Asian rice prices have risen, propped up by government intervention and the prospect of rising demand for food aid after typhoon Ketsana swept through the region, traders said on Wednesday. The price of Thailand's benchmark 100 percent B grade white rice rose to $535 per tonne from $530 last week as the government has extended a rice-buying scheme for two weeks, aiming to support prices.
"The extension pushed prices higher. Supply is tight already as we are at the end of the old crop and we need to wait until the harvesting of the next season in November," one exporter said. The intervention scheme had originally been due to end on July 30 but was reinstated for a month in September after farmers protested at its removal and the planned introduction of a new-style support scheme, which they said was too complicated.
Thailand, the world's biggest rice exporter, is believed to hold the equivalent of 6 million tonnes of milled rice. Traders said rice prices were likely to remain firm over the next few weeks, especially if demand for food aid rose.
Typhoon Ketsana, which killed 246 people in the Philippines and 38 people in Vietnam, was unlikely to affect the main rice-growing region in southern Vietnam. However, the storm should lend support to prices, traders said. "Demand should rise. I expect the UN or rich countries could buy rice for aid sooner or later," a trader in Vietnam said. Vietnam is the world's second biggest rice exporter. Its domestic paddy prices rose to about 4,000 dong per kg from around 3,500-3,800 dong last month as the government implemented the second phase of its stockpiling plan for 500,000 tonnes, the Vietnam Food Association (VFA) said in its weekly report.
Vietnamese 5 percent broken rice rose to 6,800 dong per kg, or about $380 a tonne, up from 6,600-6,700 dong a week ago, the association said. The government said this week rice exports in the first nine months of 2009 jumped 34.1 percent to 4.98 million tonnes.
Vietnam planned to load 1 million tonnes of rice in October, which would take total exports this year to nearly 6 million tonnes, state media quoted VFA Chairman Truong Thanh Phong as saying this week.