A lack of fresh buying demand has kept Asia's rice markets muted this week, keeping prices low in both Thailand and Vietnam, while buyers may wait for prices to soften further when a new harvest begins in Vietnam next month, traders said on Wednesday. Last Friday, the Philippines agreed to buy 150,000 tonnes of rice from Vietnam in a tender and could import more to avert a potential spike in prices if adverse weather threatens the local crop.
"The volume is too small to raise prices," said a Vietnamese trader at a European firm in Ho Chi Minh City. Vietnam's 5-percent broken rice eased to $350-$355 a tonne, free-on-board (FOB) basis, from $350-$360 a tonne a week earlier. The 25-percent broken grade fell to $330-$335 a tonne from $350 last Wednesday, after the price floor for the variety was lowered on Monday.
"Buyers are waiting for the new harvest early next month," said the trader, referring to the summer-autumn rice harvest in the Mekong Delta food basket, the country's second-biggest crop. At the tender in Manila, Thailand submitted a price of $419 a tonne, above Vietnam's $410.12 a tonne that matched the buyer's ceiling. "Losing out on the tender further subdues Thailand's rice market," a Thai trader said. "We don't know where to take our rice anymore." Thailand's 5-percent broken white rice stood unchanged in the past week at $370 a tonne, FOB basis, the lowest since May 30, 2014. Prices stood unchanged before the Thai government's rice tender on June 15 at which it will seek to sell around 1 million tonnes. On Tuesday, the Thai Royal Irrigation Department asked farmers to delay growing their main rice crop due to a drought this year.
China, Vietnam's top rice buyer, has not stepped up its purchase, contributing to the fall in shipments, traders said. Last year, China bought 2.5 million tonnes of Vietnamese rice, or 36 percent of Vietnam's total rice exports, a Vietnamese minister told the parliament earlier this week.