Asia Rice: India prices dip amid rupee decline, Thai rates soar on supply crunch

BENGALURU (Reuters) - Rice export prices in India dropped for a second week on sluggish demand and a weaker rupee, while Thai rates surged amid supply woes and fresh deals buoyed Vietnamese rates.

Rates for top exporter India’s 5% broken parboiled variety fell by $2 to $417-$421 per ton.

The falling rupee has allowed exporters to sign deals at lower prices without reducing net revenue, said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The dollar rose to the highest in nearly seven months versus the rupee on Thursday, pushing up prices in dollar terms.

Also weighing on Indian exports was weak demand from Bangladesh, which had emerged as a major importer since 2017 after floods depleted stocks. India had accounted for over two-thirds of Bangladesh’s imports due to lower freight charges.

Bangladesh expects to harvest 19 million tons from its summer crop, nearly 6% more than a year ago, said Mohammad Mohsin, director general of Department of Agriculture Extension.

No new deals are being struck as harvesting has started, while the government’s stock levels have improved significantly, a trader said.

In Thailand, 5% broken rice rates jumped to $445-454 per ton free on board (FOB) Bangkok, the highest since June 2017, from $437-438 last week. “This year off-season crops have been damaged by pests, so supply has decreased. In some areas, it reduced production by half of what was expected for April. Things should improve by the end of next month when new lot of off-season crops are harvested,” a Bangkok-based trader said.

Thai exporters were also stocking up amid speculation of new deals with Indonesia.

“If the deal with Indonesian government does materialise, it should be for 200,000–300,000 tons,” the trader said, adding that fresh deals with the Philippines could also happen in the coming weeks. However, another trader said the market was slightly overheated.

“I think the prices are slightly inflated because it is based more on speculation than actual fresh deals.”

Vietnam’s 5% broken rice prices rose for a fourth straight week, edging up to $438-$440 a tonne from $435-$440 previously.

“Prices remain high as Vietnam has recently been clinching new deals with Indonesia and Philippines, while the winter-spring harvest has almost ended,” a Ho Chi Minh City-based trader said.

The National Food Authority of the Philippines earlier this week sent a request to Vietnam’s Ministry of Industry and Trade to buy 250,000 tons, including 200,000 tons of 25% broken rice and 50,000 tons of 15% broken rice, as per the request seen by Reuters.

The procurement is part of the Philippines’s government-to-government purchasing plan for 2018.