Asian rice prices increase ahead of Indian harvest
Asian rice prices increase ahead of Indian harvest
BANGKOK (Reuter): Asian rice prices were mainly firmer this
week with supply limited ahead of the Indian harvest in October
and despite buyers holding back as they expect the market to ease
in coming weeks, traders said yesterday.
"The market has basically bottomed out," one Vietnamese trader
said. "Traders have started to buy, partly because the Indian
crop is not really in the market yet."
In Thailand, rice prices have firmed slightly in the past two
weeks as only a small quantity of fresh supplies have entered a
quiet market, local trade sources said.
The Thai benchmark 100 percent white B rice for
September/October shipment was quoted at between US$345-$355 a
ton FOB Bangkok compared with $335 two weeks ago.
Buyers have slowed purchases as they await expected easier
prices in coming weeks, the sources said.
Traders attributed the recent drop in supply partly to recent
heavy monsoon rain.
"A big amount of paddy was dampened by rain. So, millers had
to slow down activity because rice breaks when you mill it while
it is damp," one trader said.
At Bangkok port, ships were loading about 40,000 tons of rice
for various destinations, industry sources said.
These included 4,000 tons of fragrant rice to China and 6,130
tons of 100 percent rice to Malaysia. A further 5,100 tons were
also headed for Japan and 8,000 tons to Nigeria, and the rest to
unidentified destinations.
A Thai agriculture ministry official said there were no plans
to sharply revise the national forecast for rice production
despite the ongoing rains, adding that revised crop output
forecasts would be detailed later this month.
According to official projections in July, rice output for the
first crop of 1996/97 (April-March) was put at 18.11 million
tons.
In Vietnam, the rice market has held steady in the last week
underpinned by fears that recent flooding in the north may have
damaged the paddy crop, traders said.
They said five percent broken grade has been trading at around
$275-280 a ton FOB Saigon port for the past month.
Higher brokens have recovered from a recent bout of weakness
on talk that non-export grade rice could be headed for the flood-
hit north of the country.
"People are talking about flooding in the northern areas,"
said one trader. "It's more psychological really. I don't think
there's much damage."
He shrugged off speculation that China was in the market for
Vietnamese rice because of flood damage to its crop.
Vietnam's Ministry of Agriculture has asked for the export
quota this year to be increased to 2.3-2.5 million tons from two
million in 1995.
Shipments
Traders said recent trade buying suggested that shipments
would pick up in the weeks ahead. One said 10 vessels, bound for
Africa and the Middle East, were now loading in Saigon port.
Indian officials and analysts said they anticipate a good
domestic rice crop this year, helped by plentiful monsoon rains,
but exports are likely to dip from record levels due to a fall in
world demand and uncompetitive prices.
"Rice exports are not going to pick up due to a fall in
international demand," Anil Adlakha, executive director of the
All India Rice Exporters Association (AIREA), told Reuters.
Harvesting of the new rice crop will start in October.
Analysts said India was expected to harvest around 70 million
tons of rice in October, the same as last year.
India produced around 81 million tons of rice in the 1995/96
(July-June) crop year, with most of it covering domestic needs.
The government has set a target of nearly 80 million tons for
1996/97.
"Indian exports this year will be a maximum of three million
tons as Indian prices are much higher than Vietnam's prices,"
said Prem Garg, a leading foodgrains exporter.
India exported a record five million tons of rice in the year
that ended in March. It was the largest exporter of rice in the
year.