Thai Drought Raises Rice Supply Jitters, Vietnam Rates At Over One-Year High
Drought conditions in Thailand stoked concerns of a supply shortage and lifted rice export prices to a more than six-and-a-half-year high this week, while strong domestic demand amid a coronavirus outbreak pushed Vietnamese rates to more than a one-year peak.
Thailand's benchmark 5% broken rice prices rose to $470-$495 per tonne on Thursday, their highest since August 2013, versus last week's $460-$467 range.
"Many rice mills are refusing to sell due to uncertainty over supply during this dry season," a Bangkok-based rice trader said, echoing the concerns of others.
Many parts of the country's rice growing area have been hit by drought and traders said higher prices were also denting overseas demand.
The Thai government has said this year's dry season could extend beyond the usual period of April through to June.
In Vietnam, rates for 5% broken rice rose to $400-$405 on Thursday, their highest since November 2018, compared with $390-$400 a week earlier.
Strong Domestic Demand
"Domestic demand has been strong over the past week as families are rushing to stockpile rice in anticipation of the further spread of the new coronavirus," a trader based in Ho Chi Minh City said.
"This massive stockpiling has forced exporters to raise their prices due to scarce supplies," the trader added.
Vietnam's rice exports in the first two months of this year rose 31.7% from a year earlier to 928,798 tonnes, according to government customs data released on Wednesday.
In top exporter India, rice export prices extended their losing streak due to a depreciation in rupee despite strong demand from African countries.
India's 5% broken parboiled variety rates edged lower to $363-$367 per tonne this week from last week's $367-$371.
The Indian rupee was trading near a record low on Thursday, raising exporters margins from overseas sales.
Slow Improvement In Demand
"Demand has been slowly improving from African countries. Prices are moderating due to the weak rupee," said B V Krishna Rao, president of the Rice Exporters Association (REA).
India's rice exports in 2019 fell 18.1 % from a year ago to their lowest in eight years, government data shows, as demand from key Asian and African buyers moderated.
Meanwhile, Bangladesh could miss its target of 20 million tonnes for the "Boro" summer variety rice crop this season, as many farmers who were upset about low prices switched to other crops, insiders said.
Boro contributes more than half of Bangladesh's typical annual rice output of around 35 million tonnes.