Thai rice prices up on RI, China demand

Thai rice prices up on RI, China demand

BANGKOK (Reuters): Thai rice prices shrugged off the weaker baht to move higher this week, boosted by deliveries to China and Indonesia, traders said yesterday.

There were some new orders from the Asian region and Africa, and the market was still eyeing a possible deal with Manila for Thailand to sell 100,000 tons of rice to the Philippines, traders said.

Talks between Thai commerce officials and their Philippine counterparts have yet to conclude.

"The main activity in the market this week was loading. A number of vessels are taking rice for delivery to Indonesia, Malaysia, China and Nigeria," said a dealer with a major trading house.

Sales volumes were high compared with the same period last year, dispelling initial concerns that Thai rice exports might not meet this year's target of 5.0 million tons, officials and traders said.

"There are lot of major deals coming in recently. Perhaps the weaker baht helped cushion price rises and provided buying incentives. And problems in Vietnam and Pakistan also shifted buyers' attention to Thailand," said one exporter.

"There is almost no price difference between Thai and Vietnam rice now and that makes Thai rice attractive," he told Reuters.

Thai benchmark 100 percent B grade was quoted at $280-285 per ton FOB Bangkok while the 100 percent fragrant was quoted at around $700 per ton on the same basis. Last week the price of 100 percent B grade was quoted around $275-280 per ton while the fragrant rice was quoted around $650-675.

Thailand exported 363,641 tons of rice between Dec. 1-Dec. 17 against 250,623 tons during the corresponding period last year.

Exports since the beginning of the year were recorded at 4.9 million tons compared with 5.02 million tons last year, according to Commerce Ministry figures.

"It is catching up fast. During the first half of 1997 the exports figure was discouraging, partly because the baht was overvalued...but not anymore," said a shipping source.

The market took in its stride news that the second rice crop would be restricted along the Chao Phya River due to insufficient water caused by the El Nio weather phenomenon.

The Agriculture Ministry forecast the second rice crop output -- to be harvested around March-April 1998 -- at only 2.8 million tons, compared with over four million tons during the previous season.