Asian rice market: Vietnam pushes the peak of export price

While the increase in demand pushes the Vietnam rice rate, the strengthening domestic currency of Thailand deprives its rice consumption.

Vietnam’s 5% broken rice prices rose to $470 per tonne on Thursday, their highest since mid-June, from $440-$450 last week, said Reuters.

“Supplies are running low as the summer-autumn harvest has come to an end,” a trader based in Ho Chi Minh City said, adding that local traders have also been hoarding the grain in anticipation of higher prices, reported Reuters.

“Traders have been focusing mainly on fulfilling their export contracts signed earlier with Cuba, Malaysia and the Philippines.”

Vietnam will start sowing the autumn-winter crop, and the next harvest won’t begin until October, other traders said.

According to some experts, Vietnam may surpass Thailand in rice exports.

This June, Vietnam has won the deal of exporting 60,000 tons of rice supply to the Philippines on the order from the government. This is a part of 300,000 tons of rice to serve national food security under the impact of COVID-19.

Apart from allocating a quota of 20,000 tonnes of rice to all members of the World Trade Organisation (WTO) this year, the Republic of Korea had given a quota of 55,112 tonnes of rice for Vietnam, reported VNA.

Statistics of the Thai Rice Exporters Association show that Thailand exported 2.57 million tonnes of rice worth 54.2 billion THB (1.71 billion USD) in the first five months of this year, down 31.9 percent on volume and 13.2 percent in value year-on-year.

Meanwhile, Vietnam shipped nearly 2.9 million tonnes of rice for 1.41 billion USD in the reviewed period, up 5.1 percent in volume and 18.9 percent in value, according to the Vietnam Chamber of Commerce and Industry (VCCI).

In Thailand, benchmark 5% broken rice prices were quoted at $463-$485, little changed from $465-$483 last week, according to Reuters.

“The strong baht (against the U.S. dollar) has really kept the price of Thai rice higher than our competitors and deterred buyers,” a Bangkok-based trader said.

Experts forecast that Thailand is likely to fall from the third to the fifth place in the list of global rice exporters in the next decade unless the country adopts long-term policies to increase the competitiveness of the staple, according to VNA.

Other Asian countries are suffering from the risk of food security due to coronavirus and catastrophe.

India’s rice exporters are struggling to fulfill orders due to the limited availability of containers and workers at mills and the country’s biggest rice handling port due to surging coronavirus cases, according to Reuters.

“Loading is still limited at Kakinada port due to labor shortage,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

In Bangladesh, the longest-running floods in over two decades have submerged nearly 80,000 hectares of paddy fields, according to officials from the agriculture ministry shared on Reuters.