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India rice prices drop to five-month low; Vietnam hits multi-year high

BENGALURU (Reuters) - Rice prices in top exporter India fell this week to their lowest in five months as the rupee depreciated, while rates in Vietnam hit a four-year high amid stronger demand and limited supplies.

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India’s 5 percent broken parboiled variety prices dropped by $3 to $404-$408 per tonne.

The continuous correction in the rupee has allowed exporters to reduce export prices in dollar terms, said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The rupee has fallen about 6 percent so far in 2018 to its lowest in 16 months, increasing exporters’ margins from overseas sales.

“Indian rice is becoming more competitive in the world market due to the falling rupee,” said another exporter based at Kakinada.

Rice exports in India surged 18 percent to a record 12.7 million tonnes in the 2017/18 financial year, which ended on March 31, on good demand for non-basmati rice from Bangladesh, Benin and Sri Lanka.

An official at Bangladesh’s food ministry, however, said the country would not require hefty rice imports this year. Bangladesh emerged as a major importer in 2017 after floods damaged its crops.

“The government’s stock levels have improved significantly. I don’t think Bangladesh would need to import a huge amount this year again, even if rice crops are affected by flooding.”

Meanwhile, in Vietnam, prices of 5 percent broken rice rose to $460-$465 per tonne from $455-$460 a week earlier. It was the highest level since August 2014.

“News about Indonesia’s plan to buy another 500,000 tonnes gives an additional push to the price amid tight supplies and the recent offers from the Philippines,” a Ho Chi Minh City-based trader said.

“Indonesia is expected to work directly with Vietnam Southern Food Corp and Vietnam Northern Food Corp to buy the grain in private placements, rather than opening a tender.”

In Thailand, prices of 5 percent broken rice eased slightly to $435-$440 a tonne, free on board (FOB) Bangkok, from $435-$445 last week, on a weaker baht.

Demand was slow, Bangkok-based traders said, but they hoped lower prices would attract buyers.

“The market is still quiet, but with lower export prices now, there is more chance of sales,” a trader in Bangkok said.

Thailand, the world’s second-biggest rice exporter, will hold an auction for the last 43,700 tonnes of rice fit for human consumption from state stockpiles on Friday. A separate lot of 2 million tonnes, which is unfit for human consumption and for industrial use, will be auctioned next month.

Reporting by Patpicha Tanakasempipat in Bangkok, Khanh Vu in Hanoi, Rajendra Jadhav in Mumbai and Ruma Paul in Dhaka; Editing by Dale Hudson