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Thai Rice Price Falls to Lowest in Two Years as Demand Wanes Group Says

Jul 21, 2010

Thai rice prices, the benchmark for Asia, declined for a fourth week to the lowest level in more than two years as demand declined, according to the Thai Rice Exporters Association.

The price of 100-percent grade-B white rice fell 1.1 percent to $458 a metric ton from a week earlier, said Pisanu Sangyoo, an official at the association. That’s the lowest level since January 2008, when the price averaged $399, according to data from the association’s website. The price of 25-percent broken rice dropped to $395 a ton from $397 on July 14.

Thailand is the world’s biggest rice exporter and the grain is the region’s most important food. Cheaper prices may help to curb inflation across the region and cut living costs for millions of people.

“Prices may weaken further due to an absence of import orders from major buyers,” said Kiattisak Kanlayasirivat, a director at Novel Commodities SA’s Thai office, which trades about $600 million worth of rice a year. “Thai prices are also losing competitiveness compared with those of Vietnam, which is about $100 ton cheaper.”

Thailand’s white rice may tumble to $400 a ton around the end of the year, Kiattisak said.

Rice futures in Chicago, which peaked last December at $16.27 per 100 pounds on concern that India may become a net importer for the first time in more than two decades, traded today at $10.02 per 100 pounds.

The Thai association sets prices weekly.
To contact the reporter on this story: Supunnabul Suwannakij in Bangkok

Sourse : Bloomberg

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