Bangladesh’s plan to import rice from Thailand could be suspended due to high prices, the country’s food ministry said on Thursday (27/07), after the government’s deal with India fell through for the same reason.
Bangladesh, the world’s fourth-biggest rice producer, has emerged as a major importer of rice this year due to depleted stocks and record local prices following flash floods.
“We could not finalize the deal with Thailand as their offer was too high,” said a senior food ministry official, who asked not to be quoted as he is not authorized to talk to the media.
This would not hamper import plans, he said, adding, “we are going to Cambodia next week.”
However, Badrul Hasan, the head of the state grains buyer, told Reuters that the deal was still open.
“We’ll go for it if their new offer is competitive,” he said.
The fifth tender by Bangladesh’s state grains buyer to import 50,000 tonnes of parboiled rice, which opened on Thursday, drew the lowest offer from Olam at $419.51 a tonne, CIF liner out.
Its sixth tender since May for a similar quantity of rice will close on Aug. 8.
The possible suspension of the deal with Thailand came after the government deal with India failed to materialize due to high rates, though private traders have been importing the grain from its neighbor since last month after the government cut import tariffs.
A Thai delegation was in Dhaka early this week to finalize the deal to export up to 200,000 tonnes of rice.
“Thailand will submit a new offer. The deal is not totally off,” Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association told Reuters.
The price band on country’s benchmark 5-percent broken rice widened slightly at $395-$408, free-on-board (FOB) Bangkok.
Traders in Bangkok cited weak demand and slow trade, but the small rise in quotes was due to the appreciation of the Thai baht against the dollar.
The baht was trading at 33.32 against the dollar, the strongest in more than two years.
In Vietnam, the world’s third biggest rice exporter, domestic prices edged up after Vietnamese rice suppliers won deals for selling a total volume of 175,000 tonnes.
“Local prices rose slightly but FOB prices couldn’t as they are high already,” said a trader in Ho Chi Minh City.
The country’s benchmark 5-percent broken rice stayed flat at $400-$405 a tonne, FOB Saigon.
Trade was thin as export prices were too high, with the market now mostly focusing on government-to-government deals.
“Commercial trade can only be more vibrant once the prices drop further, which is not likely to happen soon,” the trader added.
India also saw sluggish export demand which caused its 5 percent broken parboiled rice prices to ease by $5 per tonne to $400 to $403.
“Still, demand is weak. There is no improvement in demand from African buyers,” said an exporter based in Kakinada in the southern state of Andhra Pradesh.
India, the world’s biggest rice exporter, mainly exports non-basmati rice to African countries and premier basmati rice to Middle East.
“The appreciating rupee has been making it difficult for us to lower prices,” said another exporter based in Kakinada.