Rice prices in Thailand were little changed this week amid government initiatives aimed at boosting the domestic market, while rates for the staple grain in India fell due to sluggish demand and fresh supplies. Thailand's benchmark 5-percent broken rice was quoted at $375-$387 a tonne, free-on-board (FOB) Bangkok, compared with $382-$386 a tonne last week. The country's Ministry of Commerce has introduced policies including payments of 1,500 baht, or about $45 per tonne, to farmers to encourage them to store rice in warehouses to avoid oversupply.
Some rice traders welcomed the move, while others were sceptical about its success. "In the past, there wasn't enough space in these warehouses," said one Bangkok-based rice trader. Thailand's Ministry of Agriculture has been trying to promote Thai rice by joining forces with Alibaba Group Holding Ltd in China to sell the grain via the e-commerce giant's online platform. But, despite all the efforts, demand remains relatively low, traders said.
"I think the government's efforts are good because it opens up new markets for Thai rice. However, the quantity will probably not be much because these are mainly new buyers," said another Bangkok-based rice trader. Top exporter India's 5 percent broken parboiled rice prices eased by $3 to $397-$400 per tonne on sluggish demand and as supplies from a new season crop started in southern India. "African buyers are on the sidelines," said an exporter based in Kakinada in the southern state of Andhra Pradesh. India mainly exports non-basmati rice to African countries.
Bangladesh, which has become a major importer this year after floods hit its crops, has signed a deal with India's PEC to import 100,000 tonnes of parboiled rice at $455 a tonne, including cost, insurance and freight (CIF) liner out basis, officials at the state grains buyer said. Despite deals with several rice exporting countries including Vietnam, Cambodia and Myanmar, Bangladesh is still battling to build its reserves. Rice at government warehouses stood at 411,000 tonnes, well below the normal level of around 1 million tonnes.
The US Department of Agriculture forecasts Bangladesh's rain-fed rice output at 13.1 million tonnes, about 350,000 tonnes less than last year's yield. The rain-fed Aman variety of rice, which grows typically during the July-September monsoon season and is currently being harvested, accounts for about 40 percent of the country's total production. Meanwhile, the rice market in Vietnam remained quiet amid high price levels, traders said, quoting an unchanged $405 per tonne for 5-percent broken rice, FOB Saigon.
"We barely see any demand. And, we are also running out of stocks at the end of the season," a trader in Ho Chi Minh City said. Floods caused by Typhoon Damrey swamped over 9,300 hectares (22,980 acres) of rice in the central provinces, Vietnam's disaster prevention agency said. However, Damrey, the country's deadliest storm this year, did not hit the major rice bowl in the Mekong Delta.