Prices of rice dip in Asia as demand eases for India variety, Vietnam harvests peak

A farmer works on a rice paddy field in Quang Ngai province, Vietnam March 14, 2018. Photo by Reuters

Demand from African and Asian buyers remained weak, even at the lower price.

Rice export prices slipped this week across most Asian hubs, with easing demand weighing on rates in India, and a peaking harvest hurting Vietnamese rates, although inquiries from Bangladesh could trigger fresh activity.

In India, rates of the 5 percent broken parboiled variety eased by $3 per ton to $419-$423 per ton, although lower supplies limited the downside.

Demand from African and Asian buyers remained weak, even at the lower price, said an exporter based in Kakinada in the southern state of Andhra Pradesh.

“Bangladesh buying has also been falling in the past few weeks.”

However, a food ministry official in neighboring Bangladesh, which has emerged as a major rice importer since 2017 after floods damaged its crops, said traders in the country are looking to buy more rice from international markets, mostly from India, given the high rates prevailing in domestic markets.

“Rice prices in Bangladesh are still higher compared to the neighboring countries. Even after hefty imports, traders are still looking to buy rice from international markets, mainly from India,” the official said.

Prices edged lower in Vietnam as well, with the benchmark five-percent broken rice rates slipping to $405-$415 a ton from $410-$415 a week earlier, as the harvest peaked, traders said.

Traders also said that Vietnam is likely to work on new government-to-government deals with Indonesia and Malaysia, without giving further details.

Meanwhile, in Thailand, the world’s second-biggest rice exporter, benchmark 5 percent broken rice rates inched slightly lower to about $430-432 a ton, free on board (FOB) Bangkok, versus $432-$435 last week.

Local prices were buoyed by new orders from China and Indonesia this week, but a slight depreciation of the Thai baht, with the domestic currency having fallen about 0.3 percent thus far this week, meant weaker dollar prices, traders said.

“The baht weakened but China and Indonesia are still buying, keeping prices up,” a trader in Bangkok said.

Thailand’s main rice crop output in 2018/19 was estimated to rise more than seven percent to 25.81 million tons, the government said on Tuesday.

The current 2017/18 off-season crop is also estimated to come in at 8.16 million tons, 180,000 tons more than an earlier forecast in December due to heavy rainfall.