Asian rice prices flat on declining African orders

       THAI RICE EXPORTS YEAR-TO-DATE 2009 vs 2008 6.2m tonnes 8.1m tonnes
       Asian rice prices were supported by government intervention policies this week but lacked the momentum to rise higher as African buyers scaled back purchases,causing a decline in demand, traders said yesterday.
       Thailand's benchmark 100% B-grade white rice was unchanged from last week,at $530 per tonne, exporters said.
       "Prices remained supported as the intervention scheme is still in place,"one exporter said."However, I don't see any chance of prices rising significantly as demand is thin."
       The Thai government has extended its intervention scheme until the end of this month after protests from farmers - unhappy that the state would no longer be buying rice directly from them to support prices under a proposed new insurance scheme.
       The government is estimated to be holding the equivalent of 7 million tonnes of rice in its stocks - the largest amount since it started stockpiling the grain and has still not come up with a clear plan to reduce them.
       Demand for parboiled rice in Africa,which had generally supported Thai rice prices over the past few months, has subsided as buyers now have enough to meet domestic demand, exporters said.
       In the past few months, African buyers were believed to have bought up to 600,000 tonnes of Thai parboiled rice to build stocks in anticipation of strong demand at the end of the Muslim holy fasting month of Ramadan.
       Thailand has exported 6.2 million tonnes so far this year, down 23% from the same period last year, when it had sold 8.1 million tonnes.
       In Vietnam, the second biggest exporter, prices were also steady after jumping this month in response to a govern-ment order to exporters to keep buying rice from farmers to prevent prices falling.
       Yesterday, the Vietnamese government said the country's largest rice exporter, Vinafood 2, would stockpile 500,000 tonnes of milled rice over the next four months to support paddy prices.
       Vietnam's 25% broken rice was at $340 to $350 a tonne, free on board Saigon Port, while the higher-quality 5% broken rice stood at $390 to $400 a tonne, unchanged from last week.
       "Buyers are waiting for prices to drop after the Thai government ends its intervention scheme," a trader in Ho Chi Minh City said. Other traders said the return of the buyers should limit the drop in prices.