Asian rice prices ease on thin demand; may rise in 2016

Export prices for Vietnamese rice were unchanged this week while they eased slightly for the grain from Thailand on lacklustre demand, although an expected deficit in global supply is likely to buoy prices next year, traders and analysts said. Thailand and Vietnam, the world's second and third biggest rice exporters after India, have been struggling to find buyers in a slow market in recent weeks, with traders warning that not much was expected to change until early 2016.
Thai 5-percent broken grain eased to $353-$365 a tonne, free-on-board (FOB) Bangkok this week, from $360-$365 in the past month. Traders in Bangkok said they expect a bleaker future for Thai rice in 2016, despite a tentative agreement to sell 200,000 tonnes to Iran. "The world's changed. Thailand has to come up with new trade strategies," a senior trader said on Wednesday. "We cannot just rely on rice exports anymore." Only small orders are trickling in from the usual clients and there seems to be no prospect of the market picking up momentum in the near future, traders said.
Vietnam also reported no fresh demand. The country's 5-percent broken grain stood idle at $375-$380 a tonne, FOB Saigon Port, while the 25-percent broken grain was quoted at $360 a tonne, from $360-$365 last Wednesday. "Supply is tight and loading has been very slow," a trader in Ho Chi Minh City said, referring to shipments under previously signed contracts.
Shipping industry reports show several vessels have been loading rice for Africa, Indonesia and Cuba at Saigon Port, Vietnam's biggest such facility, since early November and have yet to complete the process. But in 2016, Asian rice prices could rise due to smaller stocks, Fitch Ratings' BMI Research said in a report on Tuesday. Global production in 2015/16 will dip 0.5 percent to 476 million tonnes, the first decline in seven seasons, while consumption will continue to grow steadily, with higher import demand by China, the Philippines and Indonesia, the report said. Lower production could result in a deficit of 11 million tonnes in 2015/16, compared with the 10-year average surplus of 6 million tonnes, BMI Research said.