Trading in Asia's main rice markets was almost at a standstill this week, with prices falling to 15-month lows in Vietnam ahead of the country's main harvest and traders watching out for a big tender of grain from government stockpiles in Thailand.
Thailand was the world's top rice exporter in 2014, followed by India and Vietnam.
The Thai government is looking to sell about 1 million tonnes on Thursday, equivalent to about 10 percent of the country's exports in a normal year. The Thai government has been struggling to offload some 17 million tonnes of rice in its stockpiles, which were built up under the previous administration's buying programme.
"The government is willing to sell the remaining rice stock at a more affordable price, so the market is monitoring whether the price will be lower than what's being offered right now," a Thai trader said, adding private firms were interested in the tender. Prices at the tender would be used as a reference in the market, a Vietnamese trader said.
Thai benchmark 5 percent broken rice was quoted at $415 a tonne, free on board, down from $416 a tonne the previous day and compared with $405-$416 a week ago. In Vietnam, 5 percent broken rice fell to the lowest in more than 15 months, touching $360-$370 a tonne on Wednesday, FOB, versus $370-$380 a week ago. The 25 percent broken rice fell to $340-$350 a tonne from $350-$360.
"China has yet to buy. Maybe they will start purchases in March," a Vietnamese trader said of Vietnam's biggest rice buyer. "Africa is also not buying anew thanks to high stocks." Vietnamese prices are the same as or above those offered by Pakistan, making it difficult to compete with the South Asian country for sales to Africa, he said. Prices have not been helped by news that the Philippines planned to import up to 500,000 tonnes for delivery between March and May to boost stockpiles.
Vietnam will harvest the winter-spring crop, it's biggest, from late next month and prices are expected to ease further. Thailand could export a record 11 million tonnes of rice in 2015, followed by India with 8.2 million and Vietnam with 6.9 million, the UN Food and Agriculture Organisation has projected. Rice exports from the three countries account for more than 60 percent of global trade.