Many Buyers Switch From Vietnam To Thai Rice On Lower Premium

The premium enjoyed by Thai rice exporters has narrowed to $10-$15 from $30 earlier, prompting many buyers to switch to the better quality Thai rice, although Vietnamese rice still sells at a slight discount, said market participants. "The quality of Thai rice is good, attributed to high-yield rice varieties grown by farmers, as a result of which buyers are likely to demand more Thai rice," said an official at Thailand's Rice Farmers Association Monday. 
 
Vietnamese local exporters sold 5% broken rice at $305/MT for contracts signed in March, only $10 lower than those by Thai firms, the official said. In previous years, the price of Vietnamese export rice was much lower than Thai rice, but now the price gap has narrowed considerably due to factors such as supply shortages, high demand and rising world rice prices.
 
  According to the Vietnam Food Association, the selling price of Vietnamese rice previously stood around $220/MT, or 20% lower than the global market average. It was also the cheapest price level among the world's five leading rice exporters, including Thailand, India, the U.S. and Pakistan. 
 
Monday, Vietnamese 5% white rice is at $300-$305/MT, while Thai 5% white rice is at $315/MT. Vietnamese 10% white rice is at $295/MT, while Thai 10% white rice is at $310/MT. Vietnamese 25% white rice is at $280-$285/MT, while Thai 25% white rice is at $290-295/MT. Vietnam's January to April rice exports are estimated at 1.4 million MT totaling $446 million, down 19.4% in volume and 7.3% in value on year, according to the latest Government Statistics Office report released April 25.
 
Vietnam, the world's second biggest rice exporter after Thailand, initially lowered its grain shipment target for 2007 to 4 million MT after pests damaged part of the crop last year. Rice exports totaled 4.75 million MT in 2006. 
 
However, Vietnam's Ministry of Trade expects rice exports to increase to 5 million MT in 2007, in response to new disease-resistant growing techniques and export promotion policies. "Thai rice exports are more reliable in terms of shipment and quality compared with Vietnam," said the Rice Farmers' Association official. "So we can still be competitive and enjoy high rice export prices." 
 
Thailand's total rice export volume is expected to reach 8.5 million MT in 2007, compared to 7.5 million MT last year.