Rice prices in major producing countries rose on Wednesday, largely due to government efforts to lift the market, while strong demand in Africa and the Philippines provided support, traders said.

The benchmark 100 percent B grade white rice in Thailand, the world's biggest exporter, rose 1.7 percent to $590 per tonne on the back of firm demand from African countries, they said.

"Thailand could sell around 100,000-200,000 tonnes rice per month to Africa, mostly parboiled rice," one trader said. 

The Southeast Asian nation has set a target to export 8.5 million tonnes of rice this year, of which 2 million tonnes is expected to be sold to Africa. Thailand exported 9.5 million tonnes in 2008.

Thai prices were also supported by a government intervention scheme that has bought 4.5 million tonnes of rice from farmers since November. It aims to buy up to 8 million tonnes before the programme expires in February.

Vietnam expects to export 1.5 million tonnes of rice this year to the Philippines, the government in Hanoi said on Wednesday, in its first confirmation of the size of a massive deal that boosted export quotations.

The pact, accounting for 30 percent of Vietnam's projected export volume this year, would fill the annual grain import needs of the Philippines, the world's largest rice buyer.

"The deal with Manila has had a clear impact on domestic rice prices," a trader with a foreign firm in Ho Chi Minh City said.

VIETNAM RAISES FLOOR PRICES

In Vietnam, the second biggest rice exporter, prices were higher after the government raised export floor prices by up to 6.4 percent on Tuesday. Loading demand for shipments to the Philippines also gave prices a lift.

The minimum export price of 5-percent broken rice was $420 per tonne, FOB, Saigon Port, up 5 percent from $400 a tonne previously, according to Vietnam's Food Association (VFA). 

The floor prices for the 10 percent and 25-percent broken grades are now $415 and $390 a tonne, FOB Saigon Port, respectively, up from $390 and $370 before, the VFA said.

However, traders said they could still find 5 percent Vietnamese rice offered at around $390 per tonne.

"It means nothing," one Bangkok-based trader said.

"Every time Vietnam sets floor prices, we can still buy at around 5 percent lower than the floor prices available in the market," he said.

Vietnamese shipments are forecast to reach 2.8 million tonnes in the first half of 2009, up nearly 15 percent from the same period last year, the VFA said in a report.

In India, the government was expected to again lower the floor price for basmati rice exports to help traders losing market share to rival Pakistan.

Last month, the government cut the minimum price at which exports were allowed to $1,100 per tonne from $1,200 per tonne.

But Indian exporters, who have faced defaults from buyers as prices fell, said the reduction was inadequate.

INDONESIA MAY EXPORT 

A bumper crop in Indonesia, Southeast Asia's biggest rice consumer, could see the country export rice this year for the first time in more than two decades.

"For the full year, we may allow total exports of 100,000 tonnes," Bayu Krisnamurthi, a senior official at the chief economics ministry, said.

Indonesia planned to raise its rice procurement this year to 3.8 million tonnes, from 3.2 million tonnes in 2008, said M. Ismet, a director at the logistics agency, Bulog.

Current Bulog stocks are 1.4 million tonnes. (Additional reporting by Nguyen Nhat Lam in HANOI, Fitri Wulandari in JAKARTA) (Editing by Darren Schuettler)

Source: Reuters