Thai rice export prices hovered around 13-month lows over the past week, attracting more African buyers and leading to dull trade in Vietnam, traders said on Wednesday. Thai benchmark 5 percent broken rice prices narrowed to $345-$348 a tonne on Wednesday, free-on-board (FOB) basis, from $345-$350 a tonne a week ago when they hit their lowest in 13 months. The rainy season may also have an impact on rice prices, said another trader. “The recent rain will prompt farmers to harvest more rice as they fear that their rice will get spoiled and this might have an effect on rice prices,” he said. Another Bangkok-based trader said rice prices would be somewhat stable with sellers reluctant to sell given the government intervention in place.
Thailand and Vietnam are the world’s second- and third-biggest rice exporters after India. The fall in Thai rice prices has raised concerns among Vietnamese exporters of the grain, as their quotations for the 5 percent broken rice stood at $350 a tonne, FOB basis, against $350-$355 last Wednesday. “Thai rice prices are falling and that could attract African buyers while Vietnam could not do anything because their rice stock has been built at an already high cost,” said a trader at a foreign firm in Ho Chi Minh City. Traders said last week African buyers had already switched to rice offered by Thailand and Pakistan. But Vietnamese exporters may have to sell their stocks soon to free up their warehouse space in preparation for the next crop, traders said. “Vietnam may have to lower prices as it awaits the new crop,” lamented a second trader in Ho Chi Minh City.
Vietnamese farmers will start harvesting the winter-spring crop, the biggest among their three crops a year, from next February in the Mekong Delta food basket. On the grain market outlook, bumper U.S. harvests, high stocks, and broadly favourable South American 2016/17 harvest prospects will prevent prices from staging a more significant rally. It is feared that the loss by (Democrat Hillary) Clinton in the U.S. election is a considerable downside risk for agricultural commodity prices. Republican Donald Trump stunned the world by defeating heavily favored Clinton in Tuesday’s presidential election, ending eight years of Democratic rule and sending the United States on a new, uncertain path.