Vietnamese rice prices rose to their highest in seven weeks on demand from China and production disruption in the Mekong Delta in southern Vietnam due to rain, while Thai rice prices eased after a brief pickup last week, traders said on Wednesday. In India, prices edged up on demand from Africa and a stronger rupee, traders said.
Quotations rose in Vietnam, the world's third biggest rice exporter after India and Thailand, as China, the world's top buyer, started buying in cross-border trade, traders said. "Rain in recent days has disrupted the harvesting in the Mekong Delta, thus boosting prices," said a trader in Ho Chi Minh City. Quotations of Vietnam's 5 percent broken rice rose to $350-$355 a tonne, free-on-board (FOB) basis, from $345-$350 last Wednesday, placing it above Thai rice for the first time since March 9, based on Thomson Reuters data.
At $355, Vietnamese rice was at its highest since August 31. However, China's rice import this year is expected to fall to 6.8 million tonnes from 7.1 million tonnes in 2015, the UN Food and Agriculture Organization (FAO) said in its October report, keeping its forecast unchanged.
FAO revised down its forecast of Vietnam's rice export this year to 7.2 million tonnes from 8 million tonnes projected in July. India's export volumes at 10 million tonnes and Thailand's at 9.9 million tonnes were kept unchanged. "The fall comes in the wake of a slow pace of white rice shipments to key Asian destinations, such as the Philippines and Malaysia, as well as increasing competition with Thailand over its market share in China (Mainland)," FAO said. Thai benchmark 5 percent broken rice prices slumped to $350-$354 per tonne, FOB basis, from $355-$372 last week.
Prices rose last week as some rice traders were excited by the Thai government's rice storage initiative and its announcement of sale plans with China and Iran. But the excitement waned and the situation has returned to normal, traders in Bangkok said. India's 5-percent broken parboiled rice prices edged up $2 per tonne this week to $367 to $377 per tonne.
"Demand has improved a bit, but still it is lower than usual," said an exporter based at Kakinada in the southern Indian state of Andhra Pradesh, adding that an appreciating rupee has also prompted higher prices in dollar terms. Prices could come under pressure as demand from Africa is still weak and supplies will rise in a few weeks, he added.