Asian rice export prices fall on thin demand

Rice export prices on Asian markets eased further this week in line with weakening currencies in major export nations Thailand and Vietnam, while buying demand was scant, traders said on Wednesday. Recent global market movements have also prompted buyers of Thai rice to delay their purchases, traders in Bangkok said. "The global market is quite volatile and uncertain so they have delayed their purchase to next month," a Thai rice trader said. "So far sales have been quite flat but we still hope there will be new demand toward the end of the year."
Thai 5 percent broken rice weakened to $360-$365 a tonne, free-on-board (FOB) Bangkok, from $360-$380 a week ago. "The Thai baht is still weak and with limited global demand, this has caused the price to stay on the downside at the moment," the trader said. The baht has fallen nearly 7.7 percent so far this year against the dollar, faster than the Vietnamese dong which has lost 5.2 percent in interbank deals and down 5.3 percent on the unofficial markets since the year began.
Vietnam has devalued the dong via three official exchange rate cuts since January 7, each by 1 percent, and also widened the dollar/dong trading band twice this month to 3 percent, from 1 percent before August 12. Chinese buyers, the main clients of Vietnamese rice, have been pressing Vietnamese exporters to cut their export prices, following the dong devaluation, the Agriculture Ministry-run Nong Nghiep Vietnam newspaper quoted a Vietnamese executive as saying.
"They have asked for price reduction in the contracts which have been signed but loading has yet to be executed," the executive at Vinafood 1, Vietnam's second-biggest rice export firm, was quoted as saying. Vietnam's 5 percent broken grain dropped to $335-$340 a tonne, FOB Saigon Port, from $338-$345 a week ago, and the 25 percent broken rice also widened to $320-$330 a tonne, from $325-$330 last Wednesday.
Despite lower prices, foreign import demand was weak, traders said. Vietnam, the world's third-largest rice exporter after India and Thailand, shipped 4.1 million tonnes in January-August, down 8.6 percent from a year ago, the Agriculture Ministry said. Purchases by China, Vietnam's top rice buyer, fell 7.2 percent in January-July period from a year ago to 1.33 million tonnes, the ministry said in its monthly report.