Tuesday, 17 November 2009

Asia Rice-Vietnam prices up on Philippine demand, Thai steady

Vietnamese rice prices were higher this week on the back of a jump in demand for exports after a Philippine tender, traders said on Wednesday.

Quotations for Vietnam's 5 percent broken rice rose to $460 a tonne, free on board (FOB), from last week's $440-$450.

The 25 percent broken rice rose to $420 a tonne, FOB, from $395-$405 last week.

Traders said Vietnamese rice rose after the Philippines awarded Vietnam's top exporter, Vinafood 2, a contract to supply 150,000 tonnes [ID:nMAN377986].

Prices were also supported by Manila's announcement it would tender for another 600,000 tonnes in December. [ID:nMAN394827]

However, prices still lacked momentum to rise sharply and demand from the Philippines alone was not enough, traders said.

"That volume of 150,000 tonnes is not high compared with Vietnam's stock and its loading capacity, so it didn't change prices much," a trader in Ho Chi Minh City said.

The Vietnam Food Association, a rice industry body, said exporters had stocks of 1.8 million tonnes -- the government had told them to buy grain to support the market -- and another 1 million tonnes was held by farmers.

The buying programme helped support domestic paddy prices this week, which were quoted at 4,000-5,000 dong ($0.22-$0.28) per kg against last week's 3,500-5,000 dong.

Vietnam, the world's second largest rice exporter, has contracted to export 6.45 million tonnes so far this year, a jump of 55 percent from the same period last year, an industry report said on Wednesday. [ID:nHAN475441]

In leading exporter Thailand, rice prices were steady, but remained supported as the government continued to buy direct from farmers in order to prop up the market, traders said.

The benchmark 100 percent B grade white rice RI-THWHB-P1 was steady at $550 per tonne, traders said.

They said demand remained poor after Thai exporters came away from the Manila tender empty-handed due to uncompetitive prices.

"Demand was thin and the news on Indian imports was not big enough to lift prices," one trader said.

India said on Monday it had received 18 bids for three rice import tenders totalling 30,000 tonnes, which the government said may be the last foreign purchases needed to boost its domestic supply, hit by the worst monsoon in three decades. [ID:nNSP413298]

Traders in Thailand said India was believed to have bought 25 percent broken grade white rice from Myanmar through international trading houses at around $360 per tonne, cost and freight. They declined to give details on the quantity bought.

Another trader said: "As far as I know, India is buying low-quality rice from Myanmar at cheap prices, but the quantity is too small to lift world prices." (Additional reporting by Ho Binh Minh in Hanoi; Editing by Alan Raybould and Clarence Fernandez)

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