SINGAPORE: Rice exporters in Thailand and Vietnam are renegotiating prices on sales contracts for around half a million tonnes for August shipment, two trade sources say, as India’s ban has tightened global supplies.
Exporters are rushing to cover supplies from farmers who have raised prices following a surge in the world market, putting millions of dollars worth of deals at risk.
Top exporter India late last month banned non-Basmati white rice exports amid uncertainty over domestic production, heightening food supply worries among importers of the staple in Asia and Africa.
“Prices have gone up since India banned exports and it is difficult for suppliers to fulfil contracts signed at lower prices,” said one Singapore-based trader, with direct knowledge of talks.
Thailand and Vietnam, the world’s second- and third-largest exporters respectively, are expected to ship more than one million tonnes of rice in August. India is the world’s biggest rice exporter, accounting for around 40% of global supplies.
Global prices of key rice varieties shipped worldwide have climbed by about $80 per tonne since India imposed the ban on July 20, they said.
The price of Thai 5% broken rice, an Asian benchmark, has climbed to $625 per tonne, versus $545 around two weeks ago, while similar variety from Vietnam has risen to $590 from a range of $515 to $525.
“The current prices are way higher than the contracted prices,” said one trader in Ho Chi Minh City. “The export price surge has resulted in a sharp rise in domestic paddy prices. Several traders are now rushing to speed up their purchases from farmers.”
Importers, including the Philippines, are likely to seek direct deals with governments of exporting countries to ensure critical food supplies.
The Philippines is looking to build up its inventory of rice, including imports, with the government encouraging private traders to increase their purchases, a senior agriculture official said on Tuesday.