India rice rates up on monsoon lull; flood threat looms in Thailand, Vietnam

Farmers plant saplings in a rice field in Srinagar June 5, 2018. Photo by Reuters/Danish Ismail

Rice prices in India rose on concerns of below-normal rainfall, while Thailand, Vietnam kept a close eye on the possibility of flooding.

Rates for India’s 5 percent broken parboiled variety rose by $3 to $392-$396 per tonne this week amid modest demand, after falling to the lowest level since April 20, 2017 last month.

“In many rice growing pockets rainfall is lower than usual. It could hit production,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

Farmers in India, the world's top rice exporter, had planted summer-sown paddy rice on 19.76 million hectares as of July 20, down 12.4 percent from a year ago.

India is likely to receive below-normal monsoon rains in 2018, a private weather forecaster said on Wednesday, raising concerns over farm output in Asia’s third-biggest economy.

Meanwhile, a senior food ministry official from neighbouring Bangladesh, which emerged as a major importer of rice in 2007, said the country does not have any plan to import rice for now due to higher local procurement.

Thailand’s benchmark 5 percent broken rice rose slightly to $385-$393 per tonne this week free on board (FOB) Bangkok, from $380-$385 last week on a stronger bhat, but demand remained flat, traders said.

“There is interest from markets like the Philippines, Indonesia and Malaysia, without any deals ... If prices remain low, these might turn into deals,” a Bangkok-based rice trader said.

Thailand is in the middle of harvesting its off-season crops. But, heavy rainfall has increased the risk of flooding, which could pressure supplies.

Traders are also keeping an eye on the water levels at 11 major dams, including several located upstream to the rice bowl in central Thailand, which have risen to near their storage limit.

Authorities, however, have stressed that flooding is not imminent.

“If the release of water results in prolonged flooding, then it could damage crops and increase prices,” another trader said.

In Vietnam, rates for 5 percent broken rice were $385-$395 a tonne, versus $390-$395 a week ago.

“Trade is quiet as we are focusing on delivering the deals signed before,” a Ho Chi Minh City-based trader said

“Flood water is rising in the Mekong Delta, prompting farmers to speed up their harvest of the summer-autumn crop.”

Government officials said on Wednesday floods from a burst dam in Laos had inundated thousands of hectares of paddy fields in the Mekong Delta, Vietnam’s rice bowl, although the damage is limited and not expected to affect the country’s export crop.

Farmers in the delta provinces have planted more than 1.69 million hectares of rice for the summer-autumn crop, government data showed.