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Asia Rice-Prices Little Changed, Vietnam Govt Buying Supports

Source: Reuters
19/08/2009

Bangkok, Aug 19 - Asian rice prices were little changed on Wednesday, with Thai prices edging down slightly because demand was thin but buying by the government supported the market in Vietnam, exporters said.

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The price of Thailand's benchmark 100 percent B grade white rice fell 1.8 percent to $550 per tonne from last week's $560.

"Demand is falling. We can sell only some premium grade fragrant rice and parboiled rice," one exporter said, adding that white rice sales were sluggish.

Traders said demand for Thai white rice was expected to fall further, although sales of other grades would provide some support for the market in general.

"Demand for premium-grade fragrant rice and parboiled rice remains steady. We are selling quite well in Africa and the Middle East," another exporter said.

The latest government intervention scheme ended on July 31 but was still supporting the market because it had drained so much supply into government stocks, exporters said.

After successive intervention schemes, the government was estimated to be holding the equivalent of 7 million tonnes of rice stocks, the highest ever.

It unveiled plans in July to sell 500,000 tonnes of milled rice and 600,000 tonnes of paddy from its stocks, but there has been no announcement since and official sources said details were still being worked out.

Thailand, the world's biggest rice exporter, has shipped 5.3 million tonnes of rice so far this year, down 25 percent from the same period of last year when it sold 7.1 million tonnes, according to Commerce Ministry data.

In Vietnam, the second biggest exporter, prices inched higher due to government buying, traders said.

Paddy prices have risen about 3-4 percent in the past week in the Mekong Delta provinces thanks to purchases by the government under a plan to stockpile 400,000 tonnes to boost prices, the Vietnam Food Association (VFA) said in its weekly report on Wednesday.

Prices for the 5 percent broken and 25 percent broke rice grades were stable at 6,800 dong per kg, or $382 a tonne, and 5,800 dong per kg, or $325 a tonne, respectively, the VFA said.

Rice exporters started buying 400,000 tonnes of summer-autumn rice, or 800,000 tonnes of paddy, last week, as the government sought to stem a fall in domestic prices at the peak of the harvest, at a time of slow export demand.



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