Thai rice supplies tight, but N. Korea interested

Thai rice supplies tight, but N. Korea interested

BANGKOK (Reuters): Asian rice prices held firm on Thursday, as Thailand faced tight local supplies after recent heavy rain and as North Korea held talks with Thailand during the worst drought in years.

"Recent rains in Thailand have disrupted the drying process of the rice, resulting in fewer supplies coming onto the market," said a trader. "Supplies are hard to find."

Millers can dry unhusked rice with drying machines, but most of them prefer to dry it in the sun to cut costs and improve the taste.

With high demand from Asia and also from Nigeria, Thai 100 percent parboiled grade was quoted at $193-$195, FOB, up from around $185-$187 last week.

Vietnamese rice prices are likely to ease in coming weeks as millers are expected to release some old stocks to clear warehouses before new supplies from the summer-autumn crop arrive later this month.

"Most millers have held onto their stocks, but in coming weeks they need to release the old stock from warehouses to have enough space for new rice crop," said a trader.

Thai 25 percent broken grade was quoted higher at around $147- $149 from last week's $145.

Vietnamese 25 percent broken grade was quoted steady at $136.

Myanmar 25 percent broken grade was quoted at $122-$123.

The North Korean commercial counseller to Thailand, Rim Jong Duk has been holding talks this week with Thai Commerce Minister Adisai Bodharamik, trade sources told Reuters.

"They held talks at the Thai commerce ministry, but not even senior trade officials were allowed in the meeting," said one source.

The two countries failed in April to clinch a deal for North Korea to buy up to 500,000 tons of rice from Thailand over disagreements on the quality and repayment of an outstanding debt.

According to a report released by North Korean news agency KCNA, the country's weak farm industry is under threat from the longest dry spell in the nation's history.

The drought has continued through the rice-planting season that began in mid-May, and has decimated the nation's fall harvest, the report added.

Myanmar is estimated to have up to 300,000 tons more of rice stocks for exports in the remaining months, traders said.

The military government, which controls the rice trade, was gearing up efforts to capture overseas markets by lowering its prices to a level relatively cheaper than other origins in Asia, traders said.

The Geneva-based trading firm Novel recently signed a contract with the government to buy up to 10,000 tons of Myanmar's 25 percent broken rice grade at around $122 per ton FOB, traders said.

London based-Louis Dreyfus has also bought 43,000 tons of Myanmar 25 percent broken rice grade for African markets for June/July shipment, traders said.

During January-May 2001, Myanmar exported a total of 119,000 tons of rice, compared with only 23,000 tons exported in the same period last year, figures from cargo surveyor Societe Generale de Surveillance Myanmar (SGS) showed.

The country shipped a total of 110,000 tons of rice in 2000, mainly to Bangladesh, compared with a total of 63,700 tons exported in 1999.