Tight supplies lift Vietnam rates to 16-month high

Export prices of rice from Vietnam hit their highest levels since July 2021 this week, with traders expecting a fall in supply as well as growing demand for the cereal to support prices into the year-end.

Vietnam's 5% broken rice (RI-VNBKN5-P1) was offered free on board at $438 per tonne, compared with last week's $425-$430 range.

"The increase in prices this week was due to tightening supplies from the Mekong Delta," a trader, based in the Mekong Delta province of An Giang, said, adding at the current level, "Vietnamese rice prices are now higher than other exporting peers".

Prices would keep edging higher until the end of December on dwindling stocks and rising demand from China and European countries, some traders said.

Top exporter India's 5% broken parboiled variety rates (RI-INBKN5-P1) were unchanged at $373-$378 per tonne amid good demand from importing countries.

"Rice prices are moving up in other exporting countries. Indian rice is cheaper even after paying export duty," said an exporter based in Kakinada in the southern Indian state of Andhra Pradesh.

Limited supplies are available for exporters as Indian government has been aggressively buying new season paddy from farmers, the exporter said.

India has raised the price at which it will buy the new-season common rice paddy variety from local farmers by 5.2%, the biggest increase in five years.

Domestic prices in neighbouring Bangladesh stayed elevated despite a series of efforts, including allowing imports and duty cuts, traders said.

The U.S. Department of Agriculture had forecast Bangladesh's production to drop 1% from last year to 35.6 million tonnes in the 2022-23 marketing year due to floods.

Bangladesh, traditionally the third-biggest rice producer in the world, often imports to manage shortages caused by natural disasters.

Thailand's 5% broken rice prices (RI-THBKN5-P1) were quoted at $419-$425 per tonne, compared with $410-$425 last week.

Traders said fluctuations in prices were due to the exchange rate, while overseas demand remained steady with no major deals taking place. USDTHB

"There have been some deals, while many importers are stocking up for future orders," a Bangkok-based trader said.