Vietnam rice prices drop as demand remains thin; India eyed

Vietnamese rice exporters cut their offer prices this month but demand remained thin amid rising regional supply, while big buyers of parboiled rice were looking to get cheap supplies from India, traders said on Wednesday.
The Vietnam Food Association (VFA) continued to adjust policy, setting its floor price for the 35 percent broken grade at $365 a tonne, compared to offer prices last week around the previous floor of $370 a tonne, allowing exporters to lower quotation for other grades to attract buyers.
The 5 percent broken grade white rice dropped to $390 a tonne, free on board, from last week's $390-$395, after the VFA stopped setting a floor price for the grade. Demand for Vietnamese grade was thin as major buyers stayed away on hopes prices would come down further with fresh harvest rolling in from Vietnam and Thailand, traders said.
"There's some demand from Africa, while China reduced its buying pace," said a Vietnamese exporter in Ho Chi Minh City. African buyers looking for parboiled rice, which can be stored for longer than milled rice, were generally looking to India due to its competitive prices. "There's no parboiled grade available in Vietnam and Thai prices are too high," said a Bangkok-based trader.
Indian parboiled rice was offered at $435 per tonne, while the same grade in Thailand was at $560, traders said. A government intervention scheme has raised rice stocks in Thailand to record levels and made export prices for the grain uncompetitive. The scheme has also cost Thailand its post as the world's top rice exporter, a spot it had held for three decades before being toppled by India last year.
Thai rice was steady this week, with rising supply offset by the impact of a jump in the baht to another 16-year high on Tuesday. A stronger baht pushes up dollar-based export prices. The common 5 percent Thai white grade was steady at $540 per tonne, exporters said. "There was a substantial amount of rice on the free market as farmers needed to sell to private millers after the government declined to buy some types of rice," one exporter said. Last week, the Thai government said it would limit the amount of rice it buys from farmers in the forthcoming off-season crop, which traders said was due to a lack of warehouse space and rising costs.