India rice prices hit multi-month lows as buyers defer purchases
India’s rice exports in August fell 29% year-on-year to 644, 249 tonnes due to weak demand from African countries for non-basmati rice.Updated: Oct 17, 2019 20:04 IST
Demand for rice from top exporter India was subdued as buyers delayed purchases despite a dip in prices to four-month lows this week, while restricted supply kept rates for the Vietnamese variety at their highest in two months.
Prices for India’s 5 percent broken parboiled variety fell to $365-$370 per tonne from $368-$372 a week ago.
“Asian and African buyers are not in a hurry. They are postponing buying anticipating a further fall in prices,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.
India’s rice exports in August fell 29% year-on-year to 644,249 tonnes due to weak demand from African countries for non-basmati rice, among other factors. Its rice production from the summer-sown crop in 2019 is expected to drop 1.7% from a year ago to 100.35 million tonnes.
Meanwhile, rates for Vietnam’s benchmark 5% broken rice were unchanged from last week’s $350 a tonne, a two-month high.
“Demand is weak, but low supplies have helped keep prices from falling,” a trader based in the Mekong Delta province of An Giang said.
However, there were concerns that a move by the Philippines -- Vietnam’s largest rice export market accounting for 36% of total shipments -- to reduce imports could further hit the Vietnamese market, another trader in Ho Chi Minh city said.
Sluggish demand pushed export prices for Vietnamese rice to their lowest in nearly 12 years, at $325 per tonne, in September.
A global economic slowdown has also been one of the factors weighing on demand, Vietnam’s Deputy Minister of Agriculture and Rural Development Phung Duc Tien told reporters this week.
In second biggest exporter Thailand, which has also been grappling with slow demand and a strong baht, benchmark 5-% broken rice prices narrowed to $395-$400 a tonne on Thursday from $396-$400 last week.
“Demand has been very small because of our high prices and little else has changed,” a Bangkok-based trader said.
Prices for the Thai variety have remained higher than competitors due to the firm currency.
“The continued strength of the baht has prevented exporters quoting lower prices as the market anticipates further strengthening of the currency,” another trader said.
Meanwhile, farmers in Bangladesh, who have been struggling with low prices and high harvesting costs, will receive a subsidy of 30 billion taka ($354 million) to buy modern agro-tools in an effort to minimise production costs and boost domestic output, Agriculture Minister Abdur Razzaque said.
Dhaka has failed to clinch overseas deals for its rice since a long-standing export ban was lifted in May, losing out to cheaper grain from India and Thailand.