India's rice export prices extend gains as Thailand battles drought

India's rice export prices scaled a near four-month peak this week on increased demand from buyers in Africa, in anticipation of a further jump in rates in Asia as a persistent drought in Thailand squeezes supply.

Prices of India's 5-percent broken parboiled variety rose to their highest since the first week of October, around $369-$373 per tonne, from $366-$371 last week, also helped by a depreciation of the rupee.

Buyers from Africa have been making purchases fearing prices could rise further due to the drought in Thailand, said an exporter based at Kakinada in the southern state of Andhra Pradesh. Second largest exporter Thailand's benchmark 5-percent broken rice prices eased slightly to $432-$453 a tonne from $440-$460 last week, which was the highest level since June 2017.

Traders attributed the slight dip to the fluctuation in the baht, the domestic currency, which has softened by 4% so far this year after gaining more than 8% last year. "(However) The prices remain high due to concern over supply and that has put off many overseas buyers," a Bangkok-based trader said.

In Vietnam, markets reopened after the Lunar New Year holiday, with rates for 5-percent broken rice unchanged from two weeks ago at $345 a tonne. "There haven't been any transactions as traders have not returned to work after the Lunar New Year holiday," a trader based in the Mekong Delta province of An Giang said, adding activity should pick up from next week.

Farmers in the Mekong Delta said they have begun harvesting rice of the winter-spring crop, and that the harvest will peak late February. Vietnam's rice exports in January are forecast to fall 18.7% from a year earlier to 350,000 tonnes, official data showed on Wednesday.

Meanwhile, Bangladesh undertook measures to combat a spike in domestic prices. Seven monitoring committees have been formed to keep prices stable in the domestic markets, the country's food ministry said this week.