photo by Chuck Kuhn
HANOI/BANGKOK — World benchmark Thai rice prices fell back from near a record high on Wednesday while Vietnam reported a six per cent increase in its main rice crop, further easing fears over supplies of Asia's staple food.
News of a bumper winter-spring harvest and of a big jump in plantings for the summer-autumn crop in Vietnam, typically the world's second-largest exporter behind Thailand, also added to expectations that Hanoi will end a months-long export ban on schedule from July, soothing anxious importers.
On Monday, Cambodia became the first exporter to lift trading curbs, with Prime Minister Hun Sen saying he was confident that after two months of restrictions the country had enough rice for its own needs.
The perception of a looming increase in supplies helped drive Thailand's benchmark 100 per cent B grade white rice down more than 10 per cent to $900-$930 (U.S.) per tonne on Wednesday, off the near record high $1,030-$1,050 a tonne last week, traders said.
Exports bans earlier this year by Cambodia as well as bigger sellers like Vietnam and India had triggered a wave of panic buying by importers who depend on the narrow spot rice market for their supplies, driving prices up nearly threefold since January.
But those buyers now appear more confident.
“Demand is slow as most buyers are waiting to buy at cheaper prices when Vietnam resumes its exports,” one Thai merchant said.
A 141,000 tonne tender from the Philippines, the world's biggest importer, attracted private sector bids of only 500 tonnes on Tuesday, suggesting the record highs of the last two months are over.
However, no major slide is expected was key buyers such as Iran, Iraq, Malaysia and Nigeria are expected to move in and replenish stocks at cheaper levels, traders said.
In its monthly report on Vietnam's southern region for May, the General Statistics Office (GSO) said farmers had so far harvested 11.5 million tonnes of export-quality winter-spring paddy, up 5.8 per cent from last year.
The Agriculture Ministry estimated last month that output from the winter-spring crop would rise just 3.9 per cent.
Hanoi banned the signing of new deals from March to June to ensure sufficient domestic supplies and control double-digit inflation, but Agriculture Minister Cao Duc Phat said last week Vietnam may lift the ban in early July.
Vietnam could set a floor price of at least $800 a tonne when it resumes signing new export contracts, a state-run newspaper reported on Tuesday.
After finishing the winter-spring crop, farmers in the Mekong Delta planted 1.12 million hectares for a summer-autumn crop – 17.7 per cent more than last year – the GSO said, in a bid to cash in on the soaring prices.
Many growers of vegetables, sugarcane and other crops have also switched to rice, officials say.
The Mekong Delta grows three rice crops a year. The highest yielding winter-spring crop is mainly used for exports.
On Wednesday the winter-spring paddy was 6,000-6,200 dong (37.3-38.6 U.S. cents) per kilogram in An Giang, one of the delta's largest rice growing provinces, unchanged from last week, but double its level of a year ago.
In Vietnam, the rise in rice prices has ignited inflation, which accelerated to 25.2 per cent in May from 21.4 per cent in April, its seventh consecutive double-digit reading and one of the highest in Asia.
News of a bumper winter-spring harvest and of a big jump in plantings for the summer-autumn crop in Vietnam, typically the world's second-largest exporter behind Thailand, also added to expectations that Hanoi will end a months-long export ban on schedule from July, soothing anxious importers.
On Monday, Cambodia became the first exporter to lift trading curbs, with Prime Minister Hun Sen saying he was confident that after two months of restrictions the country had enough rice for its own needs.
The perception of a looming increase in supplies helped drive Thailand's benchmark 100 per cent B grade white rice down more than 10 per cent to $900-$930 (U.S.) per tonne on Wednesday, off the near record high $1,030-$1,050 a tonne last week, traders said.
Exports bans earlier this year by Cambodia as well as bigger sellers like Vietnam and India had triggered a wave of panic buying by importers who depend on the narrow spot rice market for their supplies, driving prices up nearly threefold since January.
But those buyers now appear more confident.
“Demand is slow as most buyers are waiting to buy at cheaper prices when Vietnam resumes its exports,” one Thai merchant said.
A 141,000 tonne tender from the Philippines, the world's biggest importer, attracted private sector bids of only 500 tonnes on Tuesday, suggesting the record highs of the last two months are over.
However, no major slide is expected was key buyers such as Iran, Iraq, Malaysia and Nigeria are expected to move in and replenish stocks at cheaper levels, traders said.
In its monthly report on Vietnam's southern region for May, the General Statistics Office (GSO) said farmers had so far harvested 11.5 million tonnes of export-quality winter-spring paddy, up 5.8 per cent from last year.
The Agriculture Ministry estimated last month that output from the winter-spring crop would rise just 3.9 per cent.
Hanoi banned the signing of new deals from March to June to ensure sufficient domestic supplies and control double-digit inflation, but Agriculture Minister Cao Duc Phat said last week Vietnam may lift the ban in early July.
Vietnam could set a floor price of at least $800 a tonne when it resumes signing new export contracts, a state-run newspaper reported on Tuesday.
After finishing the winter-spring crop, farmers in the Mekong Delta planted 1.12 million hectares for a summer-autumn crop – 17.7 per cent more than last year – the GSO said, in a bid to cash in on the soaring prices.
Many growers of vegetables, sugarcane and other crops have also switched to rice, officials say.
The Mekong Delta grows three rice crops a year. The highest yielding winter-spring crop is mainly used for exports.
On Wednesday the winter-spring paddy was 6,000-6,200 dong (37.3-38.6 U.S. cents) per kilogram in An Giang, one of the delta's largest rice growing provinces, unchanged from last week, but double its level of a year ago.
In Vietnam, the rise in rice prices has ignited inflation, which accelerated to 25.2 per cent in May from 21.4 per cent in April, its seventh consecutive double-digit reading and one of the highest in Asia.
