Asian rice prices barely changed as market awaits Thai sale tender

Thai rice prices were little changed from a week ago amid thin trade on Wednesday as buyers and sellers waited to see clear market direction from the government's planned sale of part of the inventory built up over the last two years. The Thai government has said it will hold tenders to sell a total 550,000 tonnes of milled and paddy rice from stocks at market prices.
"The market is waiting to see which bidding prices would be accepted by the government and that price would become an indication for the market," said a Bangkok-based trader. Buyers are to submit their bids into the tenders on July 26 and July 30. The government would then take a few days to negotiate for better prices before announcing the tender result, said a senior official at the Commerce Ministry. Thai 5 percent broken grade white rice was at $468 per tonne on Wednesday, down slightly from last week's $470 per tonne.
Exporters who were interested in joining the tenders said they would bid $20-$30 per tonne lower than the market to offset logistic and packaging costs to carry rice from the government warehouses to the ports. "It doesn't make any sense and you can't compete at all with India and Vietnam if you buy at market prices plus exporting costs," one exporter said. The Thai price of $468 a tonne is far below the level at which the government bought from farmers at 15,000 baht per tonne paddy, or around $700 per tonne when milling, packaging and storage costs are included.
The government has said its losses from the 2011/12 buying scheme total 136 billion baht ($4.39 billion). Losses were expected to mount as the government continued the scheme in the 2012/13 crop year, which ends September 30. Vietnamese prices slipped this week as farmers started selling rice to exporters amid thin demand, exporters said.
Farmers have held their rice for weeks, expecting higher prices if fresh demand emerged from major buyers. But there were no big orders from the Philippines and Indonesia, the main buyers of Vietnamese rice. In Vietnam, 5 percent broken rice dropped to between $397-$400 a tonne, free-on-board (FOB), from last week's $400 to $410. Vietnamese 25 percent broken rice narrowed to $365-$375 a tonne, FOB, against $360-$375 a week ago.