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Asia Rice: Rupee woes, weak demand drag India prices to 17-month lows

BENGALURU (Reuters) - Rice export prices in India slid to 17-month lows on sluggish demand and the rupee’s record fall, while concerns of tighter supplies due to floods in the Mekong Delta and prospects of orders from the Philippines and Egypt boosted rates in Vietnam.

FILE PHOTO: Farmers plant saplings in a rice field in Srinagar June 5, 2018. REUTERS/Danish Ismail/File Photo

Rates for India’s 5 percent broken parboiled variety fell by $10 to $376-$380 per tonne this week.

The Indian rupee has lost more than 12 percent so far in 2018 and hit a record low on Thursday, increasing exporters margins.

“The Rupee is helping in terms of export parity, however, there is not much demand in the market,” said Nitin Gupta, business head of rice at Olam India.

The currencies of almost all rice exporting countries have been depreciating and most are lowering prices to remain competitive, said M. Adishankar, executive director at Sri Lalitha, a leading rice exporter in the southern state of Andhra Pradesh.

In third-largest exporter Vietnam, however, rates for 5 percent broken rice rose to $397-$403 a tonne from $395-$400 last week.

The total growing area for the autumn-winter crop will only be half of the summer-autumn crop due to flooding in the Mekong Delta provinces, traders said.

“Prices are expected to rise further over the coming weeks on higher demand and tight supplies,” a Ho Chi Minh City-based trader said.

“News about the Philippines’ plan to buy 250,000 tonnes and Egypt’s interest in buying Vietnamese rice and seafood are supportive for prices,” the trader said, adding Vietnamese president Tran Dai Quang talked about rice trade with Egyptian officials during a visit late last month.

Egypt could import up to 1 million tonnes of rice next year after decades of growing a surplus following the country’s decision to reduce the total area permitted for rice cultivation to conserve scarce water resources, traders said.

Meanwhile, the Philippines will import an additional 250,000 tonnes via an open tender.

Additional demand from the Philippines could boost export prices of key suppliers Vietnam and Thailand.

In Thailand, benchmark 5 percent broken rice fell to $385-$393, free on board (FOB) Bangkok, from last week’s $393-$395 due to slow demand, traders said.

“It’s slow and steady. We haven’t seen much activity,” a trader in Bangkok said.

Thailand has exported 6.99 million tonnes of rice this year up until Aug. 14, worth $3.52 billion, according to the country’s commerce ministry.

Elsewhere, Bangladesh imported 52,640 tonnes in July-August period, according to food ministry data.

Imports by Bangladesh, which emerged as a major rice importer since 2017 after floods damaged crops, will slow down in the coming months due to a 28 percent tax on rice imports imposed in June this year to support domestic farmers, traders said.

Reporting by Patpicha Tanasasempipat in Bangkok, Khanh Vu in Hanoi, Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka; Editing by Kirsten Donovan