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.