Asian rice prices set to fall on rising supply, thin demand
Asian rice prices slipped and were set to keep dropping on limited demand and with harvests beginning as Thailand's intervention scheme grinds to a halt, traders said on Thursday. Thailand's common grade 5-percent broken white rice stood at $420 per tonne, down from last week's $435-$440. "There are no positive factors to support prices. Farmers have started harvesting the second crop and the government buying scheme has expired," said a Bangkok-based trader.
Copyright Reuters, 2014
Farmers in Thailand have started reaping their second crop, with around 10 million tonnes of rice coming onto the market. Thailand's rice-buying scheme, under which the government paid farmers around 50 percent above market prices for paddy, expired on February 28 and the caretaker government has no power to renew it. Traders said there were some small orders from the Middle East and Africa, but these were not big enough to help support prices at a time when supply was rising.
In Vietnam, prices also dropped as farmers began gathering the winter-spring crop in the Mekong Delta, the country's main growing area, with harvesting expected to peak around mid-March. Vietnam is the world's second-largest rice exporter after India. Agriculture Minister Cao Duc Phat last week told a cabinet meeting that domestic firms would on March 15 start a month-long purchase of rice for stockpiling, a state-run newspaper reported.
"In recent weeks fresh supplies were low and there was no significant buying," said a trader in Ho Chi Minh City, adding that the harvest had been quickening in recent days. Vietnamese 5-percent broken rice was quoted at $375 a tonne, on a free-on-board basis, down from last week's $380-$400 for loading from the second half of April.