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Rice prices in India up as buyers cash in on recent dip; Bangladesh to axe deal

BENGALURU (Reuters) - Rice export rates in India rose this week from a one-year low hit last week as weaker prices attracted buyers from Africa, while Bangladesh said it would cancel a deal with the top exporter due to shipment delays.

A labourer carries a sack filled with rice to load onto a truck from the railway's goods yard in Ahmedabad, February 1, 2018. REUTERS/Amit Dave/Files

“African buyers are turning to India due to the recent price fall. In the last few days, inquiries have risen from buyers,” said an exporter based at Pune in the western state of Maharashtra.

Prices for India’s 5 percent broken parboiled variety rose by $5 to $399-$403 per tonne.

Even after this week’s rise, Indian rice is competitive in the world market due to a depreciating rupee, the exporter said.

The rupee has fallen more than 6 percent so far in 2018, increasing exporters’ margins from overseas sales.

India’s exports in April jumped over 12 percent from a year earlier to 989,848 tonnes, a government body said.

Meanwhile, Bangladesh will cancel a deal with India to import 150,000 tonnes, Badrul Hasan, the head of Bangladesh’s state grain buyer, said on Thursday.

The agreement with India’s state-run National Agricultural Cooperative Marketing Federation (NAFED) was signed in December as Bangladesh raced to shore up depleted stocks and combat record domestic prices of the staple after floods last year.

“We’ve no option but to terminate the deal as they couldn’t supply the rice on time,” Hasan said.

In Thailand, prices of the 5 percent broken variety stood at $430-446 per tonne, free on board (FOB) Bangkok, versus $435-438 last week.

“At the moment the price only moves with changes in the currency exchange because there’s no new demand this week,” a Bangkok-based trader said.

Another trader said Thai exporters were still fulfilling shipments to the Philippines from last week and were anticipating fresh deals.

“We heard that next month, the Philippines wants to buy 250,000 tonnes while Indonesia is interested in buying some 500,000 tonnes,” the trader said, adding that prices could change over the coming weeks as exporters step up purchases amid lower supplies due to seasonal rain.

Prices of Vietnam’s 5 percent broken rice eased slightly to $455-$460 a tonne from $460-$465 previously, the highest since August 2014, but demand from markets such as the Philippines looked steady with orders still in the pipeline, even as supply remained tight, traders said.

Supply for the 5-percent broken variety has reduced since the last harvest owing to the Vietnamese government’s plan of gradually switching to fragrant rice and sticky rice strains, which are of better quality and sold at higher prices.

Prices could be pressured going into the next harvest in mid-June or early July, the traders added.

Reporting by Panu Wongcha-um in Bangkok, Mai Nguyen in Hanoi, Rajendra Jadhav in Mumbai and Ruma Paul in Dhaka; Editing by Dale Hudson