Rice prices climbed this week in India due to an appreciation in the local currency and healthy demand, while rates in Thailand rose on lower supplies. India's 5 percent broken parboiled rice prices rose by $3 to $402-$405 per tonne. "The rupee has appreciated significantly in the last few days. We have to adjust prices accordingly," said an exporter based in Kakinada in the southern state of Andhra Pradesh.
"Demand is good from Asian countries. African buying is still less than usual." The rupee has risen more than 4 percent so far in 2017, reducing exporters' returns. Paddy rice supply from the new season crop has started in southern states of India, the world's biggest exporter, and is expected to rise in the coming weeks, dealers said. In Thailand, benchmark 5 percent broken rice rose to $385-$398 a tonne, free-on-board (FOB) Bangkok, from $380-$387 last week.
"Supply has been quite low as there were crop losses due to floods. Thai rice prices are now really high and we can't compete with other countries," said a Bangkok-based trader. Floods earlier this year affected seven of 77 provinces in Thailand, and over 480,000 hectares (1.2 million acres) of agricultural land were hit.
The supply situation has been exacerbated by a recent government move to extend a deadline, from the end of this year to an unspecified date next year, to offload 2 million tonnes of rice from state stockpiles, traders said. "As currently supply is low and prices high, the government should have released all rice stocks as per the usual deadline rather than extending it," the trader said.
Meanwhile, floods in Bangladesh, traditionally the world's fourth biggest rice producer, have caused domestic output to drop by 920,000 tonnes in the year to June from a year earlier, the latest government data shows. Despite deals with several rice exporting countries such as Vietnam, Bangladesh is still struggling to build its reserves, with its deal with Cambodia for 250,000 tonnes being scrapped last week over a delay in shipments.
In Vietnam, traders quoted benchmark 5 percent broken rice at $400 a tonne, free-on-board (FOB) Saigon, little changed from the $400-$405 levels last week. The high prices have made it difficult to secure new deals, a trader in Ho Chi Minh City said. Low supply prevailed after the recent autumn-winter season wrapped up, but produce has mostly gone to serve domestic needs. However, sowing has started for winter-spring crops, one of Vietnam's two major rice seasons. The domestic market would stay quiet until the new crop is harvested in March, traders said.