Asian rice: Thai prices gain on fresh demand; rising supply weighs

Fresh demand from Africa and the Middle East helped support Thai rice prices this week, but rising supply capped gains, traders said on Wednesday. The benchmark 100 percent B grade Thai white rice was offered at $500 per tonne, up from $490 last week, they said. "There are several vessels there at Bangkok port, loading around 300,000 tonnes of rice for buyers in Africa and the Middle East," said a Bangkok-based trader.
Another trader said: "There was also demand from Iraq and Bangladesh that helped push Thai rice prices higher." Iraq bought 132,000 tonnes of Thai and US rice in a tender on May 29 to bolster food ration supplies, according to the Iraqi Grain Board. Bangladesh's state grain buyer issued a tender to import 50,000 tonnes of non-basmati parboiled rice to ensure supplies of the staple.
Traders said they did not expect to see any sharp rise in Thai rice prices over the coming weeks despite this demand because farmers have started harvesting the second crop. The crop is likely to produce up to 9 million tonnes of paddy, or around 6 million tonnes of milled rice, the highest ever for this crop. Production is expected to peak in late June.
Thailand is the world's biggest rice exporter. In Vietnam, the second-biggest exporter, rice prices were stable and demand remained weak, with foreign buyers waiting on the sidelines for supplies of fresh grain to rise and prices to drop from late this month, traders said. ??? Harvesting of the summer-autumn crop, the second of the year in the Mekong Delta food basket, will peak by late June and prices are expected to soften. ??? Vietnam's 5 percent broken rice was unchanged from last week at $460-$465 a tonne, free on board.
The 25-percent broken rice was also stable at $430 a tonne. "We are waiting for the summer-autumn crop. Right now there is not much demand," a trader in Ho Chi Minh City said. "There is also not much in stock as the rice from the previous harvest has nearly been loaded, so prices could stay stable until late this June," he said.
When the harvest starts peaking, prices may drop and that could prompt the government to intervene by building stockpiles, but lower prices should also attract buyers, another trader said. Vietnam's annual rice exports are forecast at between 6.5 million and 7.4 million tonnes, against a record 6.83 million tonnes shipped in 2010, industry and government reports have said.