to between $362 and $367 a tonne, cost and freight (C&F) and for Indian rice at between $352 and $355 a tonne C&F. Nigeria has set a fixed price for Thai parboiled rice imports at $230 a tonne C&F and Indian parboiled rice at $205.
In addition, it has imposed an import duty of almost 118 percent, so importers are already paying about $510 to bring one tonne of Thai rice into the country.
Nigeria is the world's biggest buyer of parboiled rice, importing 1.5-2 million tonnes of it a year, and Thailand and India are its main suppliers. Between January 1 and June 8, Thailand exported 3.3 million tonnes of rice, 16 percent down from 3.93 million shipped in the same period last year.
Thailand shipped a record 10.13 million tonne of rice last year, up from 7.58 million tonnes in 2003.
However, drought could trim exports to 7.5 million tonnes this year, exporters said.