August 27, 2008
Asia Grain Outlook on Wednesday: Rice prices may rise on supply woes, demand
Asian rice prices may continue to rise in the next few days, as low availability of rice in Thailand's domestic market and continued demand for parboiled rice from Nigeria supports prices.
A trader in Bangkok said that parboiled rice prices in Thailand have risen by around US$15/tonne in the week to Wednesday, to around US$715/tonne, free-on-board, Bangkok.
Similarly, prices of white rice too have risen to US$705/tonne, up US$13/tonne on the week, on a free-on-board basis in Bangkok.
Traders said that demand for parboiled rice continues to come in from Nigeria, with inquiries for about 75,000 tonnes-80,000 tonnes in this week alone.
They said that concerns the possible imposition by Nigeria of an import duty on parboiled rice from Oct. 31 is causing buyers in that country to stock up on rice now.
While demand for white rice has eased over the last month, prices are rising as Thailand's farmers are not selling much paddy to private traders, preferring to sell mainly to the government, which is offering an intervention price of THB14,000/tonne (US$500/tonne).
Since the government has so far not sold any rice from the crop currently being harvested in Thailand, not much of the new rice is available to exporters.
Traders said that political turmoil in Thailand is likely to delay a decision by the Ministry of Commerce to sell rice from its stocks to exporters, which the government has indicated its willingness to do.
In other commodities, corn and soybean prices are likely to keep falling over the week, as analysts said that funds may continue to liquidate long positions on the Chicago Board of Trade, mostly because of technical factors and outside market influences.
However, an analyst in Tokyo said that CBOT corn and soybean futures may bounce back in September, as concerns mount over a likely delay in U.S. crop harvesting in the fall.
John C. Baize, president of agriculture consultancy John C. Baize and Associates, speaking on the sidelines of a palm oil conference in Kuala Lumpur Tuesday, said that unfavorable weather in the U.S. may potentially lower the yield and quality of U.S. soybean crop this fall.
Similar concerns are also being expressed for the U.S. corn crop.