Prices of Thai rice hit their highest in nearly four years while those of the Vietnamese grain rose to their strongest in more than two years on strong demand from key importing countries, traders said on Thursday. Thailand's benchmark 5-percent broken rice was quoted at $440-$457 a tonne, free-on-board (FOB) Bangkok, up from $430 last week.
Thai prices have been rising steadily since March, when traders started loading ships, and reached a level unseen since August 2013 this week. "Ships are still arriving and exporters are buying supply to fulfil shipments," said a trader in Bangkok. Exporters are now buying the grain at much higher prices than when deals were struck, while some have shied away from fresh deals, he added.
Thailand has exported 5.09 million tonnes of rice so far this year, up 15.7 percent from the same period last year, the government said on Wednesday. In Vietnam, the 5-percent broken rice was quoted at $395-$400 a tonne, FOB Saigon, up from $390 last week and the highest level since November 2014. Prices are expected to rise further in Thailand and Vietnam, the world's second and third biggest rice exporters, traders said, given that demand from key importers of the grain has been strong this year.
Bangladesh is set to import 250,000 tonnes of rice from Vietnam in a government-to-government deal, as part of an effort to build reserves, which are at 10-year lows, and rein in record-high local prices after flash floods hit output. "The deal is likely to be finalised by next week," Ataur Rahman, additional secretary at Bangladesh's food ministry, told Reuters. As a result, Vietnamese traders are holding onto stocks to sell later at higher prices.
"Most private traders and farmers are still holding grains for higher prices," said a trader based in Ho Chi Minh City. Bangladesh also plans to increase rice imports from Vietnam to 500,000 tonnes by end-2017 and to buy 1 million tonnes of Vietnamese rice annually until 2022. It is also in talks with Thailand and India. The Philippines has also said it would issue a tender next month to import 250,000 tonnes of the grain from Thailand and Vietnam and possibly also India.
In India, the world's biggest rice exporter, prices of 5-percent broken parboiled rice limbed by $2 per tonne to $415-$418, as demand from overseas buyers rose. "In the last few weeks demand has risen from African buyers. The quick rise is prompting many buyers to increase purchases," said an exporter based at Kakinada in the southern state of Andhra Pradesh.
At current levels, exports are competitive despite an appreciation in the rupee, he added. The rupee has risen nearly 5 percent so far in 2017 and trading near its highest level in 21 months. A stronger rupee trims returns of exporters. India's non-basmati rice exports in April fell 18.5 percent from a year ago to 475,050 tonnes due to a stronger rupee.
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