An inspection of rice warehouses launched by Thailand's military government this week thinned supply and drove Thai rice prices to four-month highs on Thursday, although demand remained thin, traders said. The military is checking rice warehouses nationwide to work out how much grain was stockpiled by the government it ousted in May and check on rice quality amid alleged corruption during the time the policy was run by former Prime Minister Yingluck Shinawatra.
"The army secured the rice warehouses and ordered to stop state rice stock sales immediately, so there was less supply left on the market to sell," said a Bangkok-based trader. The price of common grade 5 percent broken Thai rice was at $420 per tonne on Thursday, up from last week's $415, traders said. The Thursday level was its highest since March 7. "Buyers are reluctant to commit deals as they are waiting to see how the military government would manage the rice stocks," said another trader.
In Vietnam, rice prices were firmer due to demand from China, Indonesia and a possible new deal with the Philippines, coupled with thin stocks ahead of a major crop harvest, traders said. The 5 percent broken rice rose to $420-$430 a tonne, free-on-board Saigon Port, from $405-$415 last week. The 25 percent broken rice also rose to $370-$375 a tonne, from $365-$370 a week ago. "The stock is low now while China has been buying strongly and the Philippines is going to buy more, which pushed up prices of all varieties," said a trader in Ho Chi Minh City. he Philippines has said it would take another 200,000 tonnes of rice from Vietnam this year after having bought 800,000 tonnes to boost local supply and stabilise retail prices. Harvesting of the summer-autumn crop is expected to peak from mid-July. China, Vietnam's top rice importer this year, bought 1.16 million tonnes in the first five months of 2014 via official trade, up 4.3 percent from a year ago, Vietnam's agriculture ministry said.
