Asian rice prices steady

Asian rice prices remained at relatively high levels this week, with Vietnamese prices still supported by loading demand and Thai prices helped by the prospect of government intervention ahead of an upcoming election, exporters said.
Prices in Vietnam, the world's second-biggest exporter, rose slightly because of strong demand to fill outstanding orders over coming weeks, traders said, noting a major harvest had now ended. Export quotations for its 5 percent broken rice rose to $480-$485 a tonne, free-on-board, from last week's $475-$480. The 25 percent broken rice stood unchanged at $445-$450 per tonne.
"Less rice is coming into domestic markets now than during the harvest," a trader said. Vietnam's rice exports in the first four months of 2011 rose 17.4 percent from a year ago to an estimated 2.58 million tonnes, the government said last week.
That volume accounts for an estimated 67 percent of the rice available for export in the first months of 2011, which included around 3 million tonnes from the latest winter-spring crop and 840,000 tonnes carried over from last year. Vietnam has contracts to load some 900,000 tonnes of rice in May and June, Vietnam Food Association data shows. In Thailand, the world's biggest exporter, rice prices were steady at relatively high levels although farmers have started harvesting a bumper second crop, traders said.
The benchmark 100 percent B grade white rice was offered unchanged at $500 per tonne on Wednesday, they said. The second crop is likely to produce record high output of 9.5 million tonnes of paddy. Production is likely to peak in June-July but prices are unlikely to fall sharply for political reasons, exporters said.
Prime Minister Abhisit Vejjajiva intends to dissolve parliament in early May and an election would then have to be held 45-60 days later, at the end of June or early July. The outgoing government is expected to do everything it can to support farmers during that period. More than 20 million people - farmers and their families - depend on rice for their living in Thailand out of a population of 67 million.
"No one, including politicians or the caretaker government, wants to see rice prices falling. They will do everything to support farmers to attract votes. So I don't think rice prices will drop over the next few months," one exporter said. In March, the government raised the minimum guaranteed prices that farmers get for rice to 11,000 baht ($367) per tonne from 10,000 baht after farmers staged sporadic protests to demand higher subsidies.