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Soft demand weighs on Thai rice rates, floods ravage crops in Bangladesh

Soft demand weighs on Thai rice rates, floods ravage crops in Bangladesh

A farmer harvests rice by a paddy field outside Hanoi, Vietnam on Jun 10, 2019. (Photo: Reuters/Kham)

Thai rice export prices fell this week on subdued demand and a slide in the domestic currency, while traders in Bangladesh awaited supply from neighboring India after heavy rains damaged crops.

Thailand's 5 per cent broken rice prices fell to US$430 to US$440 per tonne from US$450 to US$460 last week.

"Prices dropped because the baht was weaker, and will fluctuate along with the exchange rate as demand dropped," a Bangkok-based trader said.

The baht hit a more than five-year trough this week, translating into weaker export prices in US dollar terms

Supply remains ample with new crops expected late next month, another trader said.

In Bangladesh, floods washed away crops that would have yielded nearly 300,000 tonnes of rice, according to estimates from the agriculture ministry. The country has traditionally been a major producer but has been resorting to imports to cope with frequent natural calamities in recent years.

Last week, the food minister said Bangladesh will allow private traders to import rice.

Most of this rice would come from India by road due to competitive pricing, traders said.

Prices of top exporter India's 5 per cent broken parboiled variety were unchanged at US$357 to US$362 per tonne.

Indian exporters are not raising prices as the rupee depreciated to a record low, which is increasing their margin, said an exporter based at Kakinada, Andhra Pradesh.

India's ban on wheat exports has prompted rice traders to increase purchases.

Vietnam's 5 per cent broken rice prices were also unchanged at US$420 to US$425 per tonne.

"Demand is picking up as countries are increasing purchases amid concerns about further increase in global food prices," a Ho Chi Minh City-based trader said.

"Domestic paddy prices are edging up slightly from a week ago, and could put upward pressure on rice export prices over coming weeks," the trader added.

Traders said the summer-autumn harvest in the Mekong Delta will peak between mid-July and mid-August.

Source: Reuters/zl

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