Iraq's government-appointed buying agency, Al-Owais, has purchased 44,000 mt of Thai 100% Grade B white rice, according to sources close to the trade.
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ADM sold the cargo with backing from Tanasan although a sale price has not been disclosed. A Singapore-based trader reported that the cargo will be loaded onto MV Sand Topic, which is due in port Sept. 28.
The Iraqi Ministry of Trade divested rice procurement responsibility to Al-Owais in June. Since then, the company has purchased more than 250,000 mt of rice for Iraq's rice distribution scheme, including a total of 84,000 mt from Thailand, following on from a sustained period without government-backed rice imports.
The two purchases mark a sharp change from recent years, in which Iraq purchased rice from the Americas almost exclusively. One Thailand-based broker reported that the sale was "good for Thailand after seven years of boycott" by Iraq.
One of the main reasons for the "boycott" in recent years has been Thailand's uncompetitive prices. However, Thai white rice prices have weakened fairly consistently since February. S&P Global Platts' benchmark assessment of Thai 5% broken white rice has weakened from $542/mt FOB to $374/mt FOB between Feb. 10-Sept. 20 as the slow pace of exports, high stocks and the baht weakening against the dollar weighed on prices.
As a result, Thailand is no longer pricing itself out of the market. While not the cheapest Asian origin, the close pricing spread between white rice prices in other origins means that Thai rice can rely on its high-quality and its exporters' trusted reputation to secure large volume sales, such as these recent ones to Iraq.