Rice prices in Thailand and Vietnam received a major boost this week from a potential deal with Indonesia, while robust demand from Bangladesh propelled rates higher for the staple grain in top exporter India. In Thailand, the world's second-biggest rice exporter, benchmark 5 percent broken rice was quoted at $415-$420, free-on-board (FOB) Bangkok, up from $395-$410 last week.
The Indonesian government said on Monday it had assigned state logistics agency Bulog to import up to 500,000 tonnes. The agency said it was looking to purchase the rice from Thailand, Vietnam, and Pakistan. "The price has gone up due to a possible deal with Indonesia. But we will only know after the auction next week how much of the 500,000 tonnes will be imported from Thailand," said a Bangkok-based trader.
"Apart from Indonesia, the market remains quiet and there are no looming deals in sight." Meanwhile, rice prices in India jumped on strong demand from neighbouring Bangladesh, which has emerged as a major importer of the grain since 2017 after floods damaged its own crops.
India's rice exports likely jumped 22 percent in 2017 to a record 12.3 million tonnes as Bangladesh ramped up purchases. In India, the 5 percent broken parboiled rice prices rose by $9 to $432-$436 per tonne, with the gains also supported by expectations of demand from Philippines and Indonesia, traders said.
"Bangladesh is aggressively buying. Now expecting strong demand from Philippines and Indonesia, traders have increased prices," said an exporter based in Kakinada in the southern state of Andhra Pradesh. Sensing good export demand Indian mills are ramping up purchases but supplies are limited, which is pushing up prices, said another exporter.
The Philippines plans to import 250,000 tonnes of rice, an official of the state's grains procurement agency said on Wednesday.
Prospects of deals with the Philippines and more recently with Indonesia have raised export prices in Vietnam, which barely saw any offers secured this week as traders were reluctant to commit to any new contract amid depleting stocks. The next harvest is due in late February. Prices in Vietnam rose to as high as $420-$430 a tonne, FOB Saigon, for the benchmark 5-percent broken rice, but traders said that is "not tradable".
"Those are just reference prices; no one is willing to strike a deal now as there's no stock left, not until late February, early March," said a Ho Chi Minh-city based trader. Another trader said there could be some stock, about 200,000 tonnes, left in state rice companies - just enough to bid for the government deals with Indonesia and the Philippines.
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