Vietnamese rice export prices jumped up to 10% on the prospect the country's top grain exporter, Vinafood 2, may win about half of the volume sought in a tender this week by the Philippines, traders said on Wednesday.
But they said the rise would not affect supply as Vinafood 2 had stocks available and there was no trading at the moment on domestic markets.
The 5% broken rice jumped up to 10% to between $530 and $550 a ton, free-on-board basis, from $500 before the tender and the 25% broken grain rose 4.3% to $480 a ton, free-on-board, from $460.
The Philippines, the world's biggest rice buyer, said on Wednesday it may award only 500,000 to 520,000 tons of rice, 300,000 tons of which could go to Vinafood 2 and the rest taken up by Thai suppliers.
Vietnamese rice export prices are increasing
Rice traders offering to supply the Philippines, the world’s biggest buyer, raised prices by more than $100 a metric ton compared with last month, reflecting increased global demand.
Suppliers including Vietnam Southern Food Corp. offered to sell at $598 to $697 a ton at a tender today for a total of 600,000 tons, National Food Authority Deputy Administrator Vic Jarina told reporters. The offers compare with the $468.50 and $480 a ton that National Food agreed to pay at a Nov. 4 tender.
The Philippines advanced rice tenders for 2010 after storms hurt local output, exacerbating a domestic shortfall. India, the second-largest grower, may become a net importer in 2010 for the first time in more than two decades after drought cut local production. Rice is Asia’s most important food.
“Unfortunately for the Philippines, we have been moving into period of higher global rice prices, in part because India is also likely to import next year,” said Frederic Neumann, an economist at HSBC Holdings Plc in Hong Kong. “Higher rice prices are likely to prevail for quite some time.”
Rice futures in Chicago have jumped 37 percent from this year’s low of $11.195 per 100 pounds and traded today at $15.34. The Thai benchmark price, for 100 percent grade-B white rice, was set last week at $590 a ton, up from $561 the week before. The Thai price of the grade sought by the Philippines, 25 percent broken white rice, was set at $466 a ton on Nov. 25.
Record Prices
Higher rice prices could spur inflation in nations across Asia and Africa and may stoke social unrest if the poorest are unable to afford food. Rice reached a record in 2008 amid trade curbs by suppliers including India and Vietnam, fueling concern among policy makers that there was a global food crisis.
“Everybody was waiting for this tender because it will decide the price” for purchases that follow, Rakesh Singh, a trader at Emmsons International Ltd., said from New Delhi. Emmons was not among the companies offering supplies at today’s tender, which may be awarded within a week.
The Philippines may import as much as 3 million tons next year in a “worst case scenario,” National Food Spokesman Rex Estoperez said on Nov. 23. That’s more than 10 percent of next year’s global rice trade, estimated at 29.5 million tons according to the U.S. Department of Agriculture on Nov. 10.
Vietnam Southern offered 600,000 tons in today’s tender, and in total the suppliers offered as much as 1 million tons, Jarina said. The Philippines has announced four tenders for 2010 supplies and is seeking a total of 2.05 million tons.
The other four suppliers that qualified today are Toepfer International Asia Pte Ltd., Asia Golden Rice Ltd., Louis Dreyfus Corp. and Chaiyaporn Company Rice Ltd., according to National Food.
Vietnamese Forecast
Rice may climb about 50 percent next year to $800 a ton as demand surges, Truong Thanh Phong, chairman of the Vietnam Food Association, said on Nov. 29. The group represents more than 100 companies from the world’s top rice exporter after Thailand.
Global rice output is forecast to drop 3 percent from a year earlier to 432 million tons in the 2009-2010 marketing year, resulting in a shortfall of 4.75 million tons, according to estimates by the USDA on Nov. 10.
Storms this year damaged 1.3 million tons of rice in the Philippines. India’s monsoon-sown harvest may drop 18 percent to 69.45 million tons, according to the nation’s farm ministry.
