Thai rice prices rose this week on speculation over higher intervention prices under an incoming government, which forced some buyers to switch to Vietnamese grain, helping push prices higher there, too.
The benchmark 100 percent B grade Thai white rice was at $545 per ton on Wednesday, exporters said, up 3.8 percent up from last week’s $525.
"Prices jumped higher because of political speculation. It’s not because of real demand as the market is very quiet and no one dares to commit to deals – they want more clarity on the direction after the election," said a Bangkok-based trader.
The intervention price could push Thai export prices as high as $850-$870 per ton, traders said. At that level buyers would probably switch to other origins, notably Vietnam, which already undercuts Thailand, albeit with lower-quality grain.
Demand for Vietnamese rice
Vietnamese rice prices have strengthened in the past week thanks to new demand expected from Indonesia, Bangladesh and African countries, traders said. Indonesia’s Bulog said on Wednesday it had the authorization to import more rice this year and was waiting for an import permit from the trade minister.
Vietnam’s 5 percent broken rice jumped to $485-$490 a ton, free on board, from $475-$480 last week. That was below the same grade of Thai rice that was offered at $500 per ton. The 25-percent broken rice increased to $450-$455 a ton from $435-$440 last Wednesday.
A rise in domestic prices has prompted the Vietnam Food Association to shelve a plan to buy 1 million tons of milled grain to hold in stockpiles for three months to support the market. "Given the situation as of now, the plan has no go-ahead and is likely to be abolished," a trader in Ho Chi Minh City said.
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