Indian rice prices up on higher demand and lower supplies

Asian rice export prices were mixed on Wednesday, with prices in top exporter India edging up on higher demand and lower supplies, while Vietnamese prices fell to near the lowest in five months on a lack of buying interest, traders said. India's 5 percent broken parboiled rice rose by $4 a tonne this week to $382-$392 a tonne, free on board (FOB), on higher demand and dwindling supplies.
"Demand is improving. Prices could rise by another $15 (per tonne) in the next few weeks," said M. Adishankar, executive director at Sri Lalitha, a leading rice exporter based in the southern Indian state of Andhra Pradesh. India's rice exports this year are forecast to fall 9.7 percent from 2015 to 10 million tonnes, the UN Food and Agriculture Organization (FAO) said in a report on Monday.
Overall, the FAO forecast world rice trade to drop 1.5 percent from 2015 to 43.9 million tonnes, revising down from 44.9 million tonnes in its April forecast. The lower projection reflected import reductions by buyers such as Bangladesh, China, the Philippines and Sri Lanka due to ample stocks or tightened border protection, the FAO said.
Rice imports this year by China, the world's top importer of the grain, are forecast to ease 4 percent from 2015 to 6.8 million tonnes, as "heightened border surveillance has slowed inflows from Myanmar and Vietnam", the FAO said. In Vietnam, the world's third-largest exporter after India and Thailand, prices for its 5 percent broken rice for summer-autumn grain widened to $357-$365 a tonne on Wednesday, FOB basis, from $360-$365 a week ago, traders said.
The variety stood at $355 a tonne on Monday, on par with prices on February 24, 2016, based on Thomson Reuters data. "Rice quality is not good so nobody is buying," a Vietnamese trader in Ho Chi Minh City said, referring to newly harvested grain from Mekong Delta's summer-autumn crop. Traders said most African buyers have now turned to Thailand, while top importer China has not returned for new purchases. The Thai rice market is closed on Wednesday for a holiday. Its 5-percent broken rice stood unchanged at $420-$435 a tonne, FOB basis, for all of last week. India, Thailand and Vietnam together account for around 60 percent of global rice trade.