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Vietnam rice prices near three-yr high on Indonesia, floods
Vietnam's rice export prices rose nearly 1 percent on Thursday, with the 5 percent broken grade hitting $575 a tonne and is heading towards the highest level in over three years, on demand from Indonesia and Mekong Delta flooding impact, traders said.
Rising rice prices could add more pressure to food inflation in Asia, including Vietnam which has been battling one of the region's highest inflation rate this year.
They said the loading demand of 400,000 tonnes for Indonesia, an outstanding Indonesian tender for 100,000 tonnes and rising flood waters in the Delta that have curbed operation of rice mills and raised production costs, caused prices to rise.
Seasonal floods this year in Vietnam's Mekong Delta are worsening, with waters rising to the highest level in 10 years. "The news (Of possible demand) from the Philippines could also help lift prices while the stocks in Vietnam are no longer ample," a trader in Ho Chi Minh City said.
The head of the Philippines' grain procurement agency said on Thursday he was worried about the damage to rice crops by Typhoon Nesat and could not rule out the need to import rice soon to replenish reserves.
Offers for the 5-percent broken rice hit $580 a tonne on Aug. 24 and Sept. 7, but traders said no deals were signed. Previously the grade visited $600 a tonne on Sept. 10, 2008, Reuters data show.
The 25-percent broken rice, which is often bought by the Philippines, also rose to $515-$520 a tonne, free on board basis, on Thursday from $510-$515 on Wednesday.
In Thailand, the world's top rice exporter, the main export rice grade was offered by up to 11 percent higher this week as operators held on to the grain ahead of a government intervention scheme, traders said.
The benchmark export-grade rice was at $627 a tonne this week, up from $619 last week, exporters said, and prices are expected to rise further from next month when the intervention scheme comes into effect.
High flood impact "Floods are rising high, affecting part of the third rice crop and middlemen who buy paddy from farmers to sell to rice mills have raised their prices, pushing export prices up," a second rice trader in Ho Chi Minh City said.
Flood waters are expected to peak in early October in the Mekong Delta and will stay high until mid-October, the national weather center said in an emergency flood update on Thursday.
The waters, now at the highest since 2001, are forecast to rise towards the record levels in 2000, Director Bui Minh Tang of the center was quoted in a Thursday media report as saying.
The Mekong Delta produces more than half of Vietnam's rice but accounts for 90 percent of the country's exportable grain. Vietnam ranks the world's second-biggest after Thailand in rice export.
Farmers grow three rice crop a year in the Delta and are now trying to accelerate the harvest of the third crop, the smallest with grain used mostly for domestic consumption.
Floods have damaged 4,000 hectares (9,900 acres) of rice in the Delta province of An Giang, or 3 percent of the province's third crop, after several dyke sections had been broken earlier this week, the official Tuoi Tre (Youth) newspaper said.
A small area has also been submerged in the neighbouring province of Dong Thap, the newspaper said. "Rising waters will flush into rice mills built in the low areas of the Delta and operators will have to shut the machines to avoid sinking from vibrations due to the weak floor fundament," the second trader said.
Traders said rising rice prices could affect Vietnam's inflation in the remaining months of this year.
Annual inflation in September hit 22.42 percent, easing from an annual growth of 23.02 percent last month, the government said. Hanoi was aimed at keeping the annual inflation this year at 18 percent.
tuoitrenews, reuters
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