India rice prices recover; low Thai rates dampen Vietnamese offers

A farmer harvests rice on a rice paddy field outside Hanoi, Vietnam, June 7, 2018. Photo by Reuters/Kham

Rice export prices in India recovered this week after demand improved, while rates for the Vietnamese variety eased.

Rates for top exporter India’s 5 percent broken parboiled variety edged up by $2 per ton to $373-$377 per ton this week, from their lowest in 17 months last week.

“Enquiries from African buyers have risen in the last few days,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

Another exporter, based in Mumbai, said Indian rice was currently competitive due to rupee depreciation.

The Indian rupee has lost more than 13 percent of its value so far in 2018, and plunged to a record low earlier this week, increasing exporters margins.

Meanwhile, in neighbouring Bangladesh, rice output from the summer-sown crop ‘Boro’ hit 19.5 million tonnes, exceeding the target of 19 million tonnes, as farmers raised acreage to cash in on higher prices, data from the Bangladesh Bureau of Statistics showed.

Last year, the country’s Boro rice crop, which accounts for more than half of the country’s typical annual rice production, fell to its lowest in seven years after floods destroyed crops.

In Vietnam, traders offered benchmark 5 percent broken rice at $395-$405 a ton, slightly lower than last week’s $400-$405 range.

Despite potential demand from the Philippines in the aftermath of Typhoon Mangkhut, which damaged paddy in the country, prices for the Vietnamese variety did not go up since Thai rates were lower.

“If we increase prices further, people will just go and buy Thai rice,” a Ho Chi Minh City-based trader said.

The south-Asian country, which has already completed the harvest of its two major crops, exported 4.5 million tons of rice in the first eight months, meeting around 70 percent of the whole-year projection of 6.5 million tons set out by the government.

A trader estimated Vietnam’s current autumn-winter mini crop could yield around 1.8 million tons, half the volume of a major crop, with most of the rice likely to be kept for domestic consumption given the next harvest will not be until March 2019.

In Thailand, benchmark 5 percent broken rice prices were quoted at $390-$393 per ton, free on board (FOB) Bangkok, unchanged from last week.

While demand was flat, it would pick up in the near future due to natural disasters in the region, especially in the Philippines and Indonesia, traders said.