Rice Prices Rise On Dwindling Supply

Asian physical rice prices rose late yesterday afternoon on dwindling paddy supply in Thailand and Vietnam, while trading was lackluster due to high export prices, exporters said.

In Thailand, tight paddy supply following monsoon rains slowed operations, while prices rose further as the government hasn't released rice stocks, exporters said.

"We expect prices to be on an upward trend until next month, when the new crop will be harvested," one exporter said. "There are no buyers right now because prices are too high," a second exporter said.

Wednesday, Thai 100% grade B rice was offered $2 higher from Friday at $333-$335/ton, FOB Bangkok, 5% broken was offered $2-$5 higher at $324-$325/ton, while parboiled 100% sortexed was also offered around $2 higher at $324-$333/ton.

Meanwhile, Thailand's rice exports from Jan. 1 to May 29 rose by 11.1% on year to 3.30 million metric tons, the Commerce Ministry's Department of Foreign Trade said Wednesday.

Rice exports from May 1-29 totaled 636,720 tons, up 9.9% on year. In Vietnam, rice export prices were mostly higher from Friday on limited supply and strong demand in the local market, as exporters sought supplies to fulfill outstanding contracts, exporters said.

Fresh supply of paddy will arrive in the market around August as farmers should start harvesting the second crop by July, they said.

"We expect the local market to be strong until around end July," an exporter said.

The Philippines is expected to buy its entire 300,000-metric-ton rice import requirement from Vietnam as offers made by Thai competitors were deemed too high, trade participants said.

Three Vietnamese suppliers, Vin Phat Trading, An Giang Afiex and Dagrimex submitted the lowest price of $328.96/ton, C&F basis, to the National Food Authority Wednesday. Their offers were for a combined total of 129,000 tons.

The second-lowest price was made by Vietnam Southern Food Corp. and Kigifac at $328.99/ton, C&F basis, for 200,000 tons of 25% broken grade.

Vinafoods offered to supply 25,000 tons of iron-fortified rice at $348.99/ton, C&F basis. The rice will be for shipment between June and August this year.