Buyers sit out as rice harvests loom

Buyers sit out as rice harvests loom

BANGKOK (Reuter): The world's two biggest rice exporters are currently finding few buyers as prices drift languidly with the onset of the rice harvest in India and the approach of the new crop in Thailand, traders said yesterday.

Thai traders said they have received inquiries from the Philippines and Indonesia although no orders had been placed so far. Traditional importers like China and Iran have also slowed down their purchases, trade sources in Bangkok said.

"It seems they (the buyers) are waiting for new crop to enter the market to pull prices down before making any decision," a Thai trader said.

The new Thai rice crop is expected to enter the market in November.

Thai benchmark 100 percent B grade rice was quoted at around US$325-$340 a ton FOB Bangkok, down slightly from $335-$340 last week. Demand for top grades like fragrant rice is still strong, trade sources said.

"Exporters are only buying rice from millers to cover outstanding orders," a trader said.

Traffic at Bangkok's port was being hampered by rain. Only six vessels were loading a total of 28,500 tons of rice for shipment to China, Malaysia, Japan, Singapore and an unknown destination in Africa.

In India, the winter rice harvest started during the week in the northern states of Punjab and Haryana.

"According to trade sources, the winter output is expected to be around 75 million tons," said Mulraj Tanna, a Bombay foodgrains exporter. Output last year was 71 million tons.

The winter harvest starts in early October and runs to late November. India harvests two rice crops. Some 85 percent of its output comes from the winter crop.

Punjab and Haryana contribute nearly 25 percent of the country's total rice production. In other rice producing states, harvesting is expected to start in a week.

Export prices from the new crop were almost the same as last week, traders said.

Indian five percent broken long grain non-Basmati rice for October shipments was quoted at around $285-$290 a ton FOB, 10 percent at $275, 15 percent at $250 and 25 percent at $235 a ton, they said.

Traders said Indian export contracts would go up once harvesting in the other rice producing states starts and the level of total rice production is known.

"There are good export inquiries mainly from CIS countries. We expect to export substantial quantities of rice to them this season once the crop output is finalized," said Prem Garg, a foodgrains exporter in New Delhi.

Prices of Vietnamese rice remained firm in active trade despite transport delays caused by the annual flooding of the Mekong river delta, dealers said.

Traders quoted five percent broken grade at around $276-$280 a ton FOB Saigon Port, little changed from last week's $280-$283. Prices for ten percent broken were around $10 below this level.

"The flooding is causing transport delays. There are also problems with storage, but the situation doesn't look any worse than last year" said one Ho Chi Minh City dealer.

Traders said current buyers for higher rice grades included China, Peru and Malaysia as well as traditional destinations in the Middle East and Africa.

But they said prices for lower-grade 25 percent broken currently being shipped to Sri Lanka had fallen to around $208- $210 a ton C&F.