Asia Rice-Thai rates gain as drought hits supply; Vietnam eyes S.America market

BENGALURU - Rice export prices in Thailand rose this week on worries that the country’s worst drought in about a decade could further squeeze supply, while Vietnam explored potential deals in the south American market.

A farmer harvests rice on a rice paddy field outside Hanoi, Vietnam, June 7, 2018. Photo: Reuters

Thailand’s benchmark 5-percent broken rice RI-THBKN5-P1 prices rose to $406-$425 a tonne on Thursday from $395-$405 quoted last week.

“Harvesting has started in some areas and the dry conditions have affected the quality of the rice ... which led to an increase in domestic rice prices,” a Bangkok-based trader said.

Water levels in dams nationwide are far short of the monthly average, Thailand’s meteorological department said.

“Many exporters are also trying to buy rice to shore up their stocks amid concerns over a possible shortage, and this drove the price up,” another rice trader said.

Thai prices were also higher than other Asian hubs, with a strong baht also contributing to the high rates even as demand remained flat.

Meanwhile, Vietnam’s rates for 5% broken rice RI-VNBKN5-P1 remained unchanged from last week at $340-$350 a tonne.

Preliminary data showed 103,000 tonnes of rice is to be loaded at Ho Chi Minh City ports during Aug. 2-10, with 42% bound for West Africa, 29% for Iraq and the remainder for the Philippines and Malaysia.

A delegation from the Vietnam Food Association was in Mexico earlier this week to seek opportunities to ship Vietnamese rice to south America as the country was seeking new markets for the grain, a source with the association said.

Data from the Ministry of Agriculture and Rural Development released on Wednesday showed Vietnam exported 651,000 tonnes of rice in July, beating a government forecast of 600,000 tonnes.

Prices for top-exporter India’s 5 percent broken parboiled variety RI-INBKN5-P1 fell to around $377-$381 per tonne this week from $381-$384 last week due to a depreciation in the rupee.

“As the government has procured a large amount of paddy rice, supplies are limited in the market. Exporters have to pay higher prices for paddy,” said Ashwin Shah, director at Shah Nanji Nagsi Exports Pvt. Ltd, an exporter based in Nagpur in central India.

India’s rice exports are likely to fall to their lowest in seven years, industry officials said, on weak demand from Africa and as shippers absorb the lack of government incentives that supported previous sales.

In neighbouring Bangladesh, floods washed away crops that would have yielded nearly 400,000 tonnes of rice, according to estimates from the agriculture ministry.