Rice prices hit multi-month peak in Thailand and Vietnam this week on export prospects, while high rates in India kept buyers at bay, traders said on Thursday. Thai benchmark 5-percent broken rice rose this week to $385-$411 a tonne, free-on-board (FOB) Bangkok, from $387-$392 last week. At a mean of $398 per tonne, Thai rice prices hit their highest in nine months, Reuters data showed.
Traders said as Thai exporters are still buying stocks to fill shipments, heightened expectations of more demand from some of the world's top importers also helped prices to surge. Last week, Bangladesh's state grains buyer said they will import 600,000 tonnes of rice. It has already issued two tenders for a total of 100,000 tonnes of rice.
"Exporters continue to sell, ships are still being loaded, and big buyers are now coming in," said a Bangkok-based trader. "If buyers keep purchasing, prices will keep increasing," said another trader from Bangkok. Vietnam's 5-percent broken rice was quoted at $365-370 a tonne, FOB Saigon, up from $355-$360 last week, following the trend in Thailand.
Averaging $367.50 per tonne, Vietnamese rice prices are at an 11-month high, according to Reuters data. Anticipating more demand from leading importing countries, Vietnam traders are storing rice in order to sell later as prices advance "People expect demand to jump further so they are not rushing to sell now," said a Ho Chi Minh-based trader.
Vietnam shipped an estimated 1.84 million tonnes of the grain between January and April, down 8.8 percent from the same period last year. Thailand and Vietnam are the world's second- and third-biggest rice exporters. In India, the world's biggest rice exporter, 5-percent broken parboiled rice prices eased by $3 per tonne to $391-$396 a tonne this week on sluggish export demand.
In the past two months, there has been a sharp rise in Indian rates on government buying and as appreciation in the rupee caused a rally in local paddy prices. The rupee has risen more than 5 percent so far this year and is trading near its highest level in 21 months. A strong rupee trims returns of exporters, who cannot afford to cut prices.
"African buyers are shifting to Vietnam. Indian rice is not competitive at the current price level," said an exporter based at Kakinada in the southern state of Andhra Pradesh. India mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East. The Indian government buys rice from local farmers at a fixed price to supply subsidised food and meet any emergency needs such as a sudden spike in prices. The government has bought 36 million tonnes rice from farmers so far in 2016/17, up 24 percent from a year ago.