Asia Rice: India rates tumble; Vietnam hopes to clinch Philippines deal

BENGALURU (Reuters): Rice export prices in India slumped last week as the rupee fell and demand remained weak with buyers expecting further dips, while low supplies and the prospect of a new deal with the Philippines pushed up prices for the Vietnamese variety. In top exporter India, rates for the 5% broken parboiled variety fell by $ 5 to $ 371-$ 375 per ton, the lowest in 17 months.

“Rates are down due to the rupee and weak demand. Buyers are postponing purchases expecting further falls in prices,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The Indian rupee has fallen 13% so far in 2018, increasing exporters’ margins. In Vietnam, however, rates for benchmark 5% broken rice rose to $ 400-$ 405 a ton from $ 397-$ 403 during the previous week on tight supplies and rising demand.

“The Philippines is about to announce a plan to buy an extra 133,000 tons, while supplies are running low,” a Ho Chi Minh City-based trader said.

The World Economic Forum held in Hanoi from 11-13 September saw Cambodian Prime Minister Hun Sen encouraging the Mekong region to establish an association of rice exporting countries.

In Thailand, benchmark 5% broken rice prices were little changed at $ 390-$ 393 per ton, free on board (FOB) Bangkok, compared with previous week’s $ 385-$ 393 as activity remained slow, traders said.

“There’s so little market activity lately that traders are just taking naps,” a trader in Bangkok said, adding that he has tried to convince buyers to make purchases now when the prices are considered low for the grade.

Thailand had exported 7.65 million tons of rice this year up until last Friday, according to the latest commerce ministry data.

Another Bangkok-based trader said he expected demand from the Philippines and Indonesia to pick up in the coming weeks due to recent natural disasters in the two countries.

“Prices have been at this level for a while and shouldn’t go any lower. Prices are actually expected to increase because of anticipated demand from the Philippines and Indonesia,” the trader said.

Elsewhere, Bangladesh, which stepped up its imports last year after floods destroyed its crops, has procured more than 1.1 million tons of rice locally so far to build state reserves, after output of the grain revived.

“We are getting a good response in our local procurement drive and will continue it,” a food ministry official said.