Thai, Vietnam rice prices gain steam as supply disruptions loom
Business Line. New Delhi, 25 March 2016
Rice export prices rose in Thailand and Vietnam this week as bad weather threatened to disrupt supply, with Thai rice propped up by a stronger baht and potential rise in demand from West Asia and Africa, traders said. Thai 5-per cent broken rice rose to $371-383 a tonne, free-on-board (FOB) basis, from $365-371 last Wednesday, while the same grain in Vietnam edged up to $380-385 a tonne, from $375-385 last week, traders said. A severe drought is affecting production in the Mekong Delta food basket, while coastal Vietnam also suffers from one of its worst salinations, prompting stockpiling by both domestic traders and farmers in the world’s third biggest rice exporter.
Thailand is also facing its worst water shortage in two decades, but traders neglected the annual weather disaster in the world’s second biggest exporter of the grain and attributed the price hike to a stronger baht. “Customers don’t find Thailand’s drought alarming anymore, because we face drought every year,” a senior trader in Bangkok said. Despite a threat in supply, both countries saw little or no deals signed from overseas importers due to the price hike, meaning the quotations for the rice grades were indicative rates. “Most of the purchases are domestic, with the state reserves department accumulating to ensure food security and Vinafood 1 buying to deliver existing offers,” said a Ho Chi Minh City-based trader.
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