Money News

India rice rates hit more than three-month high, Chinese rules weigh on Vietnam

BENGALURU (Reuters) - Rice export prices in India rose to their highest in more than three months as a key producing region hiked procurement rates for domestic paddy, while concerns over stricter Chinese rules weighed on the Vietnamese market.

A man gets sample for quality checking at a rice processing factory in Vietnam's southern Mekong delta, Vietnam July 6, 2017. REUTERS/Kham

Top exporter India’s 5 percent broken parboiled variety was quoted at $375-$382 per tonne this week, the highest since Sept. 7.

The central state of Chhattisgarh, a leading rice producer, raised the minimum paddy buying price to 2,500 rupees per 100 kg, from 1,750 rupees earlier this week.

“Importers are not ready to pay a higher price. Exports are likely to slow down in coming months,” said an exporter based at Kakinada, in the southern state of Andhra Pradesh.

Prices of Vietnam’s 5 percent broken rice declined for the fifth straight week to $385 a tonne as activity remained muted, traders said.

“Prices fell further because we are concerned that China’s move to impose stricter conditions on Vietnamese rice will have a long-term impact,” a trader based in Ho Chi Minh City said.

“It’s not clear if China is buying more from Cambodia and Myanmar to compensate for the possible declining shipments from Vietnam.”

Another trader said supplies from Vietnam will increase from late next month when the winter-spring harvest begins.

In Thailand, benchmark 5 percent broken rice prices were quoted at $390-$391 per tonne, free on board Bangkok, versus $385-$393 a week ago, as the market is expected to remain quiet until well after the New Year period.

“This is a reasonable level as we’re nearing the end of the year. There is not much overseas activity and we’re also in the harvesting season,” a Bangkok-based trader said.

Meanwhile, Bangladesh, which emerged as a major importer of rice in 2017 due to stock depletion following floods, has stepped up efforts to procure more rice locally after output of the staple grain improved, a food ministry official said.

“The response from farmers is very good and the procurement drive will be continued,” the official said.

The country’s production for 2018/19 is expected to recover to 34.7 million tonnes, up 6.3 percent year-on-year, according to estimates from the U.S. Department of Agriculture attaché in Bangladesh.

The South Asian country has procured more than 1.3 million tonnes of rice locally so far in the current season to build state reserves.

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