Falling prices for rice shipped from Asian exporters Thailand and Vietnam have prompted buyers in Iraq, Malaysia and Africa to come out to seal a few deals, traders said on Wednesday. "At current prices, buyers can start their purchases," a Vietnamese trader at a European firm said, adding that China, Vietnam's top buyer in 2014, has yet to enter the market.
Supply gluts have been weighing on Asian rice export markets for weeks, with prices in third largest shipper Vietnam dropping to their lowest since mid-2010. Vietnam's 25-percent broken rice prices dropped nearly 4 percent from a week ago to $320-$325 a tonne free-on-board (FOB) on Wednesday, even before its biggest crop harvest for the year peaks in March.
The 5-percent broken grade in Vietnam weakened to $355-$360 a tonne, FOB, the lowest since September 2013. The top variety has lost nearly 9 percent since the start of the year. "Vietnam is very much willing to sell now so any price below $360 a tonne (for 5 percent broken rice) could be accepted," another trader in Ho Chi Minh City said.
"Buying for Africa has started, but given prices dropping, buyers are not rushing in," he said. Loading is under way in Vietnam's Saigon Port for 40,000 tonnes of 5-percent broken rice for Africa, and another 20,000 tonnes will be loaded after Tet, the country's Lunar New Year festival, said the trader with the European firm.
Malaysia has also agreed to buy 240,000 tonnes of Vietnam's 5-percent broken rice for April-November deliveries, traders in Vietnam said. Prices are expected to remain under pressure, with supplies in Vietnam jumping next month when farmers start harvesting the winter-spring crop in the Mekong Delta on a large scale. In Thailand, Iraq has bought about 80,000 tonnes of rice in an international tender that closed last week at a price of $443.90 a tonne, cost, insurance and freight free out (CIFFO), European traders said.
The Thai government has still not finalised results for the sale of 1 million tonnes of rice from state warehouses, although the volume is expected to keep a lid on prices.
"Rice prices won't go anywhere anytime soon," a Bangkok-based trader said. Thai 5-percent broken rice eased to $413 per tonne, FOB, on Wednesday, from $415 a tonne a week ago. Top world rice exporter Thailand will likely ship 10 million tonnes this year, down around 7 percent from 2014, Thai Rice Exporters Association said this week.