Thai rice prices fall to lowest this year

Rice prices in Thailand slid to their lowest this year on sluggish demand and the prospect of higher supplies, while rates eased in top exporter India this week due to subdued buying from Africa and Bangladesh. Thailand's benchmark 5 percent broken rice dropped to $390-$400 per tonne this week, free on board (FOB) Bangkok, from $430-$435 last week. At an average of $395 per tonne, this week's export prices are almost on the same level as the average price of $393-$396 seen in the week of January 4.
A combination of ample supply in warehouses, mills suspending trade, a weaker Thai baht versus the dollar and slow logistics due to the monsoon season pushed prices down, traders in Bangkok said. "The warehouses are full but the ships aren't here," a trader said. Thailand aims to export 10 million tonnes of rice this year.
Rice prices in the country will likely slip further as a new crop is expected to start arriving around the end of June or early July until August, traders said. "Demand is still slow as people are waiting to see if prices will fall further," another trader said. On Thursday, Thailand's commerce ministry however said that there are enough rice purchases by major importers from the beginning of the year to absorb Thai rice supply and stabilize prices until August.
The ministry is also expecting a sixth government-to-government deal with China, which will buy 100,000 tonnes of Thai rice, as well as private deals with major importers Indonesia, Bangladesh and some African countries. Prices in top exporter India also fell this week as demand was subdued from African buyers. Buying from neighbouring Bangladesh also nearly stopped after it imposed a 28 percent tax on rice imports to support its farmers as the country's local production revived.
"Bangladesh is no longer in the market due to (the) duty hike," said an exporter based at Kakinada in the southern state of Andhra Pradesh. India was the biggest supplier of rice to Bangladesh in 2017. Rates for India's 5 percent broken parboiled variety fell by $4 to $394-$398 per tonne.
Rice prices in India have corrected recently due to weak demand, said Nitin Gupta, vice president of the rice business at Olam India. Meanwhile in Vietnam, prices of 5 percent broken rice were unchanged from the previous week at $450-$455 a tonne. "The market has been quiet and there have been no new deals clinched recently, as prices of Vietnamese rice are not as competitive as those of Thai products," a Ho Chi Minh City-based trader said.
"I think prices are under pressure to ease over the coming weeks due to additional supplies from the ongoing spring-summer harvest," the trader said.