HANOI - Vietnamese rice prices eased this week on thin buying demand but remained higher than prices in Thailand, keeping the market at a standstill, traders said on Wednesday.
"Buyers are away for holidays and they have requested deliveries to avoid this period," a trader in Ho Chi Minh City said.
Vietnam's 5-percent broken rice dipped to $370-$372 a ton, free-on-board (FOB) at Saigon Port <RI-VNBKN5-P1>, from $375-$378 a ton last week, while Thai rice of the same grade <RI-THBKN5-P1> stood at $345-$355/ton, FOB basis.
"Vietnam's domestic market prices are lower, but the export prices are still higher, so Vietnam can't compete with Thailand," the trader said.
Thailand and Vietnam are the world's second- and third-biggest rice exporters after India, with combined shipments making up nearly 40 percent of global rice trade in 2015, according to the U.N. Food and Agriculture Organization (FAO).
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Traders were awaiting more details from the Philippines, which plans to import 300,000-400,000 ton of rice in the second quarter of 2016.
"A tender could be issued next month and it will be good for Vietnamese rice prices next year if Vietnam gets a deal at the year start," another trader said.
Vietnam has exported 6.38 million ton between Jan. 1 and Dec. 15, up 2.9 percent from a year ago, based on customs' data, on track to reach its annual target of 6.5-6.8 million tons.
The volume excludes 1.5 million tons sold to top buyer China across the land border with Vietnam, according to industry estimates.
In a separate development, Vietnam and East Timor have earlier this week reached an agreement on rice trade, Vietnam's trade ministry said in a statement on its website, without giving any volume or time of sales.
Thailand also saw thin buying demand in recent weeks, traders said.
"I've been trading rice for a long time, and I can say this year is the worst year for Thai rice. It's unprecedented," said a senior trader in Bangkok.
"We've always said our rice is hard to sell because it's more expensive than Vietnamese rice. But now Thai rice is cheaper and still remains unsold, you know this is a crisis," he said.
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Thailand's rice exports this year could drop 13.6 percent from 2014 to 9.5 million tons, the FAO said in its December report. It forecast Thailand will ship 10.4 million tons in 2016, while Vietnam could sell 8.7 million tons.
