Vietnam rice rates scale 8-yr peak as rains hamper harvest

BENGALURU - Vietnamese rice export prices hit their highest in more than eight years as traders struggled to meet rising demand and heavy rains hampered harvest in the Mekong Delta.

A seller displays rice bags for sale at a store in Danang city, Vietnam March 14, 2018. Photo: Reuters

Rates for Vietnam’s 5% broken rice rose to $475 per tonne on Thursday - the highest since early 2012 - from $450-$460 a week earlier.

“Demand remains strong, while supplies are thin,” a trader based in Ho Chi Minh City said.

“Traders are finding it difficult to secure enough rice to fulfil their contracts signed with buyers in Malaysia and Cuba,” the trader said. Other traders, speaking on condition of anonymity, said heavy rains were slowing the summer-autumn harvest in the Mekong Delta.

Vietnam aims to ship 7 million tonnes of the grain this year, higher than last year.

Heavy rains also hit cultivation in Bangladesh, farmers said, submerging tracts of land.

Bangladesh, traditionally the world’s fourth biggest rice producer with an annual output of about 35 million tonnes, often resorts to imports to cope with shortages caused by floods or droughts.

Top exporter India’s 5 percent broken parboiled variety fell to $368-$373 per tonne from last week’s $370-$375.

Importers in Africa and Asia have slowed purchases after large buys in May, said Nitin Gupta, vice president of trader Olam India’s rice business.

India has raised the price at which it will buy new-season common rice varieties from local farmers by 2.9%.

Thailand’s benchmark 5-percent broken rice prices rose to $490-$512 on Thursday, from $489-$490 quoted last week. Traders attributed the increase to a stronger baht.

“There still are some lingering concerns over supply in the domestic rice market despite the recent spell of rain, and this continues to keep the price high,” a Bangkok-based trader said.

Rains have eased supply concerns after one of the worst droughts in decades impacted rice growing areas across Thailand earlier this year.