Vietnamese rice export prices rose to near five-month high this week, pushed by China's buying and demand for loading government deals, while Thai rice prices were steady on thin demand, traders said on Wednesday. An absence of new deals due to rising prices in Vietnam and thin demand for Thai rice suggest importing nations have yet to rush for new purchases, even though import demand has been forecast to rise this year, according to a BMI Research report issued on March 8.
Thailand and Vietnam are the world's second- and third-biggest rice exporters after India. Quotation for Vietnam's 5-percent broken rice rose to $375-$385 a tonne, free-on-board (FOB) Saigon Port, from $370-$375 a tonne last Wednesday, with $385 a tonne being the highest since October 28, 2015.
"Prices are too high and nobody cares," a trader in Ho Chi Minh City said, referring to foreign buyers' demand. He said the higher prices were only indicative offers while no new deals were sealed. China, one of Vietnam's biggest buyers, has been taking various types of Vietnamese grain from white rice to fragrant rice, traders said. "China is buying, while farmers are not selling much, so prices advance accordingly," another trader in Ho Chi Minh City said, adding that the hike has made Vietnamese grain uncompetitive.
At Saigon Port loading of some 150,000 tonnes has been under way since late February for Cuba, Indonesia, the Philippines and western African countries, based on a shipping industry schedule. The grain for Indonesia and the Philippines are under contracts signed late last year, with deliveries due to end this month. A dry weather affecting production in the Mekong Delta food basket has prompted Vietnamese farmers to hold back onto their fresh stocks, traders said.
Salination and dryness have affected 160,000 hectares (395,000 acres) of rice so far this year in the Delta, or about 10 percent of the total area planted under a key crop, according to the Agriculture Ministry. In Thailand, quotations for the 5-percent broken rice narrowed to $365-$371 a tonne, FOB Bangkok, from $360-$371 a week ago, traders said. "Everything is quiet. Nothing is going on," a Bangkok-based trader said. Another trader said Vietnamese rice prices were expected to weaken soon as shipments to Indonesia were about to be completed. The fall in prices could make it more difficult for Thailand to sell its grain, he said.