Asia rice: Flood-hit BD races to restock as strong dollar hits imports

BENGALURU/DHAKA/ MUMBAI/BANGKOK /HANOI: A strong dollar slowed imports to flood-hit Bangladesh this week as it grappled with soaring domestic rates, while prices of rice exported from Thailand and Vietnam fell as supplies increased.

“Though traders have started to import, the volume is not significant. Sliding local currency against the dollar is discouraging them,” a Dhaka-based trader said. Bangladesh started importing rice from neighbouring India after the government had allowed private traders to import 1 million tonnes of rice and slashed import duties after floods destroyed crops.

The Bangladesh government also sought a letter of credit from the central bank, with rice import data, to tide over the supply situation, officials said. Rates for India’s 5% broken parboiled variety were unchanged at $362-$368 per tonne, as weak demand offset supply concerns.

“Paddy sowing is still lagging in key eastern states. Even if it picks up in coming weeks, yields are likely to be lower than normal,” said an exporter from the state of Andhra Pradesh in India.

Rice farmers have planted 17 million hectares so far this season, India’s farm ministry data showed, down 19% from the same period last year, amid scanty rainfall.

Thailand’s 5% broken rice prices fell to $400 per tonne from last week’s $420. “The decline is due to a drop in FOB (free-on-board) prices. Demand should come in, with exports exceeding 6 million tonnes amid the weaker baht,” a Bangkok-based trader said, adding good rains have increased supply.

Vietnam’s 5% broken rice prices fell to $395-$413 from $415-$420 last week. “Demand is weak, while domestic supplies are strong thanks to the summer-autumn harvest,” a Ho Chi Minh City-based trader said.

“Prices won’t likely recover in the short term since Thai and Indian rates remain low,” the trader said. Data showed 269,775 tonnes to be loaded at Ho Chi Minh City port in July, mostly bound for the Philippines and Africa.