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Asia Rice: Prices languish as top exporters harvest, demand stalls

(Reuters) - Rice export prices fell in top Asian hubs this week on slow demand and rising supply following a quiet start to the year, while limited interest from the Philippines failed to spur a Vietnamese market reeling from Chinese import restrictions.

Farmers remove weeds growing alongside with ride stalks at a ricefield in Naujan, Oriental Mindoro in Philippines, August 27, 2018. REUTERS/Erik De Castro

In top exporter India, 5 percent broken parboiled variety eased to $380-$385 per tonne from $383-$388 last week as supply from the winter crop poured in.

Demand from Asian and African buyers was subdued, an exporter based in Kakinada in the southern state of Andhra Pradesh said.

India’s rice exports between April and December dropped 10.2 percent from a year earlier to 8.46 million tonnes, a government body said last week.

In Thailand, benchmark 5 percent broken rice prices fell to $382-$398 a tonne, free on board Bangkok, from $390–$402 previously.

“The market has been really quiet and new supply of rice is coming out now,” a Bangkok-based trader said.

A weaker domestic currency was adding further pressure to prices, traders said.

“More supply will lower prices further but exporters are still looking for buyers because it has really been quiet since the start of the year,” another trader said.

Thailand is the world’s second biggest rice exporter followed by Vietnam, where rates for benchmark 5 percent broken rice fell to $340 a tonne from $350 two weeks ago before the markets closed for the Lunar New Year holiday.

“Trade has resumed and we have seen more buyers from the Philippines placing orders,” a trader based in Ho Chi Minh City said, adding that private buyers from rice-scarce Philippines purchased about 20,000 tonnes this week.

However, China has been imposing stricter conditions for rice imports from Vietnam, traders said.

China will likely cut rice shipments from Vietnam to 500,000-600,000 tonnes this year from around 1.5-2 million tonnes a year in the past, another trader said.

“We think the government will likely buy rice this year for stockpiling, giving a support for domestic prices.”

Export prices, however, will be under pressure as the major winter-spring harvest peaks by month-end, traders said.

Elsewhere, Bangladesh, which saw imports surge in 2017 after floods wreaked havoc on local crops, will procure more rice locally as output has revived, a food ministry official from the country said.

“We are getting good response in our local procurement drive and will continue it,” the official said.

Bangladesh has procured nearly 1.4 million tonnes of rice locally so far in the current season to build state reserves.

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

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