Buyers seeking Thai rice to cover shortage due to port congestion in India has lifted prices in the world's top export nation this week, while demand from China and Africa also helped boost Vietnamese rice prices, traders said on Wednesday.
Indian rice is cheaper than Thai and Vietnamese grains, but traders said India's shipping infrastructure could not cope with high export volumes.
"There's a problem with rice loading in India because of busy traffic and congestion at ports in India," a trader in Thailand said.
"Buyers need Thai rice to cover the shortage. This is just short covering. A longer term trend remains weak because the prices of Thai rice are higher than Vietnam's and India's," the trader said.
An Indian government panel reviewed the rice export scenario earlier this month and has decided to continue with the free export policy on common rice, as the country has huge stocks.
Thai benchmark 100 percent B grade white rice rose to $540 per tonne, free-on-board (FOB) basis, from last week's $535 per tonne because of the logistics problems in India. The 5 percent broken grain also rose to $530 a tonne, from $525 a week ago.
Export and domestic prices in Vietnam also edged up as farmers expected member companies under Vinafood 2, the country's largest rice exporter, to buy 3.8 million tonnes of winter-spring paddy for stockpiling, traders said.
The volume represents a third of the crop's output.
Vietnam's 5 percent broken grade white rice was offered at $410-$420 a tonne, FOB Saigon Port, against $400-$430 last Wednesday, while the 25 percent broken grain rose to $385 a tonne, from $375-$380 a week ago.
Separately, the Agriculture Ministry said it was seeking government approval on the stockpile of 1 million tonnes of milled rice to help prevent price falls during the harvest peak.
"The news on stockpiling has boosted sentiment and farmers held back rice or raised their selling price a bit," an exporter in the Mekong Delta said. "It helps domestic prices stand, instead of falling due to the ongoing harvest."
Farmers in the Delta have been harvesting the winter-spring crop and supplies will be plentiful next month at the harvest peak. The crop is Vietnam's largest, used mostly for export.
"Many small ships have been taking rice from the Mekong Delta ports to the north for China, this demand also helped prices," a trader at a foreign company in Ho Chi Minh City said.
Vietnam's rice exports to China, Hong Kong and Taiwan in January nearly tripled to a combined 27,200 tonnes, from 10,400 tonnes in January 2011, Agriculture Ministry data show.
Vietnam exported 100,000 tonnes to Hong Kong in 2011, making up a third of Hong Kong's total rice imports, from less than 1 percent in 2007, the Vietnam News daily quoted a Hong Kong rice industry official on Wednesday as saying during a Vietnam visit.
Vietnam normally exports jasmine rice to Hong Kong. Traders said Indonesia has yet to arrive to seek Vietnamese rice, as it could wait for more price falls. Earlier this month Indonesia said it would import 2 million tonnes of rice in 2012.
Comments
Comments are closed for this article.