Rice prices in Thailand and Vietnam fell this week under rising supply pressure, with the Thai government planning a major tender next week and Vietnam set to harvest its main crop from late February, traders said on Wednesday. Thailand, which last year toppled India to regain its position as the world's largest rice exporter, will harvest its off-season crop in March, also pressuring prices.
Thai benchmark 5-percent broken rice stood at $405-$416 a tonne free-on-board (FOB) on Wednesday, with the old grain from government stocks standing at $405 a tonne and new-crop grain at $416, against the $410-$420 range in place since November. A team has been put together to ensure off-season rice prices do not fall lower than they did last year, Commerce Minister Chatchai Sarikalya said on Wednesday, adding that he would consider introducing new measures to help farmers if prices plunge.
Thailand's government plans over two years to sell off its huge stocks, which totalled nearly 17 million tonnes, accumulated under a pledging scheme by the previous government. It will tender to sell about 1 million tonnes on January 29. "Whenever there is a big auction, rice prices won't move much because there is always the rice auctioning to support the market," said a Bangkok-based trader.
Vietnamese rice prices, already at the lowest in at least 10 months due to thin buying demand, could fall further next month when harvesting of the winter-spring crop gathers steam, traders said on Wednesday. "Shipments in February are risky due to Tet holidays and thin supply, while rice loaded in March will be safe," said a Vietnamese exporter in the Mekong Delta province of Dong Thap, referring to the possibility of delays.
The Tet festival marks the Lunar New Year, with all markets closed between February 14-23. On Wednesday, 5-percent broken rice stood at $370-$380 a tonne, FOB Saigon Port, for February/March loading, from $380 a week ago. The 25-percent broken variety eased to $340-$350 a tonne, from $350-$360 last Wednesday. Vietnam could export 900,000 tonnes in the first quarter of 2015, a state-run newspaper on Wednesday cited the Vietnam Food Association as saying. The forecast volume would be nearly 37 percent lower than a year ago, based on government data.