Asian rice prices drop

Demand from African buyers provided some support for Asian rice prices last week, stopping them from falling significantly at a time when supply is rising in the world's top two exporters, Thailand and Vietnam, exporters said on Wednesday.
Around 10 vessels were at Bangkok port loading a total of around 200,000 tonnes, mostly parboiled rice for buyers in Africa, they said. Thailand's benchmark 100 percent B grade white rice was offered at $490 per tonne, down from $500 last week. The 100 percent parboiled grade was at the same level.
"Prices could have dropped further than these levels, but there was demand from African buyers and that helped support prices at a time when supply is about to peak," said a Bangkok-based trader. Farmers in Thailand have started harvesting the second crop, which is likely to produce up to 9 million tonnes paddy, or around 6 million tonnes of milled rice, the highest ever for this crop. Production is expected to peak in late June.
Another 15 vessels left Vietnamese port last week with a combined 156,363 tonnes of rice for Asian and African countries, industry reports showed. Rice prices in Vietnam also eased slightly this week because of coming fresh supplies, traders said. Stocks were higher than loading demand and foreign buyers have been absent of late.
"The new crop is coming so prices are tending to fall now," said an exporter from the Mekong Delta province of Kien Giang, noting that buyers had yet to step up their purchases. Vietnamese 5 percent broken rice dropped nearly 1.5 percent to $460-$465 a tonne, free on board, from $465-$475 last week.
The 25 percent broken rice was steady at $430 a tonne, against $425-$440 last Wednesday. The summer-autumn rice harvest is due to peak in July in the Mekong Delta. The crop is the country's second-largest, after the winter-spring harvest that ended last month. Vietnamese exporters have signed deals for a combined 3.9 million tonnes so far in 2011, around 3 million tonnes of which would be loaded by the end of this month, while exporters were holding more than 1 million tonnes in stocks, industry reports show.
INDIAN EXPORTS EYED Traders said they feared India would remove its ban on non-basmati exports in the second half of this year, which could bring global rice prices down sharply. "Some Indian traders told me there was plenty of rice in several states and stocks are now very high and they expected the Indian government to relax its export ban soon," said a Singapore-based trader.
India, the world's second-biggest rice producer, imposed a ban on non-basmati white rice in October 2007 when severe drought damaged rice crops, in a bid to save food for home use. The ban meant that the 4 million tonnes of rice India exports annually was drained from the market, raising fears about food security across the world and pushing Thai rice to a record high of $1,080 per tonne in April 2008.
Indian rice inventories have risen to 27.8 million tonnes against a target of 12.2 million tonnes, government sources said. India was also forecast to produce 102 million tonnes in 2010/11(July/June). Indian Farm Minister Sharad Pawar said India should allow exports of rice and wheat now the country has huge grain stocks and global prices are favourable.