Asia Grain Outlook on Wednesday: Rice prices likely stable through Febuary or March

 

 

Rice prices in Asia are expected to remain stable for the next few weeks, despite the Thai government's plan to release some of its reserves, but prices could start to rise after February or March, traders said Wednesday.

 

"Prices should remain at a standstill before February-March. The release of the stocks shouldn't have much impact on the market," a rice trader in Thailand said.

 

The planned sales will serve to bring down the level of the country's stocks, creating room for the coming crop, he said.

 

There is still a chance that prices could rise after February or March, given lower production by some of the major consumers in the region, he said.

 

Vietnam may have sold its stocks by then, while demand from India, one of the major consumers, will emerge due to low domestic production.

 

Thailand will sell 300,000 metric tons of 5% broken rice and 75,000 tons of main-crop glutinous rice in an auction Thursday, Vichak Visetnoi, director-general of the Ministry of Commerce's Foreign Trade Department, said Monday.

 

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, told Dow Jones Newsires Monday that the government could hold more auctions, as its reserves of nearly 6 million tons are too large, resulting in excessive maintenance costs.

 

"I believe if the government thinks the (auction) prices are ok, they will probably hold another auction in one or two weeks," another rice exporter in Thailand said Wednesday.

 

Some exporters might have asked the government to do so, as they can't get enough from the current crop, and mixing the current crop with the old one will also help bring down the prices, he said.

 

Rice prices in Thailand, the world's biggest rice exporter, are quoted around US$600/ton, up 15% from three months ago, before the Philippines government announced a heavy buy tender schedule.

 

The country is projected to import up to a record of 3 million tons of rice this year, after typhoons hit its crop.

 

The Philippines' Agriculture Secretary Arthur Yap said Tuesday that Thailand had proposed to supply up to 1.37 million tons of rice a year, and the two countries had been in talks on this.

 

Benchmark March rice futures traded on the Chicago Board of Trade settled at US$13.92 per hundredweight Tuesday, little changed compared with a year earlier.