October 27, 2008

          

Asia Grain Outlook on Monday: Thai export rice prices may fall further

                     

 

Prices of Thai export rice are likely to continue falling as demand remains sluggish.

 

"International buyers are looking for a further fall in prices and not really buying much," said a trader in Bangkok.

 

He added that with good rice harvests in major producers such as India and Vietnam, rice prices across Asia are being pressured downward.

 

Over the past month, Thai rice export prices have fallen by around US$150 a metric tonne across grades, traders said.

 

"I think there's still more downside to this market," the trader said.

 

Thai parboiled rice exporters are eagerly waiting to see if the Nigerian government imposes an import duty on rice, a decision that is expected by Oct. 31, traders said.

 

Nigeria is one of the biggest buyers of Thai parboiled rice. An import duty is likely to affect Nigerian offtake of Thai rice and therefore further pressure a bearish market.

 

Monday, Thai 100% grade B rice was trading at around US$578/tonne, while parboiled rice was quoted at around US$555/tonne.

 

Indian Agriculture Minister Sharad Pawar's announcement last week that the government has no plans to lift a ban on non-basmati rice exports, in place since March, offers some price support to a sagging rice market.

 

India is a major global rice exporter.

 

However, the government is planning to scrap a US$200/tonne export tax on aromatic, long-grain basmati rice, which is a premium rice variety, primarily grown for export.

 

In other news, Vietnam's Ministry of Industry and Trade last week asked the Ministry of Finance to exempt rice from export taxes to boost exports, which will in turn support domestic rice prices, the Thai News Service reported.

 

It said Vietnam has exported around 3.7 million metric tonnes of rice so far this year, while exporters currently have outstanding export orders of around 600,000-700,000 tonnes.

 

The country is targeting exports of 4.7 million tonnes of rice in 2008.