Asian rice prices hold firm despite aloof buyers
Asian rice prices hold firm despite aloof buyers
SINGAPORE (Reuter): Asian rice prices continued on a firm trend in early March, traders said yesterday, despite the efforts of some buyers to cool the heated market by holding back purchases from Thailand -- the world's largest exporter.
Delayed arrival of Thailand's second paddy (unhusked rice) harvest has largely prevented high export prices from easing, Thai traders said.
Bangkok trade sources said initial supply from a projected 3.45 million ton second crop (November/June) only started trickling into the market this week, almost one month later than in most previous years.
The expected second crop, however, will be higher than 2.9 million tons harvested last year.
"The bulk of this year's second crop should reach the local market from the second half of March and continue throughout April," a source at Chaiyaporn Rice Co said.
Traders said current high Thai export prices have sidelined foreign buyers who mostly have held back placing fresh orders in anticipation of easier prices next month.
But this has only succeeded in pushing current prices down slightly, with the Thai 100 percent white B benchmark easing to about US$375-380 per ton FOB Bangkok from $385 in late February.
"Thai exporters are reluctant to cut prices due to current low domestic stocks after heavy flooding last year," a trader at another major exporter said.
In India, exports of rice have been sluggish in recent weeks with adequate supplies in the international market, traders and analysts said.
Frequent changes in the price of rice sold to exporters by the Food Corporation of India (FCI) and congestion at ports also hindered rice exports, traders said.
The export market was slow, with arrivals from Thailand, Vietnam and Burma picking up, analysts said. "We may not see much of rice contracts in March or April because buyers are well- covered. The market is now selective," one said.
Mulraj Tanna, a Bombay trader, said dollar/rupee fluctuations made it increasingly difficult for traders to estimate the cost of exports.
He said India might not be able to export more than 2.0 million tons of non-Basmati rice in 1996/97 (April/March), compared with nearly 3.5 million in 1995/96.
"Nobody is in a mood to do business. The dollar is a major source for business in India," said Pradeep Garg, a leading Delhi rice trader.
In Vietnam, rice export prices remain firm, but the domestic market has eased with demand tailing off after the lunar new year Tet festival and as traders anticipate a boost to supply from winter crop harvests.
Traders said the FOB Saigon Port price for five percent broken grade was about $333 per ton compared with $325 in early February.
One trader said the market was underpinned by talk that the Southern Food Corporation was asking $345 per ton for the 300,000 tons of five percent broken grade expected to be shipped to Iran in the second quarter.
"The market is still in a state of flux. Everyone is waiting for something to happen," he said, adding that Iran was looking to pay current prices.
Eager to fill a supply gap following a U.S. trade ban on Tehran since May, Iran agreed last October to buy 300,000 tons of rice from Vietnam, with shipment starting in February.
Iran has bought small parcels of rice from Vietnam in the past and last year contracted to take 150,000 tons, but Washington's embargo cut it off from U.S. supplies and prompted it to look for larger quantities elsewhere.