India, Vietnam race in rice market
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Rice prices gained this week in India as Bangladesh continued to lap up the staple grain from its neighbour, while prospects of deals with the Philippines saw rates climb for the first time in three weeks in a relatively quiet Vietnamese market.
In Vietnam, benchmark 5 percent broken rice rose to $400 a ton, free-on-board (FOB) Saigon, ending a three-week flat trend within the $390-$395 range, and boosted by prospects of deals with the Philippines, traders said.
“Prices edged up on market talk that the Philippines would invite tenders to buy 250,000 tonnes at the end of January,” a trader in Ho Chi Minh City said.
However, trading remained thin due to depleted stocks in the world’s third-largest rice exporter, while Vietnam’s major winter-spring crop would be ready only by the end of February, traders said.
Vietnam plans to sell close to a 23 percent stake in the country’s main rice exporter Vinafood II through an initial public offering.
Top exporter India’s 5 percent broken parboiled rice prices rose by about $2 per tonne this week to $423-$427.
Traders from Bangladesh are aggressively buying new-season crop since prices in Bangladesh are still elevated, said an exporter based in Kakinada in the southern state of Andhra Pradesh.
India’s rice exports likely jumped 22 percent in 2017 to a record 12.3 million tonnes as Bangladesh ramped up purchases after flooding damaged its crops.
“Prices edged up on market talk that the Philippines would invite tenders to buy 250,000 tonnes at the end of January,”
As of the end of December, farmers in India had cultivated winter-sown rice on 1.88 million hectares, 44 percent higher than a year earlier.
Prices were also higher in another major Asian exporter, Thailand, with the country’s benchmark 5 percent broken rice gaining to $395-$410, FOB Bangkok, from $393-$396 last week on an appreciating baht and lower supplies.
The baht has gained 1.6 percent versus the U.S. dollar so far this year and been Asia’s best-performing currency.
“Rice prices have increased due to a stronger baht, lower supplies due to the effects of floods, as well as a recent 200,000-tonne export deal with Indonesia,” a Bangkok-based rice trader said.
The Ministry of Commerce forecast Thailand to export 9.5 million tonnes of rice, worth $4.7 billion, in 2018.
“I think this target is achievable. It’s lower than last year’s record figure of over 11 million tonnes probably due to a stronger Thai baht and bad weather conditions affecting supplies,” said another trader based in Bangkok, adding, “Demand has remained fairly constant.”
Thai prices are likely to be on an upward trend over the next few weeks, traders said.
Questions & Answers
Q.Why have rice prices increased in India this week?
Why have rice prices increased in India this week?
Prices for India's 5 percent broken parboiled rice rose by around $2 per tonne this week. This was primarily due to aggressive buying of new-season crop by traders from Bangladesh, where prices remain high after flooding damaged local crops.
Q.What caused the recent rise in Vietnamese rice prices?
What caused the recent rise in Vietnamese rice prices?
Benchmark 5 percent broken rice in Vietnam climbed for the first time in three weeks to $400 a ton, ending a flat trend. This increase was boosted by prospects of deals with the Philippines, with market talk suggesting tenders for 250,000 tonnes.
Q.What factors are driving the upward trend in Thai rice prices?
What factors are driving the upward trend in Thai rice prices?
Thai rice prices are increasing due to a strengthening baht, which has gained 1.6 percent against the U.S. Dollar this year. Lower supplies, a result of flood effects, and a recent 200,000-tonne export deal with Indonesia are also contributing factors.
Q.Why is trading thin in Vietnam despite rising prices?
Why is trading thin in Vietnam despite rising prices?
Trading in Vietnam remains thin despite the price increase. This is because stocks are depleted in the country, which is the world’s third-largest rice exporter. The major winter-spring crop will not be ready until the end of February.
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