Rice prices in India and Thailand, the world's top two exporters of the grain, fell this week on low export demand, traders said on Thursday. India's 5 percent broken parboiled rice prices eased by $2 per tonne to $407 to $410 per tonne.
"Demand from African countries is weak. Bangladesh is not buying from India as expected earlier. These factors are putting pressure on prices," said an exporter based in Kakinada in the southern state of Andhra Pradesh. India's non-basmati rice exports are likely to slow over the next few months as its shipments have become too expensive on the world market due to a rally in the rupee and an increase in local paddy prices.
In Thailand benchmark 5-percent broken rice was quoted at $376-382 a tonne, free-on-board (FOB) Bangkok, down from $385-387 a tonne last week. Thai traders say demand is sluggish overall and the incoming off-season white rice grain, which is being harvested from mid-August through to September, has led to the slight drop in prices.
"Prices are unlikely to fluctuate much until the end of August with incoming grains during this period", a Bangkok-based rice trader said. Rice exporters in Thailand continue to look to fresh demands from markets like Bangladesh and the Philippines but the lack of major deals on the horizon has contributed to lower prices.
"Many rice mills in the country are still clearing their rice stocks and with no new overseas demands the price has dropped slightly," another Thai rice trader said. In Vietnam benchmark 5 percent broken rice was unchanged at $395-$405 a tonne this week, FOB Saigon.
Traders have attributed the lack of price fluctuation on low demand, as harvesting began for the summer-autumn crops amid early seasonal flooding. "Rice output will be lower for sure because floods came earlier in the Mekong Delta. Some of the rice was submerged before it could be harvested. But prices may not rise if demand stays low," a trader in Ho Chi Minh City said.
Another trader said prices could rise on low supply after harvesting is completed in mid-September. "Farmers will hold back rice to wait for a desired price," he added. Meanwhile Bangladesh was looking at importing more rice from India, and is in talks with Cambodia, Myanmar, and Thailand as it looks to replenish stocks.
Bangladesh, the world's fourth-biggest rice producer, has emerged as a major importer of the grain this year following flash floods in April that hit output. It plans to slash the duty on rice imports to 2 percent from 10 percent to solve a food shortage, officials said, the second cut in less than two months.
"It will help traders to import more rice, especially from neighbouring India," a senior food ministry official said, who asked not to be named. Bangladesh has bought 250,000 tonnes of rice from Vietnam in a state-to-state deal and is issuing a series of invitations to tender after its initial plans to import the grain from Thailand and India suffered a setback over high prices.
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