High domestic prices have forced exporters in Thailand to seek at least 50,000 tonnes of cheaper rice from Indian and Pakistani origins to deliver to clients, exporters said on Wednesday.Thailand is the world's biggest rice exporter but that status is in jeopardy because the government that took office in August has agreed a big increase in the price it will pay farmers for the grain, which is pushing up export prices."
From what I have heard, there were 50,000 tonnes of rice from India and Pakistan bought by Thai exporters to be shipped from there to clients in order to restore relationships with customers," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. "And there could be more if Thai rice prices are still high like this." Thai exporters have started looking in recent months for cheap rice from countries such as Cambodia and Vietnam to deliver to Chinese clients, the first time this has happened since 2008, when Thailand's benchmark rice hit a record high of $1,080 a tonne.One Thai firm had bought 300 tonnes of Indian rice at $650 per tonne, CIF, to be delivered to clients in the Middle East, Indian trade sources said on Wednesday."Thai buyers are scouting for Indian supplies to meet their export commitments in Africa as Indian rice is cheaper by $150-$200 per tonne compared to supplies from any other origin in the world," said a New Delhi-based trader.
With competitive prices and huge government stocks, India, which banned exports of non-basmati rice from late 2007 until September this year, is well-placed to supply buyers put off by high Thai prices. Huge output and stocks have ensured a competitive advantage for Indian rice, especially after the recent depreciation of the Indian rupee, traders said.India is sitting on a huge inventory - on November 1 stocks in government warehouses stood at 26.1 million tonnes - and it has enjoyed bumper harvests for the second year in a row."India also offered to sell its premium grade basmati rice very cheaply at around $800 per tonne," said Wanlop Pichpongsa of Bangkok-based Capital Rice.That is well below the cost of Thai premium grade fragrant rice, which was offered at $1,000 per tonne, he said.Apart from relaxing its ban on private rice deals, the Indian government is also exploring rice sales via state-owned firms to trim its bulging stocks.
VIETNAM CUTS PRICES Despite sluggish demand, Thai rice prices held at firm levels this week due to government intervention, but Vietnam lowered its offer prices in order to compete better with India, exporters said.The benchmark 100 percent B grade Thai white rice was steady at $610 per tonne, while the 5 percent broken grade was unchanged at $595 per tonne, they said.
The same 5 percent broken grade in Vietnam was at its lowest level in four months, indicated in a wide range of between $520 and $550 a tonne, free on board, versus $540 to $570 last Wednesday. The offer at $520 a tonne was the lowest since July 27. The 25 percent broken rice fell to $480-$510 a tonne from $520-$530 a week ago.