Steady demand from Bangladesh raised rice prices in India this week but the flood-ravaged country is unlikely to go beyond its initial export targets for the year to shore up depleted stocks. Bangladesh will stick to its earlier plans to import up to 1.5 million tonnes of rice in the year to June 2018, a food ministry official said on Thursday.
The world's fourth-biggest rice producer stepped its rice up purchases this year to boost stocks in a bid to combat high domestic rates. In August, it cut a duty on imports of the grain for the second time in two months. However, the measure was not being viewed as a long-term policy by Bangladesh. Commerce Minister Tofael Ahmed told parliament on Tuesday that the import duty cut and bulk rice imports were temporary. "The government will protect farmers' interests," the minister said.
The lower import duty has, however, prompted purchases by private dealers, with most of the deals being struck with neighbouring India. Demand from Bangladesh and limited local supplies pushed up India's 5 percent broken parboiled rice prices by $3 to $413-$416 a tonne. "Limited supplies are available for exports at higher price. Until new season crop starts, prices will remain firm," said an exporter based in Kakinada in the southern state of Andhra Pradesh.
Indian farmers had planted 37.15 million hectares of paddy rice as of September 8, slightly lower than 37.69 million hectares a year ago. India's non-basmati rice exports are likely to slow over the next few months. Thai benchmark 5 percent broken rice was quoted at $380-$390 a tonne, free-on-board (FOB) Bangkok, up from $380-$385 last week amid a stronger baht.
"It looks like there's going to be a rising trend and the price might increase again next week because we're approaching the end of the harvest season," said a rice trader in Bangkok. A trading house based in Thailand struck a deal with Bangladesh's state grains buyer to export 50,000 tonnes of rice. "Apart from this, there are no other deals with other countries in the making," said another trader.
In Vietnam, the benchmark 5 percent broken rice fell to $378-$385 a tonne this week from $385-$390 last week, FOB Saigon. Trade was slow due to low demand from major importers, traders said, adding that output was likely to be lower from the minor autumn-winter crops. "Crop yields could decrease due to late planting and effects of August flooding in Mekong Delta," a trader in Ho Chi Minh city said.