The price of rice in world No.2 exporter Thailand fell to a 10-month low of $390 a tonne on Wednesday on thin demand, while prices in rival Vietnam dipped to their lowest in 10 weeks after its top buyer China halted border purchases, traders said. The Thai benchmark grain broke the $400-a-tonne level on April 1 and has stayed below that mark since, although failing to attract buyers, who may be looking at even cheaper grain from Vietnam, traders said.
Vietnam offered its 5-percent broken rice at $358-$365 a tonne, FOB basis, on Wednesday. The price at the bottom end of the range is a 10-week low, based on Reuters data. "Vietnam's rice prices now are cheap," said a Bangkok-based trader. "We cannot sell at that price, our production costs are higher."
Rice exports from Thailand and Vietnam together account for 40 percent of the global trade of the grain. The Thai military government has so far sold around 3 million tonnes of rice from its huge stocks, and another 10 million tonnes could be sold later this year, Thailand's commerce ministry said in a statement on Monday. China has stopped buying Vietnamese rice via their shared land border as of April 1, causing a glut of nearly 30,000 tonnes in the smaller nation's northern province of Lao Cai, reported the Vietnam Agriculture newspaper, run by the agriculture ministry.
"We are not sure how long the closure will last, while the winter-spring harvest has ended, so prices are lower this week," a trader at a foreign firm in Ho Chi Minh City said. China imported 343,000 tonnes of Vietnamese rice in the quarter ended March 31, down 40.3 percent from a year ago, Vietnam Customs data show. China's total rice imports in 2015 are forecast to rise 5.2 percent from last year to 3.2 million tonnes, the UN Food and Agriculture Organization (FAO) has said.
In another development, South Asia, including India and Pakistan, are expected to see below average rainfall in 2015 due to the impact of an El Nino weather pattern, which sometimes brings a dry spell to the region, a weather expert said on Wednesday. An FAO report on April 10 forecast paddy output from five nations in South Asia including India and Pakistan at a combined 22.44 million tonnes this year, little changed from 22.39 million tonnes in 2014.