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Asia Rice-Thai, India prices fall on weak export demand

HANOI/BANGKOK/DHAKA, July 13 (Reuters) - Rice prices in India and Thailand, the world’s top two exporters of the grain, fell this week on low export demand, traders said on Thursday.

Thailand's benchmark 5-percent broken rice RI-THBKN5-P1 was quoted at $400-$405 on Thursday, free-on-board (FOB) Bangkok, compared with $420-$430 last week.

“Big markets are done with their purchases, and exporters have also stopped buying as the loading is done,” said a trader in Bangkok.

The arrival of off-season crops from next month and potential new deals also dragged down prices, Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, told Reuters.

The Philippines issued an international tender last week to buy 250,000 tonnes of rice and bids for this need to be submitted on or before July 25.

“A contract to sell 200,000 tonnes of 5 percent parboiled rice to Bangladesh has been drawn up,” he said, adding that a delegation from Bangladesh was in Thailand last week to discuss the government-to-government rice deal.

Thailand’s commerce ministry said last week that the shipment to Bangladesh can be expected around September- October.

It also said it will negotiate deals with Iraq and Sri Lanka, which is expected to buy 200,000 tonnes of Thai rice.

In India, the 5 percent broken parboiled rice prices RI-INBKN5-P1 eased by $8 per tonne to $411-$414 per tonne.

“Buyers were quoting lower prices due to a fall in prices in other markets,” said an exporter based at Kakinada in the southern state of Andhra Pradesh, adding that demand from Asian and African buyers was weak as they were waiting for a drop in prices.

India mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East.

“An appreciating rupee has been denting our profit margin. We could not lower prices further,” said a Mumbai-based dealer with a global trading firm. The rupee has risen more than 5 percent so far in 2017.

Bangladesh, the world’s fourth-biggest rice producer, could import as much as 1.2 million tonnes of rice this year in an effort to replenish reserves to combat high domestic prices, Badrul Hasan, the head of the state grain buyer, told Reuters.

A Thai delegation and a team from India’s PEC are due to visit Dhaka next week to finalise deals, Hasan added.

“We can buy 150,000-200,000 tonnes of rice from Thailand and another 200,000 tonnes from India in state-to-state deals,” he said, adding that the rest would be imported through tenders.

Bangladesh is preferring government deals, even though they are costlier, to ensure supplies as importing through tenders is a lengthy process and sometimes suppliers fail to deliver, he said.

It is importing 200,000 tonnes of white rice at $430 a tonne and 50,000 tonnes of parboiled rice at $470 a tonne from Vietnam in a government-to-government deal at rates much higher than in tenders.

In Vietnam, the benchmark 5 percent broken rice RI-VNBKN5-P1 was unchanged at $405-$410 a tonne this week, FOB Saigon, in stable trade.

“Exporters are buying grains from farmers to finish their earlier shipping contracts, not for storage,” said a trader in Ho Chi Minh City.

Vietnam has exported a combined 2.9 million tonnes of rice in the first half of this year, up 10.3 percent from a year earlier, the country’s customs department said. (Reporting by My Pham in HANOI, Patpicha Tanakasempipat in BANGKOK, Ruma Paul in DHAKA, Rajendra Jadhav in MUMBAI; Editing by Subhranshu Sahu)