Demand from China helped push Vietnamese rice prices to their highest in six months, while uncertainty in the wake of a coup in Thailand kept potential buyers of the country's grain on the sidelines, traders said on Wednesday. Vietnamese 5-percent broken rice was quoted at $420-$430 a tonne for winter-spring grain, or $395-$400 a tonne for summer-autumn, free-on-board from Saigon Port.
Traders said those prices were the highest since late 2013, with Chinese buying picking up following a drop due to tensions between China and Vietnam over a disputed part of the South China Sea. They said that 25-percent broken rice rose to $370-$375 a tonne for summer-autumn grain, up from $360-$370 last week. "Demand from China is obviously rising. China is buying rice from the winter-spring crop particularly strongly," said a trader in Ho Chi Minh City.
Most of the higher quality winter-spring grain is used for export, but its harvest ended in April. Fresh summer-autumn rice will arrive in bulk next month. "Freshly harvested summer-autumn rice is available, but the volume is small and quality is not good at the start of the harvest," said another trader in Ho Chi Minh City. The Philippines earlier ordered 800,000 tonnes of rice from Vietnam for shipment between May and August. It is also taking winter-spring rice, buoying prices.
Traders said demand from new markets such as Mexico, as well as appetite from Indonesia could support prices next month as the harvest peaks. Indonesia could more than double its rice imports this year to 1.5 million tonnes to keep food prices stable as an election looms and with a possible El Nino weather pattern on the horizon, industry officials and analysts said.
AFTER THE COUP Thai prices were steady amid thin trade on uncertainty over the outlook for the country's rice sector after the military seized power in late May. The price of common grade 5-percent broken white rice was unchanged from last week at $385 per tonne, exporters said. "Trading was thin and demand was not very strong as everybody waits to see if there's a clear policy on rice after the coup," said Kiattisak Kallayasirivat of Nobleagri Trade.
The military government said it would seek ways to support farmers and prevent prices from falling, but it was unclear whether it would bring back a policy of paying farmers at higher-than-market prices. A previous rice buying scheme was central to the recent political turmoil in the country, with critics saying it was riddled with corruption.
But traders said they expected the government to issue a new policy to prevent prices from falling by October. Farmers will start harvesting their major crop at that time, with around 28 million tonnes of paddy expected to be reaped.
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