Thursday, October 13, 2011

Vietnamese rice export prices rise to three-year high

Vietnamese rice export prices rose up to 2 percent on Monday to their highest level in more than three years after the government of neighbouring exporter Thailand began a purchasing scheme last week that gives farmers a hefty premium. The 5 percent broken rice strengthened to $580-$590 a tonne free on board (FOB), up around 1.3 percent from $575-$580 last Wednesday. The $590 level is the highest since the $600/tonne price on September 10, 2008.
The 25 percent broken grain rose 1.9 percent to $530 a tonne, FOB, from $520 last week. The government of Thailand, the world's biggest rice exporter, is paying farmers 15,000 baht ($483) a tonne for unmilled rice from October 7 to the end of February, which covers the harvest of the main crop. That compares to a market price of 10,000 baht last week and just 7,000 to 8,000 baht in June."Foreign demand is nearly frozen, while in the domestic market speculators raised prices," a trader in Ho Chi Minh City said. Vietnamese traders are stocking up on rice in anticipation of gaining customers put off by Thailand's higher rice prices. In the Mekong Delta, where seasonal floods are at their highest level since 2000, paddy prices rose slightly to 6.2-7.5 million dong ($298-$360) per tonne on Monday from 6.2-7.3 million dong last week, after a major crop harvest has come to an end.Floods could stay high until the end of this month, state forecasters said. Damages so far on a third minor crop in the Delta are limited, but high flooding prevents the operation of rice mills and raise production costs, traders said. Indonesia has overtaken the Philippines to become Vietnam's top rice buyer this year, having bought 17 percent of the country's export volume in the January-August period, followed by the Philippines with 16 percent, the Agriculture Ministry said.The Philippines could buy a small volume of rice from Vietnam late this year, while Indonesia's earliest order would be from February 2012, the Planning and Investment Ministry-run Dau Tu newspaper quoted a Vinafood executive on Monday as saying. The Vietnam Food Association has advised exporters to sign contracts only when they have stocks to avoid losses or defaults on deliveries due to failure in buying grain in the domestic market for loading, Dau Tu reported.

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