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Asia Rice: India rates slip on weak demand, rupee; Vietnam grapples with ample supply

BENGALURU (Reuters) - Rice export prices in India slid to a 15-month low this week as the rupee remained weak and demand was sluggish as buyers held off purchases on hopes of deeper price declines, while Vietnam rates fell further on mounting supplies.

FILE PHOTO: Women plant rice saplings at a paddy field in a village in Nagaon district, in the northeastern state of Assam, India, July 3, 2018. Picture taken July 3, 2018. REUTERS/Anuwar Hazarika/File Photo

Rates for India’s 5 percent broken parboiled variety fell by $2 per tonne to $386-$390 per tonne, the lowest since April 20, 2017.

“The prices are coming down due to falling rupee. Still Asian buyers are not making purchases expecting further fall in prices,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

Indian rupee has lost about 7 percent so far in 2018, increasing exporters’ returns from overseas sales and allowing them to cut prices.

Farmers in India have planted paddy rice on 11.67 million hectares as on July 13, down 8 percent from a year ago.

India earlier this month raised prices paid to local farmers for common grade paddy rice by 13 percent from a year ago to 1,750 rupees per 100 kg. The move could ease the country’s exports from October, industry officials said.

Imports by Bangladesh, which emerged as a major buyer last year, will slow down as the government imposed a 28 percent tax on rice imports to support its farmers after local production revived.

In Vietnam, where rice export prices have been on a downtrend amid increasing supplies from an ongoing harvest, rates for 5 percent broken rice fell further to the lowest since October at $390-$395 a tonne this week, from $405-$420 last week.

But traders said rates are picking up as prolonged rain in the Mekong Delta was hindering the summer-autumn harvest.

“Though prices are lower than a week earlier, they have risen by $5-$10 per tonne over the past few days,” a Ho Chi Minh City-based trader said.

“We are finding it difficult to purchase enough rice from farmers,” the trader said.

In Thailand, the world’s second-biggest exporter of the grain, prices of the benchmark 5 percent broken variety were around $380-395 per tonne, free on board (FOB) Bangkok, little changed from last week’s $378-$395 range.

Traders said prices were stable as activity remained muted.

Reporting by Chayut Setboonsarng in Bangkok, Khanh Vu in Hanoi, Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka; Editing by Amrutha Gayathri