Wednesday, 20 May 2009

Asia rice prices keep falling

Due to thin demand, ample supply
By Apornrath Phoonphongphiphat
Agence France-Presse
http://business.inquirer.net/money/breakingnews/view/20090520-206112/Asia-rice-prices-keep-falling

Filed Under: Food, International (Foreign)Trade, Economy and Business and Finance, Agriculture
BANGKOK--Asian rice prices extended recent falls this week due to a lack of fresh demand plus sales from the Thai government's stocks, traders said.

The benchmark 100 percent B grade white rice fell to $525 per ton on Wednesday from last week's $530, exporters said.

Prices were expected to fall further over coming weeks as supply is rising with the release of rice from the Thai stockpiles and demand remains thin.

"The market is reacting to the government stock sale and I expect prices to fall further as buyers are still on the sidelines as they realize there is plenty of rice on the market," one exporter said.

Last week, the Thai Commerce Minister signed contracts to sell 2 million tons of rice to exporters.

That fell short of the 3.76 million tons it had aimed to sell earlier due to low bids, but the government is estimated to hold another 3 million tons of rice that will come onto the market eventually.

It is buying from farmers under an intervention scheme running until the end of July.

With unattractive prices compared to Vietnam and an absence of buyers, Thai rice exports have dropped significantly, according to Commerce Ministry data.

From January to April, Thailand exported 2.6 million tons, down 33 percent from the 3.9 million it shipped in the same period last year, when a global panic over food security caused demand to soar.

In Vietnam, the world's second-biggest rice exporter, prices also fell due to thin demand, traders said.

The 5 percent broken rice dropped to $395 a ton, free on board, from $400-$410 a ton last week and $430 early this month.

The 25 percent broken rice fell to $330-$340 a ton from $370-$380 a week ago and $400 on May 6.

"There aren't many buyers asking for rice now, while stocks are plentiful, so prices keep falling," a trader in the Mekong Delta said.

Rice loading, which had helped keep prices steady last month, was also subdued this month.

This week eight vessels were loading 105,400 tons of rice at Saigon Port for Cuba and the Philippines, after 13 vessels left last week with nearly 133,000 tons for Africa and the Philippines.

So far this year Vietnam has exported 2.58 million tons, a jump of 56 percent from the 1.65 million tons, in the same period last year, Vietnam Food Association reports showed.

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