Asia's top rice exporting hubs grapple with slack demand

Rice export markets in India and Thailand were pressured this week by slack demand as harvests poured in, continuing a slow trend in top Asian hubs this year, while Vietnam struggled with a growing stockpile exacerbated by Chinese import restrictions. In top exporter India, prices for the benchmark 5 percent broken parboiled variety were unchanged from last week at $380-$385 a tonne due to dwindling interest from Africa.
"For the last few weeks, export demand has been weak. African buyers are not active in the market," said an exporter based at Kakinada in the southern state of Andhra Pradesh. India's rice exports between April and December dropped 10.2 percent from a year earlier to 8.46 million tonnes, a government body said earlier this week. The second largest exporter Thailand saw prices for its 5 percent broken rice variety rising to $383-$405 a tonne, free on board Bangkok, from $382-$398 last week even as demand was muted.
The slight rise in prices was dictated by a stronger baht, while fresh supply entered the market, a trader in Bangkok said. Thailand continued to look to the Philippines for a possible deal, but the domestic currency's strength versus the dollar has impeded sales, traders said. The baht has gained more than four percent this year, translating into higher export prices in US dollars.
Also, Vietnamese rice was more competitively priced, another trader said. Prices of Vietnam's 5 percent broken rice were flat at $340, with a sizeable harvest and trade curbs from China causing growing stockpiles of fragrant rice in the country, reducing domestic prices. "Domestic paddy prices have also fallen sharply recently amid a large harvest that will peak at the end of this month," a Ho Chi Minh City-based trader said.
However, the government's decision to buy 200,000 tonnes of rice from local farmers has provided a firm base against a further fall in prices. Elsewhere, the Bangladeshi government is contemplating introducing newer rice varieties and technology in an effort to boost domestic production and ensure food security, agriculture ministry officials said. Bangladesh, the world's fourth largest producer with annual production of nearly 35 million tonnes, saw imports surge in 2017 after floods wrought havoc on local crops, prompting the country to take measures to shore up domestic reserves.