Thailand's rice export prices extended gains this week on concerns that a drought may cut domestic output, while demand from private Philippine firms has also pushed up prices in Vietnam, traders said on Wednesday. Thailand has cut its main crop output forecast by 9.2 percent to 24.13 million tonnes, as the world's second-biggest rice exporter after India battles a severe drought.
"Many Thai export companies are buying rice because Thais are concerned about the drought," said a trader in Bangkok, adding that external demand was still thin. "There will still be some rice left in the mills but there are still fears for the fields," he said. "There are fears about the drought and that there will be a shortage of rice." Thailand's benchmark 5-percent broken rice rose to $405 a tonne, free-on-board (FOB) Bangkok, from $380-$385 last Wednesday.
In Vietnam, the world's third-largest exporter of the grain, some private firms from the Philippines have been looking to buy 5-percent broken winter-spring rice, which offers the best quality of Vietnam's three crops a year, traders said. "The demand has caused prices to jump," said a trader at a foreign firm in Ho Chi Minh City. The Philippine government has allowed private traders to import up to 805,200 tonnes of rice this year.
Five-percent broken winter-spring rice was quoted at $370 a tonne, FOB, while the same variety from the current summer-autumn crop stood at $345-$350 a tonne, down from $350-$356 last week. But Vietnam's 25-percent broken rice eased to $325-$330 a tonne this week, from $330-$335 a week ago, due to rising fresh supply from the harvest in the Mekong Delta food basket. The harvest peaks this month and ends in early September, before seasonal floods on the Mekong river arrive in the Delta.
LOWER RICE EXPORTS
Thailand's rice exports this year are expected to fall 2.7 percent to 10.9 million tonnes, which will still make it the world's top exporter in 2015, the UN Food and Agriculture Organisation (FAO) said in its rice market report for July. The FAO's forecast is above a projection by Thailand's rice export association, which has lowered its annual target to 9.5 million tonnes from 10 million tonnes. FAO'S forecast for Vietnam's rice exports this year was cut to 6.3 million tonnes, down 2.6 percent from 2014 and a 3-percent drop from the projection in April.
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