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Asia Rice: India prices up on strong rupee; few takers for Thai variety

(Reuters) - Rice export rates in India rose this week due to an appreciation in the rupee, even as demand remained moderate, while Thai traders struggled with a lack of interest from foreign markets due to high prices.

Farmers plant saplings in a rice field in Srinagar June 5, 2018. REUTERS/Danish Ismail

India’s 5 percent broken parboiled variety rose to $386-$389 per tonne from last week’s $383-$386.

“The rising rupee is forcing us to raise prices. Demand is moderate,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The rupee was trading near its highest level in more than two months, trimming returns from overseas sales for traders in the world’s biggest exporter of the staple.

In Thailand, the world’s second-biggest rice exporter, benchmark 5 percent broken rice prices were quoted at $380-$385, free on board Bangkok, mostly unchanged from last week’s $380-$390.

Demand remained flat and the price fluctuation was due to the exchange rate between the local currency baht and the U.S. dollar, traders said.

“Domestic prices have slightly increased this week but because the baht has weakened, the export price remains relatively same,” a Bangkok-based rice trader said.

However, the baht’s gains over the past few months have prevented domestic prices from falling, denting demand for Thai rice overseas, another trader said. Higher domestic rates translate into increased procurement costs for exporters.

The market has also seen an influx of new supply, which is yet to impact export prices, according to traders.

Meanwhile in Bangladesh, rain-fed rice output or Aman crop is estimated to hit 14 million tonnes this season from 13.5 million tonnes in the previous year, due to favourable weather, Mizanur Rahman, a senior official of Department of Agriculture Extension, told Reuters on Thursday.

The Aman crop is the second biggest rice crop after the summer variety, Boro. It is cultivated during December and January, and makes up for about 38 percent of Bangladesh’s total rice production, which is around 35 million tonnes.

The south Asian country, which emerged as a major importer in 2017 after floods damaged its crops, imposed 28 percent duty to support its farmers after local production revived in 2018.

Reporting by Rajendra Jadhav in Mumbai, Panu Wongcha-um in Bangkok, Ruma Paul in Dhaka; editing by Arpan Varghese and David Evans