Rice prices in Vietnam were boosted by demand from China and the Philippines despite higher export floor prices in the world's second-biggest exporter of the grain, while intervention swelled prices in competitor Thailand, traders said on Wednesday.
The offer price of 5 percent broken grade Vietnamese rice rose to $440-$450 a tonne, on a free-on-board basis, from $435-$445 last week. The price of 25 percent broken rice also rose to $405-$425 a tonne, from $390-$405. "Quotations are higher now following the new floors, which slow trading," a trader in Ho Chi Minh City said.
From April 9, the food association raised the minimum export price for Vietnam's 5 percent broken rice nearly 6 percent, to $450 a tonne, on a free-on-board basis, from $425 earlier. The floor price of 25 percent broken grade white rice was also increased a little over 6 percent, to $425.
Traders in Vietnam said the higher floor prices aimed to secure better prices if the Philippines, the country's traditional buyer, started buying again. However, they said they had not been able to verify Manila was actually in the market after having bought 500,000 tonnes from Vietnam last month that is now loading and a subsequent 80,000 tonnes of 5 percent broken rice.
Vietnam continued to sell significant volumes to China, traders said. China has signed contracts totalling 770,000 tonnes, apart from 500,000 tonnes bought in unofficial trade, a Vietnam Food Association official told a briefing on Monday. But a shortage of containers has slowed loading, traders said.
THAI PRICES STEADY A government intervention scheme has pegged rice prices in biggest exporter Thailand at uncompetitive high levels. The benchmark 100 percent B grade Thai white rice was steady at $550 per tonne, while the 5 percent broken grade rose slightly to $550 per tonne from $495, exporters said.
"Rice prices stood that high due to intervention, not because of demand," said Chookiat Ophaswongse, a honorary president of the Thai Rice Exporters Association. The Thai government has extended a subsidy scheme to the end of June, paying 15,000 baht ($480) per tonne of paddy to support farmers, or 67 percent over the market price around 9,000 baht.
Traders said prices were expected to drop in the coming month as demand for parboiled rice began to subside from Nigeria, which switched to buying from Thailand after port congestion in India left the South Asian country struggling to ship on time. "Nigeria is about to stop buying after being well-stocked. But we don't expect to see a sharp fall in Thai prices as the intervention should support them anyway," said another Bangkok-based trader. Nigeria was the world's second biggest rice importer in 2010/11, importing 2.3 million tonnes, after Indonesia with 2.8 million, US Department of Agriculture figures show.
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