Export prices for Vietnamese rice narrowed this week in thin trade while they slid further for Thai grains on subdued demand and a weakening currency, traders said. Thailand and Vietnam are the world's second and third biggest rice exporters after India, respectively, and both have been struggling to find buyers in a slow market in recent weeks.
Vietnam's 5-percent broken grain was offered for $375-$378 a tonne, compared with $373-$380 last Wednesday, FOB Saigon Port, while the 25-percent broken grain was quoted at $355 a tonne, down from $360 a week before. "There're nearly no fresh orders. The prices now are too high," said a Vietnamese exporter in Ho Chi Minh City, adding recent transactions were mostly with governments.
The Philippines, one of the world's biggest rice importers, plans to seal a deal in January for second-quarter delivery to ensure adequate supply amid worries of drier weather early next year, according to the country's National Food Authority. But the Philippines may buy from other countries rather than Vietnam since the prices are much higher, traders said.
In Thailand, 5-percent broken rice prices sank to $345-$355 a tonne, free-on-board (FOB) Bangkok, on Wednesday, from $353-$365 a tonne last week. Traders in Bangkok said the price slump was due to lack of fresh demand and further weakening of the baht currency. "The upcoming long holidays at the end of year were the reasons for lack of demand," said a Thai trader.
"If there were buyers in the first place, the exchange rate wouldn't have this much impact," another trader said, adding that he expected the Thai rice market to be quiet until the first few months of 2016. Global production in 2015/16 will dip 0.5 percent to 476 million tonnes, the first decline in seven seasons, while consumption will continue to grow steadily, with higher import demand from China, the Philippines and Indonesia, Fitch Ratings' BMI Research said in a report. Lower production could result in a deficit of 11 million tonnes in 2015/16, compared with the 10-year average surplus of 6 million tonnes, according to BMI Research.