Robust demand and a stronger rupee boosted Indian rice prices in the week, but interest in Thai and Vietnamese rice remains weak and prices there have eased, traders said on Wednesday. "Indian rice prices have risen on the return of buying after New Year holidays and a gain in the Indian rupee," a Delhi-based trader said.
India's common white rice grades were quoted at $430-$440 per tonne, free on board (FOB), from $415-$435 last week. But Indian prices are still cheaper compared to Vietnam, even though the Vietnam Food Association cut the floor for the same 5 percent broken rice grade to $485 a tonne from $500 last week. The rupee surged to its highest level in more than a month on Tuesday and that helped push up the dollar price of grain.
In contrast, a weakening baht plus lower domestic prices cut export prices by around 6 percent this week in Thailand, the world's top rice exporter, and prices in number two exporter Vietnam also eased slightly due to thin demand, traders said.
"Demand for rice exports remained weak. Orders for rice exports have been generally thin so far in January and the trend for the month should be weak, similar to November and December," a Bangkok trader said. Thailand's benchmark 100 percent B grade white rice dropped to $549 per tonne from $583 last week and the 5 percent broken grade white rice fell to $533 a tonne from $567.
Traders said buyers from Indonesia and the Philippines were now going to Vietnam after prices eased in the past month. Vietnamese 5 percent broken rice fell to $455 a tonne, FOB, from $460 last week. They stood at $520-$550 a tonne a month ago. "Some deals were sealed at lower prices, but there were no major deals," a Vietnamese exporter in Ho Chi Minh City said. Several private firms from the Philippines have bought Vietnamese rice recently but their purchases, along with those of buyers from Singapore, China and Hong Kong, were not large enough to boost prices, he said. The Philippines said last week it may hold bidding next month for permits allowing private importers to buy up to 500,000 tonnes of rice this year, and actual buying could have started before permits were awarded.
SUPPLY TO RISE Supplies from India, the world's second-biggest rice producer, and Vietnam are expected to rise soon. India is sitting on huge stockpiles before an expected bumper harvest for the second year in a row, with summer production in the 2011/2012 crop year expected to rise 8 percent to 87.1 million tonnes from last year, farm ministry data showed. On January 1, India's rice stocks at government warehouses stood at 29.8 million tonnes, above a target of 11.8 million tonnes.
India has exported 1.2 million tonnes of rice so far since it lifted a four-year ban last year, traders estimated. In Vietnam foreign buyers have not asked for fresh quotations and several exporters also stopped making offer prices before the Lunar New Year holiday.
New demand could emerge next month when early winter-spring rice starts arriving, traders said. Vietnam will close all markets on January 21-29 for the holiday, called Tet Rice export loading will stop from this Friday and domestic trade stops from next Tuesday, exporters said.
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