Indian rice prices recover slightly; harvest boosts Vietnamese stocks

A stronger rupee helped lift rice export prices in top exporter India from a near seven-month low this week, while rates for the Vietnamese variety slipped as the harvest in the Mekong Delta gathered steam.

A seller displays rice bags for sale at a store in Da Nang City, Vietnam March 14, 2018. Photo: Reuters

India’s 5 percent broken parboiled variety was quoted around $364-$367 per tonne, up from last week’s $362-$365.

Demand was subdued but exporters were forced to raise prices due to the stronger currency, said an exporter based at Kakinada in the southern state of Andhra Pradesh.

A strong rupee reduces exporters’ margin from overseas sales.

India’s neighbour Bangladesh raised import duty on the staple to 55% from 28%, officials said on Thursday, amid widespread protests by farmers over a drastic dip in domestic rates.

The duty hike, which came into effect on Wednesday, will make it nearly impossible for India to export rice to Bangladesh, traders in India said.

Bangladesh emerged as the biggest buyer of Indian rice in 2017 after floods destroyed its crop, but the country now has a surplus of between 2 million and 2.5 million tonnes of rice, a Bangladeshi food ministry official said.

Bangladesh is planning to export surplus rice for the first time since banning overseas selling of some common rice varieties in May 2008 when there was a spike in domestic prices. It banned all rice exports a year later.

In Vietnam, rates for benchmark 5 percent broken rice fell to $350 a tonne on Thursday, from $355 last week.

“Prices edged down from last week as supplies are building up amid an ongoing harvest in the Mekong Delta region,” a trader based in Ho Chi Minh City said.

“Sales are slow this week as buyers are waiting for the new rice.”

Iraq recently signed a contract to buy 150,000 tonnes of Vietnamese rice for delivery in June and July, another trader said.

In second biggest rice exporter Thailand, the 5-percent broken variety was unchanged from last week at $385-$400 a tonne, free on board (FOB) Bangkok, as demand remained flat with the market not expecting any major deals in the short term.

“There are concerns that the drought this year would lower rice supply later, but there is no shortage yet as we enter the rainy season,” a trader said.