"China is buying, and rice is also being transported to the north," said a trader in Ho Chi Minh City. China, the largest Vietnamese rice buyer this year, imported 1.92 million tonnes of the grain in the first 11 months, soaring from nearly 300,000 tonnes in the same period in 2011, Vietnam Customs data showed.
The country is due to start harvesting its major winter-spring crop in February, traders said. Thailand is also expected to harvest its second-crop in late-February, when around 7 million tonnes of paddy will come to market. Huge stocks in Thailand and India have also been keeping pressure on prices.
Thailand is believed to be holding a record 14 million tonnes of milled rice in stocks, while India has 30.6 million tonnes in government warehouses, compared with a target of 5.2 million tonnes. "Huge stocks and rising supply are still weighing on prices at a time when demand is thin and major exporters such as India and Vietnam are cutting prices," said a Bangkok-based trader.
India 5-percent grade broken rice was offered at $420-$425 per tonne, while the same grade from Pakistan was offered at $410-$415 per tonne In contrast, Thai rice prices were still pegged at uncompetitively high levels, cutting exports sharply, as the government renewed its rice-buying scheme, which aims to pay farmers higher than market prices of 15,000 baht ($490) per tonne.
The offer for Thai 5-percent broken grade was at $570 per tonne, up from last week's $550 and well above the same grade for Vietnam, India and Pakistan. Thai exports have fallen to 5 million tonnes so far this year from 9 million tonnes in the same period last year. The Thai Rice Exporters Association forecast Thailand to export around 6.5-6.8 million tonnes at best this year. That would see the country dethroned as the world's biggest rice exporter for the first time since 1983, sliding to the No 3 position.
The biggest exporter looks set to be India, which has exported 10.5 million tonnes so far this year. The No 2 will likely be Vietnam, which had exported 7.33 million tonnes of rice as of December 13, breaking the record-high of 7.2 million tonnes shipped last year, according to the Vietnam Food Association.