ASIA RICE-High supply, weak rupee push India rates to near 2-year low

By Reuters

By Sherin Elizabeth Varghese

India’s rice export prices slid to a near two-year low this week, pressured by a weak rupee and rising supplies amid subdued demand, while export markets in other key Asian hubs remained quiet.

India’s 5% broken parboiled variety was quoted at $382-$389 per ton, down from the last week’s $384-$391. Indian 5% broken white rice was priced at $375 to $381 per ton this week.

“Export prices are coming down because of falling rupee. Demand is still subdued,” said a New Delhi-based dealer with a global trade house. Global rice prices, which have tumbled to multi-year lows, are unlikely to fall further, but bulging Indian stockpiles and a bumper Asian crop will cap any rebound this year, industry executives say.

Thailand’s 5% broken rice is quoted between $405 to $410 per ton down from $410 last week with traders attributing the price drop to exchange rate fluctuations, rather than demand, which has been quiet.

“It’s very quiet this year. Indonesia and the Philippines, which used to buy a lot, have enough production,” said a Bangkok-based trader.

Another trader said customers were waiting for prices, but there was still some activity.

“Demand is not that quiet, but it’s not so flashy,” the trader said, adding that supply was good and another crop will be released in July.

Vietnam’s 5% broken rice was offered at $397 per metric ton on Thursday, unchanged a week ago, according to Vietnam Food Association.

“External demand remains weak and this has also pushed down domestic paddy prices amid the summer-autumn harvest,” a trader based in Ho Chi Minh City said.

Traders said prices of fresh unhusked paddy in the Mekong Delta range from 5,200 dong to 6,800 dong per kilogram, down from 5,400-7,200 dong a week ago.

Bangladesh’s Aush rice output fell for a fourth straight year to 2.7 million tonnes, down from 2.9 million tonnes last year, due to erratic weather and reduced acreage. Experts warn the sustained drop could pose long-term food security risks. (Reporting by Sherin Elizabeth Varghese in Bengaluru, Rajendra Jadhav in Mumbai, Chayut Setboonsarng in Bangkok, Khanh Vu in Hanoi and Ruma Paul in Dhaka; Editing by Shailesh Kuber)

This article has been republished from The Livemint.