Rice prices slip in India, Thailand; big exporters woo Bangladesh

BENGALURU (Reuters) - Rice prices dipped this week in the Asian hubs of India and Thailand, but prospects of new deals with flood-ravaged Bangladesh could reinvigorate sluggish markets for the staple grain amongst top exporters in the region.

A farmer winnows rice in a field on the outskirts of Ahmedabad, November 4, 2016. REUTERS/Amit Dave/Files

Bangladesh, which has emerged as a major importer this year to try to shore up stocks in the country, is looking to buy more rice in government-to-government deals to combat high domestic prices, a food ministry official said.

“We can buy from India, Thailand and Vietnam,” he said, without elaborating.

The lowest offer in the tender from Bangladesh’s state grains buyer to purchase 50,000 tonnes of rice which closed on Thursday was $427.33 a tonne, on a cost, insurance and freight basis, liner out from a domestic trader.

In Thailand, benchmark 5-percent broken rice eased to $375-$385 a tonne, free-on-board (FOB) Bangkok, from the $390-$396 level last week on lower demand from overseas amid a strong local currency.

“Since the value of the baht remains relatively strong and stable, we can’t compete with other rice exporting countries,” a Bangkok-based rice trader said.

But there continues to be some demand for Thai rice from Bangladesh, the trader also said.

“We expect Bangladesh to import a total of 500,000 tonnes due to the flooding crisis. So far, they have already imported around 250,000 tonnes,” the trader said.

Thai prices could decline further and demand is likely to witness a seasonal slowdown toward the end of the year.

India’s 5 percent broken parboiled rice prices fell by $12 per tonne from last week to the $405-$408 range on sluggish demand and as a depreciation in the rupee allowed dealers to reduce export prices.

“In dollar terms, prices have come down due to the falling rupee. Demand from African countries is weak,” said an exporter based in Kakinada in the southern state of Andhra Pradesh.

Indian rupee has fallen 2.5 percent so far in September and was trading near its lowest level in 6-1/2 months. A weak rupee increases exporters’ margin.

India’s rice production from the summer-sown crop is likely to fall 2 percent year-on-year to 94.48 million tonnes.

In Vietnam, 5 percent broken rice was quoted at $385-$395 a tonne, FOB Saigon, versus the $390-$395 range last week, with traders attributing the high rates to a lack of fresh supply in a thinly traded market.

The Vietnam Food Association has raised the country’s target for rice exports in 2017 to 5.6 million tonnes, with the world’s third-biggest exporter having sold 3.8 million tonnes so far this year.

Reporting by Mi Nguyen in Hanoi, Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka and Suphanida Thakral in Bangkok. Editing by Jane Merriman