Ample supply, competition push rice prices lower

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BANGKOK: Asian rice prices fell this week as supplies far exceeded demand, with top producers India, Pakistan and Vietnam competing with each other to attract business, traders said on Wednesday.

The 5 percent broken grade Vietnamese white rice was offered at $410 to $415 per ton, down from last week’s $420.


Common Indian and Pakistani grades were offered at $425 and $410 a ton respectively, slightly lower than the $420 to $430 range of the previous week, the traders added.


“Export demand is sluggish, as rice supplies from Pakistan are available at least $10 per ton cheaper than Indian supplies,” said a Delhi-based trader.


Thai rice prices remained at a lofty $560 per ton due to the government intervention scheme, further reducing exporters’ chances of securing deals, especially as supplies from other countries were plentiful, traders said.

Vietnamese farmers are due to start harvesting next month the winter-spring rice crop in the Mekong Delta, the biggest of three crops grown in the area.


India, which maintains an unrestricted export policy, is expected to produce 99.5 million tons of rice in 2012/13, slightly lower than 104.3 million in the previous crop. It also has plentiful stocks of 34.4 million tons at government warehouses, against a target of 8.2 million.


India has taken the rank of the world’s biggest rice exporter from Thailand for the first time since 1983, traders said. India’s rice exports are expected to be around 8.5 million tons in the year to March 2013, an official of the All India Rice Exporters’ Association.


The Thai government’s policy of paying farmers higher-than-market prices of 15,000 baht ($490) per ton of paddy has pushed prices to uncompetitively high levels and sharply reduced exports, leading to a huge inventories.


Traders forecast Thailand to have exported, at best, 6.8 million tons in 2012, below Vietnam’s estimated 7.72 million.


No official export statistics are available from the Thai commerce ministry are available, as the data was removed from the ministry’s website in October 2012 and officials refused to provide information.


Traders say the government was concealing the figures to stem questions about contracts it said it had signed to sell 7.3 million tons of rice.

Courtesy:  The News

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