"The baht has strengthened, but demand is still weak," one trader in Bangkok said. The Thai government held a state auction to offload spoiled rice for industrial use on Thursday, but results have yet to be announced. The world's second-biggest rice exporter sold 3.6 million tonnes of rice abroad between the start of the year and March 21, up 2.7 percent from the same period last year, the commerce ministry said. In India, meanwhile, 5 percent broken parboiled rice fell by $1 to $371-$376 a tonne this week amid sluggish demand. "At the current price level, we are not competitive. Due to the appreciating rupee, we couldn't reduce prices," said an exporter based at Kakinada in the southern state of Andhra Pradesh. The Indian rupee was trading close to its the highest level in nearly 17 months, reducing returns for exporters. The country's 2016/17 rice production is likely to rise by 4.3 percent to a record 108.86 million tonnes, the government has said.
India, the world's biggest rice exporter, mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East. "Paddy prices are more or less stable despite a drop in rice prices. This will cut exports in coming months," another Kakinada-based exporter said. Vietnam's 5 percent broken rice fell to $350-$355 a tonne FOB Saigon, from $355-$360 last week, as supply increased during the main harvest season.
"Global demand is not so strong as Thailand is still selling their inventory," said a trader based in Ho Chi Minh City. Vietnam rice shipments fell 26.5 percent last year to 4.8 million tonnes, while exports of the grain in the first two months of 2017 decreased 23.5 percent year on year to 738,000 tonnes, customs data showed.
Copyright Reuters, 2017