Vietnamese rice prices dipped amid thin demand, with an outlook for sluggish trading in the next few months fanning concern that prices could fall further if no fresh demand emerges to absorb the new crop early next year, traders said on Wednesday.
The price of 5-percent broken rice fell to $422 to $440 a tonne, free-on-board basis, from last week”s $445 to $455. The 25-percent broken variety dropped to around $400 from $420 to $425 last Wednesday. “We are worried about it as the winter-spring crop is coming and we haven”t got contracts going into the next year. If there are no new contracts, prices may drop,” an exporter based in the Mekong Delta food basket said.
The winter-spring crop is Vietnam”s biggest and most of the grain is exported. The harvest often peaks in March. Vietnam”s rice exports between January and November rose 9.7 percent from a year ago to an estimated 7.44 million tonnes, the Agriculture Ministry said, led by Chinese purchases and already a record for annual shipments.
Early this year China stepped up purchases of Vietnamese rice, having seized the top buyer position from Indonesia. However, China is now switching to buy from Pakistan, pushing prices of Pakistani rice slightly higher than its competitor India, traders said.
“China bought 50,000 tonnes of Pakistani rice for January shipment at $430 per tonne FoB basis,” said Chander Pal Khamuani of Karachi-based Kanwal Trading Company. Pakistani 5 percent broken grade was offered at $430 to $440 per tonne, slightly higher than Indian offer for the same grade of $425 to $435 a tonne, traders said. The Indian rice market slowed this week after selling a lot of rice in the first half, traders said.
“Until now, India was believed to have sold 5 million to 7 million tonnes,” said a Bangkok-based trader. Trade in Thailand revived, but was not very busy, with some small lots of premium grade being shipped to traditional buyers. “They are small lots of fragrant rice and glutinous rice, which are not available in Vietnam and India, that we have sold. Overall the market outlook was still sluggish,” said another Bangkok-based trader. Despite thin demand, Thai rice prices were unchanged as the government intervention lent support, exporters said.
Benchmark 100 percent B grade Thai white rice was offered steady at $555 per tonne, while the 5 percent broken grade was offered unchanged at $550 per tonne, they said. Thai rice prices are expected to stay relatively high next year as the government renewed in October its rice buying scheme that is expected to run through 2013.