Rice prices in India were steady this week as gains in the rupee kept overseas demand muted in the top exporter, though flood-hit Bangladesh looked to procure more of the staple grain from its neighbour. Bangladesh, which has emerged as a major importer this year to shore up depleted stocks, had already sealed a deal with India to import 100,000 tonnes of rice at $455 a tonne.
"We are in talks with India to buy more rice," a Bangladesh food ministry official said. The country's state grains buyer has issued a local tender to buy 100,000 tonnes of parboiled rice to be sourced internationally. The tender will close on December 14 and the rice is to be shipped within 30 days of signing the deal.
India's 5 percent broken parboiled rice was steady this week at $402-$405 a tonne as demand remained subdued amid a rise in the local currency to two-month peaks. "Export demand was weak from all destinations," said one exporter based in the western city of Pune. "Some buyers were seeking supplies at a lower price, but we couldn't lower prices due to the appreciating rupee." The rupee has risen about 5 percent this year, reducing exporters' returns.
Paddy rice supply from the new-season crop has started in southern states and could rise next month, dealers said. "Paddy prices in the domestic market could fall next month once supplies pick up," said an exporter based in Kakinada in the southern state of Andhra Pradesh. In Thailand, benchmark 5 percent broken rice rose to $395-$400 a tonne free on board (FOB) Bangkok, from $385-$398 last week, because of a stronger baht, traders said.
The Ministry of Agriculture and Cooperatives and other agencies are to hold the Thai Rice Festival 2017 in Bangkok from December 15-20. "The rice festival will help foreigners increase their knowledge about Thai rice, which may have a positive effect on demand," one Bangkok-based rice trader said. Rates could rise by up to $10 next month because the government could announce subsidies, traders said.
Meanwhile, Vietnam's benchmark 5 percent broken rice fell to $395-$398 a tonne free-on-board (FOB) Saigon, from $400 last week, though supply remained low. "Prices eased, but my customers did not want to buy yet, as Vietnam's price is higher than other exporters," said one trader, attributing the price dip to a lack of new export contracts. Another trader said the market was quiet, with trading done only on previously signed contracts. Vietnam's rice shipment in November was estimated to have dropped month on month to 420,000 tonnes.
Copyright Reuters, 2017