Loading demand, speculation push Thai rice higher; Vietnam prices up on stockpiling

Demand for loading as well as speculation about more aggressive intervention by the next Thai government pushed Thai rice prices higher this week and Vietnamese prices rose on the back of a state stockpiling plans, traders said on Wednesday.
The price of Thailand's benchmark 100 percent B grade white rice rose to $525 per tonne from last week's $520, they said. "Prices were supported by busy loading demand as we sold a lot of rice in May, and shipments are from May to July," one exporter said.
In May alone Thailand shipped 1.3 million tonnes of rice, more than double the volume of 618,900 tonnes in May 2010. Orders from Iraq and Bangladesh helped push up the total. Iraq has bought 132,000 tonnes of Thai and Uruguayan rice to bolster food ration supplies, according to the Iraqi Grain Board.
Bangladesh has bought 50,000 tonnes of non-basmati parboiled rice from Thailand at $509 a tonne including cost and freight. On top of this real demand for loading, some millers in Thailand, the world's top rice exporter, bought from farmers in the hope of reselling to the state later in the year. The Puea Thai Party, a favourite in opinion polls to win the July 3 election, says it will buy rice from farmers at 15,000 baht per tonne and keep it in stockpiles to support prices. That is about 80 percent above the current market level. "Around 2 million tonnes was expected to be hoarded by millers across the country," said a local trader in Ayutthaya province, a major Thai rice area.
VIETNAMESE PRICES FIRM In Vietnam, the world's second-biggest rice exporter after Thailand, export prices were stable this week and demand was thin. On domestic markets prices eased slightly ahead of the harvest peak, even though the Vietnam Food Association is pushing a plan to stockpile rice, traders said. Vietnamese exporters will stockpile 1 million tonnes of milled summer-autumn rice for three months beginning July 15.
Vietnam's 5 percent broken rice was offered at $460-$465 a tonne on Wednesday, free on board, against $465 on Monday and $465-$475 a week ago. The 25 percent broken rice was quoted at $420-$435 a tonne versus $420-$430 on Monday and $425-$440 last week. "There's not much grain in stock now, but fresh rice is coming so prices are falling," a Vietnamese exporter based in Ho Chi Minh City said.
Another exporter said summer-autumn paddy prices in the Delta, Vietnam's food basket, were little changed just above 5,000 dong per kg as the stockpiling plan would not get under way for another month. Traders said the market remained quiet as foreign demand had not picked up yet, even though buyers were returning before the summer-autumn harvest enters its July peak. Vietnam could export 3.9 million tonnes of rice in the first half of this year, compared with its contracted volume so far this year of 4.47 million, state-run media cited Vietnam Food Association reports as saying. The country shipped 3.46 million tonnes of rice in the first six months of 2010 and full-year exports reached a record 6.83 million, government data shows.