Asia rice: Demand lulls in top hubs; Bangladesh hopes for a deal with Philippines

BENGALURU (Reuters) - Export prices for Indian rice edged up this week on the back of an appreciation in the rupee even as demand was lacklustre in most exporting centres, while Bangladeshi traders looked for an export deal with the Philippines.

Workers spread rice for drying at a rice mill on the outskirts of Kolkata, India, January 31, 2019. REUTERS/Rupak De Chowdhuri/Files

For top rice exporter India, prices for the 5% broken parboiled variety were quoted around $367-$370 per tonne this week, up from last week’s $365-$367.

Export demand is weak and unlikely to revive in the next few weeks unless prices correct, said one exporter based at Kakinada in the southern state of Andhra Pradesh.

In neighbouring Bangladesh, traders are in talks with the Philippines to strike a deal for rice exports, the country’s agriculture minister Abdur Razzak said earlier this week.

The South Asian country could export 200,000 tonnes to 300,000 tonnes of rice to the Philippines, he added.

Bangladesh, which usually produces parboiled rice, has lifted its long-standing ban on rice exports, hoping to sell as much as 1.5 million tonnes to support farmers after a sharp drop in prices.

However, it still finds it difficult to export rice even after a fall in domestic prices, given the produce is more expensive than in India and Thailand.

In Thailand, the world’s second largest rice exporter, prices widened to $390-$407 a tonne on Thursday, free on board Bangkok (FOB), from $393-$404 a tonne last week.

Traders say the increase in prices can be attributed to a seasonal decline in rice supply.

“It is normal that the price increases during the rainy season, there is less supply and the logistic cost is higher,” a Bangkok-based rice trader said.

Thailand’s baht, which hit its highest in nearly six years against the U.S. dollar on Thursday, is also boosting prices for the staple, which continue to dampen demand for Thai rice.

“Demand has been flat since the start of the year and exporters are only selling to their usual customers,” another Bangkok-based rice trader said.

“Supply will continue to decline through the rainy season until at least August, when a new batch of rice will enter the market.”

Demand was uninspiring in Vietnam as well, where rates for the 5% broken rice variety fell to $340-$345 a tonne on Thursday from $345-$350 last week, traders said.

“Trading activities are quiet this week on lacklustre demand, though supplies from the ongoing summer-autumn harvest are abundant,” a trader based in Ho Chi Minh City said.

Traders said the harvest will end in two to three weeks.

Reporting by Panu Wongcha-um in Bangkok, Khanh Vu in Hanoi, Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka; Additional reporting by Swati Verma; Editing by Jan Harvey