Vietnam will later this week introduce a floor of $370 a tonne for low-quality 35-percent broken rice for export, a trader and officials said. "The floor price means Vietnam has been negotiating with someone for a large deal and they may be talking about 25-percent broken rice," said a trader in Ho Chi Minh City.
Vietnam has recently signed a deal to export 300,000 tonnes of rice to Haiti, with 20,000 tonnes to be loaded in the first quarter of 2013. However, prices of several grades of Vietnamese rice were offered in narrow ranges. Five-percent broken rice was at $415-$420 a tonne, on a free-on-board basis, from last week's $410-$420. The 25-percent broken grain eased to $370-$375 a tonne, from last week's $372-$385.
Following a similar trend, Thai rice prices also slipped lower on thin demand, with falls also limited by government intervention, traders said. The prices of benchmark 100 percent B grade Thai white rice declined to $570 per tonne, from last week's $580. The prices of 5-percent broken grade white rice dropped to $560 per tonne, from $570 the week before, they said.
"Buyers were all well-stocked and the market was very quiet," said a Bangkok-based trader. Thai rice prices were way above the same grades offered by India and Pakistan of $435 per tonne and $425 per tonne respectively. Prices were pegged at uncompetitive high levels due to a government scheme that pays farmers higher-than-market prices of 15,000 baht ($490) per tonne, pushing Thai prices to $150-$175 per tonne higher than rice from other places, resulting in sharp falls in annual exports. Thailand has exported 6.4 million tonnes so far this year, down 37 percent from 10.1 million tonnes in the same period last year, according to the Thai Rice Exporters Association data.