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India rice rates slip; tough Chinese rules dent Vietnam exports

Friday, December 07, 2018, 08:56 GMT+7
India rice rates slip; tough Chinese rules dent Vietnam exports
Women plant rice saplings at a paddy field in a village in Nagaon district, in the northeastern state of Assam, July 3, 2018. Photo: Reuters

BENGALURU - Rice export prices fell a the second consecutive week in India on a weakening rupee and slow demand, while strict inspections from top consumer China muted exports from Vietnam.

India’s 5 percent broken parboiled variety was quoted around $364-$368 per tonne this week, from $366-$370 the last week.

“Prices are down as traders are adjusting to the drop in the rupee. Demand is still weak,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The Indian rupee fell nearly 1 percent on Thursday to the lowest level in two weeks, increasing exporters margin from the overseas sales.

In an attempt to accelerate exports, the Indian government last month said it will give a 5 percent subsidy for non-basmati rice shipments for the four months to March 25, 2019.

In neighbouring Bangladesh, rice imports in July-November stood at 106,640 tonnes, the country’s food ministry data showed, after the government imposed a 28 percent tax on shipments to support its farmers after local production revived.

Meanwhile, in Vietnam, rates for 5 percent broken rice dipped to $400 a tonne from $408 last week as exports to China fell on stricter inspections and conditions on Vietnamese rice, traders said.

“Exports to China are almost frozen, no one dares to buy or sell. Some people who had their rice ready at the port now have to take them back because they fear the Chinese side will not take them,” a trader in Ho Chi Minh City said.

However, the fall in prices was limited due to tight supply at the end of a small crop season in Vietnam and orders from rice-scarce Philippines.

The next major crop harvest in the southeast-Asian nation, the winter-spring crop, is due next March.

In Thailand, benchmark 5 percent broken rice prices narrowed to $390-$393, free on board (FOB) Bangkok, from $380-$397 last week.

“Apart from the recent order from the Philippines, Thai rice exporters are not expecting any large order until early 2019,” a Bangkok-based rice trader said.

Traders attributed this week’s fluctuation in rice prices to the exchange rate. The Thai baht shed more than a quarter of a percent on Thursday, after rising for four previous sessions.

“Some exporters are still talking about a possible deal to markets like Japan and Indonesia, but so far things are quiet and will likely remain this way until January,” said another Bangkok-based trader.

Reuters

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