Asian rice prices to stay firm for few months in Thailand

Asian rice prices were little changed this week and fresh demand was light, but prices were likely to hold at relatively firm levels for a few months in Thailand due to possible pre-election intervention by the government, traders said on Wednesday. The prices of benchmark 100 percent B grade Thai white rice was steady at $500 per tonne, exporters said. "Overall demand was thin, but there was demand for parboiled rice from Africa and that helped support prices in general," a Bangkok-based trader said.
Traders said around 200,000 tonnes of Thai parboiled rice was sold to African buyers for shipment in May. Prices might drift down over the next few weeks due to rising supply as farmers in some areas have started harvesting Thailand's second crop, which is expected to produce a record 9.5 million tonnes of paddy or around 6 million tonnes of milled rice.
But traders said they did not expect any sharp drop in prices as they believed the outgoing government would do everything it could to support farmers and try to win their votes ahead of a general election on July 3. More than 20 million people - farmers and their families - depend on rice for their living in Thailand out of a population of 67 million.
Thailand is the world's biggest rice exporter. It has shipped 3.6 million tonnes so far this year, up from 2.1 million tonnes in the same period last year. It aims to sell at least 9.0 million tonnes in 2011. In Vietnam, the world's second-biggest exporter, rice prices were stable, traders said.
However, the absence of fresh demand and disruptions to rice operations in the Philippines, a top grain buyer, were likely to weigh on prices in the near term, they said. Export quotations for Vietnam's 5 percent broken rice stood unchanged this week at $480-$485 a tonne, free-on-board, exporters said. The 25 percent broken rice was stable at $445-$450 a tonne.
"A storm hit the Philippines and slowed down the rice business and loading," a Ho Chi Minh City-based exporter said." But the storm season in the Philippines could affect output there and that may stimulate new demand, he said. This week, storms killed 15 people and caused minor damage to rice and corn farms in the Philippine's central Bicol region.
The Price Control Department of Vietnam's Finance Ministry has said that rice export prices in May would remain stable due to high stocks in India and China, while the Philippines, Indonesia and Bangladesh had nearly finished building up their stocks.
China has bought around 200,000 tonnes of Vietnamese rice so far in 2011, some 7.8 percent of Vietnam's total rice exports between January and April, the Vietnam Food Association said. It forecast Vietnam's rice exports this year would reach 6.5 million tonnes, against a record 6.83 million in 2010.