Vietnam's rice export prices stable despite concerns over quality

By Reuters   April 14, 2017 | 09:46 am GMT+7
Vietnam's rice export prices stable despite concerns over quality
Farmers harvest rice at a paddy field in Ninh Binh province, south of Hanoi. Photo by Reuters

Overseas demand for Vietnamese rice remains thin even after the country exported less in the first quarter.

Rice export prices extended its upward trend in India on a stronger rupee, while Vietnam rates were stable amid a subtle market on low demand, traders said on Thursday.

In Vietnam, the world's third-largest rice exporter, market was quiet also because of unattractive prices amid worries over rainfall affecting grain quality.

"Abnormal rain in some harvesting areas has affected rice quality, but not too seriously," said a Ho Chi Minh-based trader. Prices of the 5 percent broken rice stayed nearly unchanged at $350-$355 a ton, free-on-board (FOB) Saigon, which were less competitive than Thai prices, traders said.

Vietnam's rice exports are expected to plunge 23.9 percent annually to 1.19 million tons in the first quarter, after the grain shipments dropped 26.5 percent in 2016 due to lower output caused by climate changes, the government said.

In India, the 5 percent broken parboiled rice prices rose by $7 per ton to between $382 and $387 a ton this week, as gains in the rupee forced exporters to raise prices despite sluggish demand.

"Export demand is very weak, but we have to raise prices to offset the impact of a strong rupee," said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The rupee has risen 5.6 percent so far this year, and is trading near its highest level in 20 months. A strong rupee trims returns of exporters.

"In local market, paddy supplies are falling from summer-sown crop. In the next few weeks, winter crop will start arriving and local prices may soften," said a Mumbai-based dealer with a global trading firm.

India, the world's biggest rice exporter, mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East. Its rice output could rise by 4.3 percent to a record high of 108.86 million tons in 2016/17.

Thai benchmark 5-percent broken rice was quoted at $350-$365 a ton free-on-board (FOB) Bangkok on Wednesday.

Thai's rice market is closed for a national holiday on Thursday.