Baht and freight cause concern amongst Thai exporters

Thai rice prices were up sharply in the week to Monday, as a strong baht worked to boost prices and keep offers at high levels, exporters said.

"The exchange rate is the main problem. It's getting bad for the exporters as prices are about $10 a (metric) ton higher today free on board basis from a week ago," an executive at a large exporting firm said. "We're unlikely to make any new deals at current lofty prices. Buyers are running away to Vietnam or adopting a wait-and-see stance," the executive said. The U.S. dollar last week weakened to THB33.18, the U.S. unit's lowest level since August 1997.

Exporters also expressed concerns over rising freight rates caused by a shortage of vessels and a stronger baht. Some ocean freighters require additional payments if exporters load more than
14 tons per container, another exporter said. "Normally we can load as many as 21 tons in a container but now freighters are blaming us for such heavy weight and charging extra," the exporter said. Freight costs have increased to about $100/ton, up from $50-$60/ton at the
beginning of the year.

Monday, Thai 100% grade B was offered at $347-$351 a metric ton, FOB Bangkok, and 5% broken rice was offered at $337-$340/ton. These prices are higher by around $10-$13/ton from a week earlier. Parboiled 100% sortexed was offered at $342-$346/ton, compared with $334/ton
last week.