Asian rice prices up on possible demand from Indonesia

Asian rice prices gained slightly this week on possible demand from Indonesia, even though supply was boosted by a Thai government rice sale, the ongoing harvest in Thailand and an upcoming harvest in Vietnam, traders said. Rice prices in Vietnam rose after a long Lunar New Year holiday as traders were monitoring talks on rice sale to Indonesia, traders in Vietnam said on Wednesday.
Quotations for the 5 percent broken rice widened to $350-$360 a tonne, free-on-board Saigon Port, from $350-$355 in the week ended February 5, while the 25 percent broken rice stood nearly flat since the start of the month at $330-$335 a tonne. "Vinafood 2 has ordered 15-percent broken rice from its member companies, so that it would have stocks handy for negotiations," a trader in Ho Chi Minh City said.
Vinafood 2 is Vietnam's top rice exporter. The 15 percent broken grade is often sought by Indonesia. Last year Indonesia bought 1.5 million tonnes of rice from Thailand and Vietnam, the world's second- and third-largest exporters of the grain after India. Traders said most Vietnamese exporters were reluctant to offer now while waiting for more clues on pricing when the harvest of the winter-spring crop peaks from later this month.
In Thailand, a government rice sale and an ongoing harvest would not boost prices, traders said. Thai 5-percent broken rice rose slightly to $370-$375 a tonne, FOB Bangkok, from $365-$375 two weeks ago, even after the Thai government sold 152,377 tonnes via an auction to 15 private companies.
"I don't think it has any impact. Rice sold in the auctions is not of the kinds wanted by main foreign buyers," a trader from one of the 15 companies said, adding that some of the grains at the sale will be exported. Thailand has now begun harvesting an off-season crop and traders said the additional supply will not boost prices in at least another month.
"I don't see prices inching up in March," another trader said. Supply from Vietnam and Thailand has been rising so far this year, based on official estimates. Thailand has exported nearly 400,000 tonnes between January 1 and February 7, up 36 percent from a year ago, according to a US Department of Agriculture report early this month. In January Vietnam shipped an estimated 495,000 tonnes, up 56.7 percent from a year ago, the country's Agriculture Ministry has said.