Vietnam rice prices plunge to near 12-year low as demand dries up

BENGALURU - Waning rice supplies in Vietnam pushed export prices to a near 2-month peak this week, while a strengthening domestic currency kept rates of the Thai variety high, subduing demand.

A farmer harvests rice by a paddy field outside Hanoi, Vietnam June 10, 2019. Photo: Reuters

Vietnam's 5% broken rice prices rose to $470 per tonne on Thursday, their highest since mid-June, from $440-$450 last week.

"Supplies are running low as the summer-autumn harvest has come to an end," a trader based in Ho Chi Minh City said, adding that local traders have also been hoarding the grain in anticipation of higher prices.

"Traders have been focusing mainly on fulfilling their export contracts signed earlier with Cuba, Malaysia and the Philippines."

Vietnam will start sowing the autumn-winter crop, and the next harvest won't begin until October, other traders said.

In Thailand, benchmark 5% broken rice prices were quoted at $463-$485, little changed from $465-$483 last week.

"The strong baht (against the U.S. dollar) has really kept the price of Thai rice higher than our competitors and deterred buyers," a Bangkok-based trader said.

Supply remains a concern as the drought earlier in the year affected production.

"We are seeing not much new supply entering the market for the off-season crop despite recent rain, which means the price will likely stay high," another Bangkok-based trader said.

Top exporter India's 5% broken parboiled variety prices were unchanged at $380-$385 per tonne from the previous week.

India's rice exporters are struggling to fulfil orders due to limited availability of containers and workers at mills and the country's biggest rice handling port due to surging coronavirus cases.

"Loading is still limited at Kakinada port due to labour shortage," said an exporter based at Kakinada in the southern state of Andhra Pradesh.

In Bangladesh, the longest-running floods in over two decades have submerged nearly 80,000 hectares of paddy fields, according to officials from the agriculture ministry.