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Indian rice prices ease to lowest in a year as rupee slides

BENGALURU (Reuters) - Rice prices in India fell for the third straight week to their lowest level in a year as the rupee slipped to a 16-month low, while markets in other top exporters remained relatively muted.

A woman spreads paddy crop for drying at a rice mill on the occasion of International Women's Day, on the outskirts of Agartala, March 8, 2018. REUTERS/Jayanta Dey/Files

Rates for India’s 5 percent broken parboiled variety dropped by $10 to $394-$398 per tonne.

“Indian rice is very competitive compared to supplies from Thailand and Vietnam. Export orders have improved as in dollar terms Indian prices have been falling,” said an exporter based at Pune in the western state of Maharashtra.

The rupee has fallen nearly 7 percent so far in 2018, increasing exporters’ margins from overseas sales.

Meanwhile, summer rice output in neighbouring Bangladesh is likely to hit 19.7 million tonnes, exceeding the target of 19 million tonnes, as farmers raised acreage to cash in on higher prices, a government official said on Thursday.

Rice prices in the country, which emerged as a major importer in 2017 after floods damaged its crops, jumped around 40 percent last year due to depleting stocks, forcing the government to seek supplies from Asian countries like India, Thailand and Vietnam.

Thailand’s benchmark 5 percent broken rice narrowed slightly this week to $435-$438 per tonnes, free on board (FOB) Bangkok, as against $435-$440 last week.

The country has sold rice to the Philippines in an international tender this week, a Bangkok-based rice trader said.

“The market has been relatively quiet apart from the deal with the Philippines in which we managed to sell about 200,000 tonnes of rice,” he said.

A weaker baht has also kept prices largely unchanged from last week, according to another Thai rice trader.

“The rice price should be slightly higher but the baht has weakened against the dollar,” he said, adding that low prices have attracted enquiries from some potential buyers.

“There have been some interest from markets such as Iraq and Malaysia... But, so far there’s no fresh deal on the horizon.”

In Vietnam, prices of 5 percent broken rice were unchanged from last week’s $460-$465 a tonne range, the strongest levels since August 2014.

The country is seeking to increase its rice shipments to new markets, especially to countries with which it has signed free trade agreements, such as South Korea and Australia, the General Department of Customs said, citing the Vietnam Food Association on Thursday.

The department said prices of Vietnamese rice have risen significantly of late, thanks to the country’s efforts to switch to higher quality rice varieties.

In addition, Vietnam’s Ministry of Agriculture and Rural Development said this week the country has been expanding its farming area of fragrant rice and sticky rice strains, which are of better quality and sold at higher prices.

Reporting by Panu Wongcha-um in Bangkok, Khanh Vu in Hanoi, Rajendra Jadhav in Mumbai and Ruma Paul in Dhaka; Editing by Elaine Hardcastle