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Vietnam rice rates hit multi-month peak on robust demand from Africa, Cuba

Friday, October 25, 2019, 11:16 GMT+7
Vietnam rice rates hit multi-month peak on robust demand from Africa, Cuba
Grains are seen on assembly line of a rice processing factory in Vietnam's southern Mekong delta city of Can Tho, August 23, 2015. Photo: Reuters

Vietnamese rice export prices rose to a four-and-a-half-month high this week on healthy demand from Africa and Cuba as supply remained scant, while a stronger rupee helped rates for Indian variety recover from a four-month low.

Rates for Vietnam’s benchmark five percent broken rice rose to US$350-$355 a metric ton — a four-and-a-half month high — from $350 a metric ton a week earlier due to limited stockpiles.

“Supplies are running low while demand remains steady, especially from Africa and also Cuba,” a trader based in Ho Chi Minh City said.

The Vietnamese market could get a further fillip as the Philippines, which accounts for 36 percent of total shipments from Vietnam, might be considering easing its restrictions on rice imports soon, another trader said.

In September, prices for the Vietnamese variety had touched their lowest in nearly 12 years at $325 per metric ton.

In top exporter India, prices for the five percent broken parboiled variety rose to $368-$372 per metric ton from $365-$370 a week ago.

The Indian rupee on Thursday hit its highest in more than a week, reducing exporters’ margins.

President of the Rice Exporters Association B. V. Krishna Rao, however, said, “demand from African countries is still weak”.

India’s rice exports in August fell 29 percent year-on-year to 644,249 metric tons due to weak demand from African countries for non-basmati rice, among other factors.

Neighbouring Bangladesh, meanwhile, has failed to secure any overseas deals since a long-standing export ban was lifted in May, due to cheaper rice from competitors.

“We are still looking for a market to export rice. India can export rice at $370-390 per metric ton while we are asking for at least $500,” said Shah Alam Babu, president of Rice Exporters Association.

Prices in second biggest exporter Thailand’s benchmark 5-percent broken rice rose to $396-$410 a metric ton on Thursday from $395-$400 last week.

Traders attributed the slight rise in prices to the changes in the currency exchange rate.

“There has been very little change in demand and supply and the strengthening of the baht has moved the price up slightly,” a Bangkok-based trader said.

A stronger baht has marred demand for the Thai variety for many months now.

“If the baht weakens a little, we may be able to sell some rice, but at the moment, Thai rice is just too expensive compared with competitors,” another rice trader said.

Reuters

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