Asian rice trading dull despite price falls

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A Vietnamese farmer plants rice in a flooded field. (Photo: Reuters)

HANOI, Nov 19 (Reuters) – Rice trading in Asian markets slowed this week, even though export prices in Vietnam have dropped to a 4-1/2-month low, at par with Thai rice because buying demand was thin, traders said on Wednesday.

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Thailand and Vietnam together provide 40 percent of the world’s rice trade, estimated to hit a record high of 39.7 million tonnes this year according to the UN Food and Agriculture Organization.

“There is no sudden change on the demand side,” a Vietnamese trader in Ho Chi Minh City said. Africa and China have not been active buying recently, he said.

The Thai government has offered 2 million tonnes of rice and 200,000 tonnes of rubber to China, the Thai commerce minister said last Friday.

The offer had no impact on Thailand’s rice market due to huge government stocks while buyers were absent, traders said.

Vietnam’s 5 percent broken rice eased to $410-$415 a tonne, free on board Saigon Port, at par with Thai rice of the same grade, from $425-$430 a tonne last Wednesday.

The price of $410/tonne is the lowest since June 25, based on Reuters data.

Vietnam’s 25-percent broken rice weakened to $360-$365 a tonne, FOB basis, from $390 a week ago.

“If Thai prices remain as they are, it means Vietnam can’t price their produce much higher,” a Thai rice trader said.

“The rice-pledging scheme has disrupted the entire rice market, even in foreign countries.”

Thailand has a massive stockpile of 18 million tonnes of rice built under the previous government, and about 70 percent of which is deteriorating and another fifth inedible, leaving only one tenth of standard export quality.

Vietnam has exported 5.6 million tonnes of the grain after the first 10 months of this year, or 4.3 percent lower than a year earlier, based Vietnam Customs data.

China is Vietnam’s largest rice buyer in the January-October period, with the import volume falling 5.5 percent from a year earlier to 1.92 million tonnes, the Finance Ministry-run customs department said.

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