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Locked-down India rice rates hit 3-month low; Thai prices off 6-1/2-year

BENGALURU (Reuters) - A nationwide lockdown in leading rice exporter India to curtail the spread of the coronavirus pushed export prices to the lowest in about three months, while rates for the Thai variety came off multi-year peaks due to fluctuations in the local currency.

FILE PHOTO: Farmers plant saplings in a rice field on the outskirts of Ahmedabad, India, July 5, 2019. REUTERS/Amit Dave

Health researchers have warned that more than a million people in India could be infected with the coronavirus by mid-May, prompting the government to order a 21-day lockdown and shut down all air and train travel, businesses and schools.

India’s 5% broken parboiled variety RI-INBKN5-P1 rates narrowed to $361-$365 per tonne this week - their lowest since late December - as rice exporters were struggling to operate due to the lockdown. Prices slipped from last week’s $363-$367 range.

The entire supply chain has been disrupted by the lockdown, said BV Krishna Rao, president of the Rice Exporters Association.

Indian rupee INR=D4 hit a record low this week, raising exporters’ margin from the overseas sale.

In Thailand, benchmark 5% broken rice rates RI-THBKN5-P1 fell to $468-$495 on Thursday, from last week’s 6-1/2-year peak of $480-$505.

The drop in price was due to fluctuations in the currency, while the situation over demand-and-supply remained relatively unchanged, traders said.

The Thai market remained cautious over supply issues, triggered by one of the worst droughts in decades that is hurting many rice-growing areas, while traders said the outbreak has also slightly raised domestic demand of some types of rice, keeping prices higher.

The Thai government has declared a state of emergency across the country over the coronavirus, but is yet to issue any restrictions that would directly impact agricultural production or exports.

“There won’t be any shortage of rice through the crisis, but prices are likely to remain high due to concerns over supply,” a Bangkok-based trader said, adding prices could go even higher if there is overseas demand given that Vietnam has stopped exports.

Vietnam’s 5% broken rice RI-VNBKN5-P1 rates were not available after the government on Wednesday announced it halted signing new export contracts until March 28 under a review to ensure domestic supplies were sufficient during the epidemic.

“Traders and exporters have ceased all activities and the authorities have also stopped customs clearance for rice shipments from Vietnam,” a Ho Chi Minh City-based trader said.

Traders said they were waiting for a final decision from the government to see if they can continue exports or not.

Meanwhile, in Bangladesh, domestic prices of rice rose by as much as 10% as virus fears triggered panic-buying.

Prime Minister Sheikh Hasina on Wednesday called on people to refrain from stockpiling and said the country has 1.7 million tonnes of food grains in reserves.