Asia Rice-India, Vietnam attract fresh buying; supply weighs on Thai market

Rice export prices rose for both the Indian and Vietnamese varieties this week, bolstered by a pick up in demand, while fresh supply and a lack of interest from overseas buyers weighed on Thai rice prices.

Prices for top exporter India's benchmark 5 percent broken parboiled variety rose for the first time in four weeks to $383-$386 per tonne from last week's $378-$383 range.

"Demand is good, especially in containers from west Africa market," Nitin Gupta, vice president, rice business at Olam India, said.

Also supporting the Indian variety, the rupee was at its firmest since the start of the year, slashing exporters' returns from foreign sales and prompting them to raise prices.

Vietnam, the world's third-largest shipper of the grain after Thailand, also saw prices for its 5 percent broken rice variety gain to $355 a tonne from $345 last week.

"The government said it would buy rice from farmers for stockpiling, and demand is also seen rising," a trader based in Ho Chi Minh City said.

"However, increasing supplies from an ongoing harvest will likely keep prices from rising further."

The winter-spring harvest in the Mekong Delta will peak at the end of this month.

The country's central bank earlier this week asked local commercial banks to lower their lending rates to 6 percent for short-term loans to farmers, rice processors and exporters to help absorb the winter-spring output.

"Malaysia is buying, and we have also been approached by customers from China and the Philippines, who are seeking to buy Vietnamese rice," another trader said.

In Thailand, benchmark 5 percent broken rice prices eased to $380-$390, free on board Bangkok, from last week's $383-$398.

Fresh supply and the weakening of the domestic currency  contributed to the price dip, while demand remained flat, traders said.

"There are now talks that there could be a drought during this dry season and that could impact supply next quarter," a trader said.

"Exporters are still looking to the Philippines for a possible deal, but so far things have remained quiet."

Meanwhile, summer rice output in Bangladesh is expected to hit 19.62 million tonnes from 19.57 million tonnes last year, Mizanur Rahman, a senior official of Department of Agriculture Extension, told Reuters.

The summer-sown crop, also known as 'Boro', usually contributes more than half of Bangladesh's typical annual rice production of around 35 million tonnes.

Bangladesh, the world's fourth largest producer, saw imports surge in 2017 after floods wrought havoc on local crops, prompting the country to act to shore up domestic reserves.