Asia Rice: Dip in Indian rates on rupee weakness dulls Vietnam offers

By Reuters   August 16, 2018 | 06:14 pm PT
Asia Rice: Dip in Indian rates on rupee weakness dulls Vietnam offers
Vietnamese women working on a rice field. Photo by Nguyen Van Duc
Rice export prices in India fell this week as the rupee weakened, weighing on demand for the Vietnamese variety.

Rates for India’s 5 percent broken parboiled rice fell by $3 per tonne to $389-$393 per tonne this week.

“Rupee depreciation is allowing us to lower prices, but at the same time competitors are also lowering their quotes,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The Indian currency fell to a record low against the dollar on Thursday.

Farmers in India had planted summer-sown paddy rice on 30.78 million hectares as of Aug 10, down 2.9 percent from a year ago due to scant rainfall.

Monsoon rains in India are likely to be below-normal levels in 2018, a private weather forecaster said earlier this month, raising concerns over farm output and economic growth in Asia’s third-biggest economy, where half the farmland lacks irrigation.

The falling rice prices in India also weighed on the market in Vietnam, the third largest exporter, but rates for the country’s 5 percent broken variety were unchanged at $395-$400 a tonne.

“Trade is slow as Vietnamese prices are comparatively higher, especially compared with Indian prices ... Exporters have lost their African customers to Indian rivals due to that,” a Ho chi Minh City-based trader said.

Vietnam exported 444,235 tonnes of rice in July, down 17.4 percent from June, government customs data released late last week showed. That was slightly lower than a government forecast of 450,000 tonnes.

In Thailand, the world’s second biggest rice exporter, demand also remained soft, traders said.

Thailand’s benchmark 5 percent broken rice price was quoted at $390-$393, free on board (FOB) Bangkok, little changed from last week’s $390-$395.

The commerce ministry on Wednesday said Thailand had exported 6.99 million tonnes of rice worth 3.52 billion baht this year by August 15, a 2 percent increase from a year ago.

Meanwhile, Bangladesh, which had emerged as a major importer of rice since 2017 after floods damaged its crops, continued to procure rice domestically.

In the 2017-18 financial year that ended in June, Bangladesh imported a record 5.7 million tonnes of rice. However, imports dropped sharply after the government imposed a 28 percent tax on shipments to support its farmers following a revival in local output.

Rice at government warehouses stood at nearly 1.3 million tonnes, data from the country’s food ministry showed.

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