Rising supplies eat into Vietnam's rice export prices

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Rising supplies eat into Vietnam's rice export prices.

In Vietnam, export prices of lower-quality 25 percent broken rice eased on rising supplies as the harvest starts in earnest, while buying demand has yet to pick up, traders said.

The variety weakened to $335-$340 a ton, on a FOB basis for fresh summer-autumn grain, from $340-$345 last Wednesday, while 5 percent broken rice stood unchanged at $370-$380 a ton.

China, Vietnam's top rice importer, has been quiet, but Vietnamese jasmine rice has sold well in Ghana, traders said.

Ghana has passed the Philippines to emerge as Vietnam's third-biggest rice buyer after China and Indonesia during the first five months of 2016, importing 203,000 tonnes during that time, up 49.2 percent from a year ago, the Agriculture Ministry said.

Vietnam's rice exports in the first half of the year fell 6.8 percent from a year earlier to 2.78 million tonnes, based on government statistics released on Tuesday.

A smaller winter-spring crop, Vietnam's biggest rice harvest period, has curbed the agricultural sector's growth, slowing Vietnam's economic expansion.

The paddy output fell 6.4 percent from last year to 19.4 million tonnes due to drought and salination, Nguyen Bich Lam, head of the statistics office, said in a report on Tuesday.

Buyers in Thailand, the world's second-biggest rice exporter after India, have held back purchases, creating thin demand, before the government auction that is expected next month, traders in Bangkok said. The date of the auction has yet to be announced.

In the last auction of state stockpiles held on June 15, the Thai government sold 1.11 million tonnes worth 11.54 billion baht ($327 million).

Thailand's five percent broken rice stood unchanged in the past week at $415-$438 a tonne, FOB Bangkok.

Thai rice prices are expected to ease soon as the U.S. dollar has appreciated after the United Kingdom's vote to leave the European Union last week, resulting in a slightly weaker Thai baht.

"This is likely to lower dollar prices, making our rice prices more competitive with Vietnam," a Thai trader said.

Thailand exported 4.7 million tonnes of rice in the first six months of 2016, up 11.42 percent from a year ago, Thailand's commerce minister said on June 23.

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Supplies from India, Thailand and Vietnam, the world's biggest exporters, accounts for a combined 66 percent of global rice trade.