Asia rice trading lull after holidays

Reuters

Posted at Jan 02 2013 07:03 PM | Updated as of Jan 03 2013 03:03 AM

HANOI, Vietnam - Asian rice trading is yet to pick up this week with market participants just trickling back after year-end holidays, while buying demand could emerge next month when a major crop harvest begins in Vietnam, traders said on Wednesday.

"It's quite a sluggish market today because it's the first day that we are back after New Year holiday and many rice mills are still away," a trader in Bangkok said.

The benchmark 100 percent B grade Thai white rice declined to $570 per ton, from last week's range of $570-$580. The 5-percent broken grade white rice advanced to $570 a ton this week from $560 last week.

Buyers have also been absent in Vietnam, where loading for small deals to the Philippines and China were under way, traders said.

"Several private firms were buying for the Philippines but their purchase, plus loading to China, did not leave any impact on the market," a trader in Ho Chi Minh City said.

Demand has yet to emerge from Africa, one of the key buyers of Vietnamese rice after Asia, he said.

Vietnam's 5 percent broken rice stood unchanged at $415-$420 a ton, free-on-board (FOB) basis, while the 25-percent broken grain edged up to $390-$395 a ton, from $370-$375 a week ago.

"Prices of the 25 percent broken grain rose because of low supply of low-grade rice to process this variety, while there is no actual demand," the Ho Chi Minh City-based trader said.

Last week Vietnam introduced a floor of $370 a ton for low-quality 35-percent broken rice for export.

Traders said the floor price has been imposed to prevent an expected fall in prices when Mekong Delta farmers begin harvesting the winter-spring crop from late next month.

The crop is Vietnam's biggest among its three rice crops grown each year in the Delta, the food basket.

Trading is expected to pick up from next week or later this month as companies assess the winter-spring crop production in the Mekong Delta, traders said.

Final data of Vietnam's rice export were not immediately available, while the government's statistics agency has estimated the annual shipment to reach an all-time high of 8.05 million tons.