Thin buying and prospects of higher supplies pulled down rice export prices in India and Thailand this week, while Vietnamese prices hovered at a one-year low on weak demand, traders said on Wednesday. Harvesting of the main crop in Thailand, the world's second-biggest rice exporter after India, might peak next month with the output contributing to more than 80 percent of the country's total production.
"October will be the period when new stocks arrive so prices will continue to drop," said a trader in Bangkok, who expects prices to drop further between $5 and $10 per tonne. Thailand's benchmark 5-percent broken rice eased to $365-$370 a tonne on Wednesday, free-on-board (FOB) basis, from $370 a week ago. Wednesday's prices are at par with those in late August, when rates fell to the lowest in nearly six months.
Thailand's main crop rice output is seen at 25.02 million tonnes this year, up 4.8 percent from last year, according to the agriculture ministry. Prices of India's 5-percent broken parboiled rice eased to $368-$378 per tonne this week, from the wider range of $370-$380 two weeks ago, due to weak exports, though a stronger Indian rupee limited the downside.
"Due to the appreciating rupee, we should have raised prices but couldn't due to the weak demand," said an exporter based at Kakinada in the southern state of Andhra Pradesh. "Expecting a bumper new-season crop, traders have slowed down purchases," he said.
India's summer-sown rice output is seen at a record 93.88 million tonnes in the crop year till June 2017, as plentiful monsoon rains help boost yields, the farm ministry said.
Exports of India's non-basmati rice in April-June, the first quarter of its fiscal year, rose 2.3 percent from a year ago to 1.74 million tonnes. In Vietnam, the world's third-largest rice exporter, the 5 percent broken grain prices fell to $330-$340 a tonne, FOB basis, from $335-$345 last week, and the 25-percent broken rice also eased to $310-$315 a tonne, both at their lowest since September 2015, based on Reuters data.
"Philippine firms have started small-volume buying from Vietnam, even though they have not obtained import quotas," said a trader at a European firm in Ho Chi Minh City. "Most buyers have turned to Pakistan or Myanmar," another trader said, adding that Pakistan offers its 5-percent broken rice at $325 a tonne, FOB basis. Vietnam's rice exports this year are expected to drop 13.8 percent from 2015 to 5.7 million tonnes following regional competition, the US Department of Agriculture said in a report this month.
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