Prices of rice export in India went down this week to the lowest in almost seven months because demand continued to decline and rates for Vietnamese rice plunged on expected increase in stockpiles after the summer reap.
India's 5% broken parboiled variety was quoted around $362 to $365 a tonne this week, which was low from last week's $371 to $374 for a 6th weekly decline as it came under pressure from depreciation in the rupee.
Vice president for Olam India's rice business Nitin Gupta said, “Demand has dried up in the West African market as they are sitting on high inventories”. Exporters said belligerent selling of old inventories by China to African buyers is also weighing on prices.
Private weather forecaster Skymet told that the rice-growing southern peninsula of India may receive 95% rainfall during the impending monsoon.
In the meantime, neighbouring Bangladesh is mulling to export surplus rice to protect growers' interests, food minister Sadhan Chandra Majumdar told, amid farmers’ mounting frustration over low rice prices.
Farmers are saying that 40 kilogram of paddy is sold at around 500 taka or $5.90 against an average production cost of 700 taka. On the other hand, the harvesting of the summer rice crop, called Boro, is in full swing.
Moreover in Vietnam, costs for 5% broken rice dropped to $355 / tonne last week as compared to $365 a week before, on hopes that stockpiles will rise when the early harvest of the summer-autumn crop starts late this month.
A senior official with the Vietnam Food Association informed Reuters that “Rice exports from Vietnam this year are estimated to stay flat on last year but will slowly go down as the rice growing region is shrinking to give way to growing fruit trees”.
The official added that “Though Chinese importers have reopened the door to Vietnamese rice, it is not yet easy for Vietnamese exporters to increase their sales to Beijing as numerous technical barriers are still in place”.
In the meantime, Thailand's benchmark 5% broken rice rates remain unchanged at $385 to $400 / tonne free on board (FOB) Bangkok.
However Thai traders said they were concerned that local rice, presently priced higher than Vietnamese & Indian rice, is also losing competitiveness as the Thai baht is the strongest-performing currency in Asia this year. The Thai Rice Exporters Association stood by its January estimate for Thailand to export 9.5mt this year, plunging from last year's 11mt because of the strong baht.
Chutima Bunyapraphasara, Thailand's deputy commerce minister said that the country had exported 3.2mt of rice in the first 4 months of the year.
