Strong currency props up Indian rice rates, wider demand subdued

Rice export prices in India extended gains this week helped by a stronger rupee, while expectations of fresh supplies entering the market weighed on Thai rates along with muted demand across major paddy-growing countries.

Thailand’s benchmark 5-percent broken rice prices were quoted at $390-$404 a tonne on Thursday, free onboard Bangkok (FOB), down from $395-$413 last week.

“The new crop is expected to start entering the market next month and this has driven the price down a little but the strong baht also means that the export price remains strong overall,” a Bangkok-based rice trader said.

Demand for Thai rice has remained flat as the local currency strengthened, traders added.

Thailand’s rice exports fell by 12% in the first half of 2019, hurt by the stronger baht, and will likely fall short of this year’s target of 9.5 million tonnes, an exporter group said on Wednesday.

Thailand shipped 4.2 million tonnes of rice between January and June with orders in the last two months falling to as low as 600,000 tonnes per month, according to the Thai Rice Exporters Association.

For top rice exporter India, prices of the 5 percent broken parboiled variety were quoted around $374-$377 per tonne this week, up from last week’s $371-$374.

The Indian rupee on Thursday rose to its highest level in 11-months, trimming exporters returns from overseas sales.

“For white rice demand is negligible. There’s modest demand for parboiled from African buyers,” said B V Krishna Rao, president of the Rice Exporters Association (REA).

The Indian government has also raised the price at which it will buy new-season common rice varieties from local farmers by 3.7 percent.

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