Vietnam's rice market saw thin trade on high prices and limited supply, while Thai market returned to the usual calm following a busy week after New Year, traders said on Wednesday. Thailand and Vietnam are the world's second- and third-biggest rice exporters after India, with combined shipments making up nearly 40 percent of global grain trade in 2015, according to UN Food and Agriculture Organization (FAO).
Thai 5-percent broken grade edged up to $356-$360 a tonne, free-on-board (FOB) Bangkok, from $352-$355 a week ago. Prices jumped during the New Year due to strengthening of the Thai baht and increase in ships coming in to pick up orders, but now the market is quiet again due to lack of demand, Thai traders said.
However, traders still remain hopeful about Thai rice prices for this year. "Thai rice prices should improve this year. There will be a demand from neighbouring countries due to drought conditions," a trader said. Thailand plans to sell 2 million tonnes in government deals this year; half of which is expected to be signed soon with China, the Bangkok Post newspaper reported, citing a Thai commerce ministry official last week.
Vietnam's 5-percent broken rice was traded at $360-$365 a tonne this week, FOB basis, narrowed down from $360-$370 last Wednesday. "Trade was thin as Vietnam's prices are higher than Thailand while there's not much fresh supply left," said a trader in Ho Chi Minh City. "This month's export is mostly for government contracts," another Vietnamese noted.
Supplies will pick up later this month and during main harvest peaks in March. The Philippines, one of the world's top rice importers, is set to buy 400,000 tonnes of the grain for delivery in the second quarter, and may need an additional 800,000 tonnes to cover this year's requirements. The Philippines' fresh demand could give a boost to rice prices in Vietnam and Thailand - the country's main suppliers.