Asia Rice-African demand boosts Vietnam rates, India prices dip to 4-month low

Vietnamese rice export prices rose to their highest in two months this week as demand from African buyers increased, while prices in top exporter India fell to a four-month low on sluggish demand.

A worker cultivates rice plants at Sompot Tubcharoen's farm in Bangkok, Thailand August 28, 2018. Photo: Reuters

Rates for 5% broken rice in Vietnam rose to $350 a tonne, matching early August’s peak, from $330-$340 a tonne a week ago.

“Demand seems to be recovering now with more vessels waiting to be loaded at Ho Chi Minh City ports,” a trader based in the Mekong Delta province of An Giang said.

Preliminary data showed at least 70,600 tonnes of rice are scheduled for loading at Ho Chi Minh City ports during October 1-20, with most bound for West Africa and Malaysia, traders said.

Africa’s demand for Vietnamese jasmine rice has increased significantly recently, a Ho Chi Minh City-based trader said.

Customs data released on Thursday showed September rice shipments from Vietnam fell 20.4% from August to 479,363 tonnes. However, shipments in the January-September period rose 3.7% from a year earlier to 5.06 million tonnes.

In contrast, softer demand from African countries for India’s 5 percent broken parboiled variety saw prices extend losses to touch their lowest level in nearly four-months at $368-$372 per tonne from $369-$373 a week ago.

“African countries have ample inventories. They are not active in the (Indian) market now,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

India’s rice exports in August fell 29% year-on-year to 644,249 tonnes, government data showed..

Weak demand also weighed on the Thai market, with benchmark 5-percent broken rice 1 prices narrowing to $396-$400 a tonne from $396-$417 last week.

“It doesn’t look like there will be fresh demand for Thai rice in the short term, even well into next month,” a Bangkok-based trader said.

The baht, Asia’s best performing currency this year, has been one of the main factors keeping prices of the Thai variety higher than competitors.

“The market is expecting new supply after the end of the rainy season this month,” another Bangkok-based trader said.

Elsewhere, Bangladesh’s rice output from the summer crop also known as ‘Boro’, hit a record 20.4 million tonnes, exceeding a target of 19.5 million tonnes, on higher acreage, said Mizanur Rahman, a senior official of the Department of Agriculture Extension.

However, the bumper harvest failed to cheer farmers who have incurred huge losses this year from high production costs and low domestic prices.

Boro usually contributes more than half of Bangladesh’s typical annual rice production of around 35 million tonnes.