Asian rice prices dropped this week and could come under further pressure after Vietnam removed a floor price for one of its main export grades, while weakness in the baht also allowed Thai exporters lower their offers, traders said. Vietnamese 5 percent broken rice eased to $398-$400 a tonne, free on board, from $405-$410 a week ago, but there were few buyers. Its 25 percent broken rice dipped to $375 a tonne from $380 last Wednesday.
“The market is quiet and prices could drop further,” a trader in Ho Chi Minh City said. Other trades agreed, saying there was no support factor after the Vietnam Food Association stopped setting a floor price for the 5 percent broken grade. An official at Indonesia’s Ministry of Agriculture also said on Monday that the country’s rice surplus would jump by as much as 22 percent to 8.3 million tonnes this year and urged the state procurement agency to scrap plans to import this year.
Traders in Vietnam noted steady demand from traditional buyers, but they were tending to buy from sources offering more attractive prices. “The African market is blocked by sales from India and Pakistan, while China has also slowed buying,” another trader in Vietnam said. India’s common rice grades were quoted at $385-$450 per tonne FOB, almost the same as the previous week.
India, the world’s second biggest rice producer, is continuing with its unrestricted export policy for a third year in a row to sell down surplus stocks. On March 1, stocks at government warehouses were 35.8 million tonnes against a target of 11.8 million tonnes.
In Thailand, exporters lowered their offers due to some slight easing in the baht, which has risen more than 4 percent since the end of last year. The 5 percent broken grade white rice dropped to $545 per tonne from last week’s $565, exporters said. “Although prices are lower, it is still very difficult to attract buyers,” said a Bangkok-based trader. Prices in Thailand remain far higher than those in rival countries because of an intervention scheme under which the government buys above the market price. The policy has helped poor farmers but has slashed export volumes.