Thai rice export prices widened on Wednesday as prospects of higher exports to China and Iran brightened and on a government plan to stockpile at least 10 million tonnes, while prices in Vietnam edged up on demand from the Philippines, traders said. The Thai benchmark 5 percent broken rice prices widened to $355-$372 per tonne, free-on-board basis, against $365-$370 last Wednesday.
Thin demand prompted some traders to lower quotations, a trader in Bangkok said. "Demand is still thin, so prices drop," he said. Meanwhile, other traders saw some support in the government's rice storage initiative announced on Tuesday, which was aimed at preventing an oversupply to stabilize prices by taking 10 million tonnes off the market.
"There is some upward movement today, as the government announced some measures to hold back some rice from the market yesterday," the trader said. On Tuesday, the Thai government said it would sell 100,000 tonnes of rice to China within the next month, part of China's planned purchase of 1 million tonnes in a government deal agreed last year.
Thailand also aims to export 700,000 tonnes of rice to Iran annually. Thailand's rice exports this year could rise 11 percent from 2015 to 10 million tonnes, the US Department of Agriculture attache in Thailand said in a report. In Vietnam, prices rose led by demand from private traders in the Philippines at the end of a harvest in the Mekong Delta food basket, traders said.
Philippine traders are seeking to import 326,325 tonnes from Thailand and 280,375 tonnes from Vietnam, according to the National Food Authority list as of October 6. Vietnam's 5 percent broken rice prices rose to $345-$350 a tonne, FOB basis, from $335-$340 a week ago. At $350 a tonne, the price of 5 percent broken rice is the highest since September 14.
The 25 percent broken variety also rose to $330-$335 a tonne, from $325 last Wednesday, above the $320-per-tonne floor set by the Vietnam Food Association. "Prices are rising also because of some demand from China," a trader at a foreign firm in Ho Chi Minh City said. In India, the world's top rice exporter, prices of the 5 percent broken parboiled rice variety were steady at $365-$375/tonne as demand remained sluggish. "We haven't seen any improvement in demand from African buyers," said an exporter in the southern state of Andhra Pradesh, adding prices have already corrected on expectations of higher supplies.