Rice prices in India climbed this week as strong demand from neighbouring Bangladesh counteracted fresh supplies from a new season crop in the world's top exporter. India's 5 percent broken parboiled rice prices rose by $4 per tonne to $406-$409.
"Bangladeshi demand has improved sentiment. That is nullifying the impact of higher supplies from the new crop," an exporter based in Kakinada in the southern state of Andhra Pradesh said. Bangladesh, which has emerged as a major importer this year after floods hit its crops, will import 150,000 tonnes of rice from India in a state deal priced at $440 a tonne, two food ministry officials said on Wednesday.
India's state-run National Agricultural Cooperative Marketing Federation (NAFED) will supply the rice within 60 days after signing the deal, which will take place soon, the officials said. Bangladesh has tried to secure supplies through India's state-run trading houses, which have floated tenders in the local market for procurement, the Kakinada-based exporter said.
The country had already sealed a deal with another state agency in India, PEC, to import 100,000 tonnes at $455 a tonne. Meanwhile, Thailand's benchmark 5 percent broken rice was quoted at $401-405 a tonne, free-on-board (FOB) Bangkok, up from $395-$400 last week.
Demand remained relatively quiet in the world's second-biggest rice exporter as supply remains more or less constant despite some losses due to floods, traders said. "I don't think prices of rice will rise any more substantially before the end of the year. Next year, however, we might see some government intervention," said a Bangkok-based trader.
The Ministry of Commerce has a target to export 11 million tonnes by the end of the year, and traders are optimistic the target could be reached within a plus-minus five percent range. Thailand's Ministry of Agriculture and Cooperatives and other agencies will hold the Thai Rice Festival 2017 in Bangkok from Dec. 15-20. Traders expect this to have a positive effect on demand.
In Vietnam, the rice market continued to be quiet even as stocks remained low. The country's 5 percent broken rice traded at $395 a tonne, free-on-board (FOB) Saigon, mostly unchanged from last week's $395-$398 range.
"We sold (5 percent broken rice) at $395 a tonne in a new private contract," a trader in Ho Chi Minh City said, but did not specify the buyer. Traders were unsure when there would be new government-to-government deals, but the delivery of previous state contracts brought Vietnam's rice shipments closer to the target of 5.6 million tonnes in 2017.
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