Asia Rice-Vietnam prices jump, Thai price widens on weaker baht

 Rice prices in Vietnam stand near their highest in nearly a year, fed by hopes the country could win contracts to supply 500,000 tonnes of the grain to the Philippines, while prices in Thailand have widened as political protests took a toll of its currency, traders said on Wednesday.

A Rice plantation

   If Vietnam wins Manila's rice tender, prices in Thailand could soften as its harvest gathers pace. But Vietnam's higher prices may prevail only briefly, since the entire Philippine volume will not have to be delivered this year, traders said.
   Vietnam's 5-percent broken rice rose on Wednesday to $415 to $425 a tonne, free-on-board Saigon Port, nearing a one-year high after its bid was below rival offers from Thailand and Cambodia in the Philippine tender.
   The variety was last offered at $440/tonne on Dec. 5, 2012.
   The 25 percent broken rice also increased to $385 to $390 a tonne, FOB basis, from $375 to $380 last Wednesday. This week's price is the highest since Jan. 2, 2013 when the variety stood at $390 to $395 a tonne, based on Reuters data.
   "Prices have been rising after the tender, while warehouses have sold much of their stocks to China, leaving litte grain available," a trader at a European firm in Ho Chi Minh City said.
   The first shipment to the Philippines must be at least 120,000 tonnes and arrive by Dec. 31, though the rest could be delivered early in 2014, Manila's grain procurement agency, the National Food Authority, has said.
   "We will have to wait until early December, when the market realises the actual need for loading, and then prices can stabilise," the trader in Ho Chi Minh City said.
   Rising prices have prompted other buyers to hold back on purchases, traders in Vietnam said.
   Vietnam's exports of rice in the period from January to November have dropped 16 percent from a year ago, to 6.3 million tonnes, the government said on Tuesday.
   But the export volume excluded a figure of 1.2 million tonnes sold across the land border to China, according to Vietnamese industry officials' estimates.
   Last year Vietnam shipped a record volume of 8.02 million tonnes of rice, retaining its rank as the world's No. 2 exporter, while India took the top spot, dislodging Thailand to third place.
   Thailand's common grade 5 percent broken rice widened to $410 to $420 per tonne this week, due mainly to a weaker exchange rate, against $420 a week ago, before grain harvested in the country's main 2013/14 crop floods the market this month.
   Thailand's central bank unexpectedly cut its benchmark interest rate on Wednesday, saying political tension was affecting investor confidence and there was no sign of exports recovering. The baht fell after the move to 32.10 per dollar, its weakest since Sept. 11.
   "The protests have caused the exchange rate to become weaker, so it looks as if the prices will continue to be cheaper at this point," a Thai trader said.
   He said sales of parboiled rice to Africa also provided support to Thai rice prices.
   Last week traders said 10,000 tonnes of Thai parboiled rice were sold to Benin and Nigeria. They said the demand would not boost prices in the long run, due to rising supply.