Demand steady but expecting fresh supplies: Bangkok trader

A man compares different grains of rice at a wholesale market in Navi Mumbai, India, on Aug 4, 2023. (Photo: Reuters)

Vietnam’s rice exports are estimated at 6.5-7.0 million metric tonnes this year, down from last year’s record high of 8.1 million tonnes, according to a report by the Vietnam Food Association.

The Southeast Asian country, the world’s third largest rice exporter after India and Thailand, has earlier flagged that it would gradually cut its overall export volumes to focus on higher quality, higher priced rice, while also adapting to climate change and ensuring domestic food security.

Exports in the year to mid-February rose 14.4% from a year earlier to 663,000 tons, according to the report presented at an international rice conference this week and reviewed by Reuters.

“Demand from Indonesia, Philippines, Malaysia, China and Africa has been increasing as El Nino expected to last at least until mid-2024,” the report said.

Vietnam said last year it would cut annual rice exports to 4 million tonnes by 2030, according to a government document detailing its rice export strategy. It also said the country would seek to diversify its rice export markets and cut residues of plant protection products including pesticides in its rice

India’s rice export prices surged to a record high this week as traders sought clarity over how the export levy is calculated, while those in Thailand awaited fresh supplies to hit the market.

Top exporter India’s 5% broken parboiled variety was quoted at a record $552-$560 per tonne this week, up from the last week’s $546-554

Indian traders are signing few new contracts for exports of parboiled rice after customs officials changed the calculation method for the 20% export duty, resulting in a higher levy, four industry officials told Reuters earlier this week.

“Buyers are not ready to pay record prices. Sellers have limitations since the customs guys have changed the way they calculate duty,” said an exporter based at Kakinada in the southern state of Andhra Pradesh..

Thailand’s 5% broken rice prices rose to $620-$622 per ton, from $615 quoted last week.

A Bangkok-based trader said that prices climbed because demand was steady, but expected crops to come in the following week.

Vietnam’s 5% broken rice was offered at around $580, down from $600 a week ago but up from $575 earlier this week.

“Many importers are not rushing to buy as they know that Vietnam’s main harvest is peaking,” a trader based in Ho Chi Minh City said.

“Prices, however, are recovering as rice production is still facing the adverse impacts of El Nino phenomenon this year,” the trader said, adding that domestic traders are now buying to increase their inventories.

The Bangladeshi government has been struggling to control prices of the staple grain despite good harvest and reserves.

Bangladesh will distribute 150,000 tonnes of rice among 5 million families at subsidised rates before the Muslim holy month of Ramadan, the country’s food minister said.

Published Date: March 9, 2024