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India rice export prices driven up by higher local rates

BENGALURU (Reuters) - Rice export prices in India recovered this week from their lowest in 21-months on increased rates for local paddy, while trade was muted in Vietnam and Thailand as traders waited for fresh orders from the Philippines.

Labourers remove dried grass from a rice field on the outskirts of Ahmedabad, India, August 30, 2016. Picture taken August 30, 2016. REUTERS/Amit Dave/File Photo

Top exporter India’s 5 percent broken parboiled variety was quoted around $362-$369 per tonne this week, versus $361-$367 last week, the lowest since January 2017.

Supplies from the new season crop have started but are expensive due to the hike in government-fixed buying prices, said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The government in July 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 for the new season crop.

The country’s production of summer-sown rice is estimated to grow 1.8 percent this year to 99.24 million tonnes.

In Thailand, benchmark 5 percent broken rice prices stood at $380-$398 per tonne, free on board (FOB) Bangkok, only a slight change from last week’s $380-$400, as demand remained flat with no fresh overseas orders, traders said.

“The market still expects orders from countries like the Philippines before the end of the year but so far things are fairly quiet,” a Bangkok-based rice trader said.

“I think prices will likely drop towards the end of November and start of December, a period when we are expecting new harvest,” another trader in Bangkok said, adding lower prices could in turn attract fresh orders.

The Thai government remains confident that the country could reach its 11 million tonne rice export target before year-end.

In Vietnam, rates for 5 percent broken rice edged up to $415-$420 a tonne from $410-$415 a week earlier, but trade remained quiet.

“We have heard the Philippines will reopen another bidding round for over 200,000 tonnes on Nov. 14, after failing to secure offers from Vietnam and Thailand recently,” a trader based in Ho Chi Minh City said.

“I don’t think the next bidding round will have any impact on prices of Vietnamese rice given that rates are already high. Vietnam didn’t offer (during the last round) on Nov 6 because the import terms were more stringent.”

Reporting by Panu Wongcha-um in Bangkok, Khanh Vu in Hanoi and Rajendra Jadhav in Mumbai; Editing by Arpan Varghese and Kirsten Donovan