MUMBAI/DHAKA/HANOI: Export prices of rice from Thailand rose this week due to high shipping costs, which also discouraged traders in Vietnam from signing new contracts.
Thailand’s 5 percent broken rice prices widened to $455-$484 per tonne on Thursday from $457-$468 last week, with traders attributing the uptick to higher freight costs although demand was low.
“The market is quiet now mainly because of the freight costs and the scarcity of ships,” a Bangkok-based trader said.
The slight strengthening of the baht against the dollar recently also played a minor role in the price increase, traders said.
Vietnam’s 5 percent broken rice fell to $480-$485 a tonne from $485-$490 last week.
“Despite the slight decline in Vietnamese prices, buyers are switching to look for rice from Thai exporters who are offering even lower prices,” a trader in Ho Chi Minh City said. High shipping costs continued to discourage the signing of new contracts, traders said.
Vietnam’s rice exports in May fell 19.9 percent from April to 626,750 tonnes. Top exporter India’s 5 percent broken parboiled variety fell to $379-$383 per tonne from last week’s $382-$388, mainly due to a depreciation in the rupee.
“We’re expecting higher area under paddy since the government has raised minimum support price of rice and the monsoon is expected to deliver average rainfall,” said B.V. Krishna Rao, president of the Rice Exporters Association of India.
India on Wednesday raised the price at which it will buy new-season common rice varieties from local farmers by 3.9 percent to 1,940 rupees ($26.59) per 100 kg.
Neighbouring Bangladesh, traditionally the world’s third biggest producer, has set a target to procure 1.8 million tonnes of rice in the current harvesting season to boost domestic reserves, which plunged to a record low this year. Meanwhile, local prices of the staple rose again this week, which officials blamed on hoarding.