Export prices of Vietnamese rice picked up this week on loading demand and possible damage from dry weather in the Mekong Delta food basket, while Thai rice prices plunged on lack of orders, traders said on Wednesday. Harvesting of the winter-spring crop, Vietnam's biggest, is peaking this month in the Delta, but salination due to the El Nino weather phenomenon has worsened the grain quality, a trader at a foreign firm in Ho Chi Minh City said.
The government said in February the delta is facing the worst drought and salination in 90 years. On Monday, Prime Minister Nguyen Tan Dung called on the Delta's provincial authorities to use all resources to fight the drought and mitigate impacts of the natural disaster, a government report said.
Quotations for the 5 percent broken rice widened to $355-$367 a tonne, free-on-board Saigon Port this week, from $355-$365 last Wednesday, while the 25-percent broken rice stood at $345-$350 a tonne, against $340-$350 a week ago. "Exporters are not willing to make new offers now, as they look at the situation with the dry weather," the trader said. Ongoing loading demand for Indonesia and the Philippines under deals signed in late 2015, along with inquiries from China, have also helped firm up prices, traders said.
Vietnam's rice exports in the first two months of 2016 are estimated to have surged 109.8 percent from a year earlier to 1.01 million tonnes, mostly destined for Indonesia and the Philippines, the Agriculture Ministry said last Friday. Thailand and Vietnam are the world's second- and third-largest rice exporters after India. In Thailand, the market has remained subdued for over two months, traders said.
Quotations of Thai 5-percent broken rice plunged to $360-$365 a tonne, FOB basis, from $373-$375 last Wednesday. "There has been little to no trade at all for the past two months," a trader in Bangkok said. A strong US dollar, which has affected purchasing power of foreign buyers, and cheap Vietnamese rice have hurt demand for Thai rice, the traders said. But another trader said prices might pick up again soon. "We couldn't sell much earlier because Vietnamese rice was cheaper. Now that our prices have lowered to match theirs, demand might pick up," he said. In January, Thailand exported over 1 million tonnes of rice worth more than 15.5 billion baht, Thailand's commerce ministry said last week.