Rupee slide pushes India rice rates to 7-week low, Vietnamese exports dip

By Karthika Suresh Namboothiri
A worker uses his feet to spread rice for drying at a rice mill on the outskirts of Kolkata

By Karthika Suresh Namboothiri

BENGALURU (Reuters) - A depreciating rupee pushed export prices of rice from India to their lowest in seven weeks on Thursday despite healthy demand from African countries, while lower purchases from Philippines weighed on rates for the Vietnamese grain.

Top exporter India's 5 percent broken parboiled variety was quoted around $372-$375 per tonne this week, down from $374-$377 a week ago.

"A falling rupee has been allowing us to lower export prices. Demand has also been improving," said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The Indian rupee on Thursday fell to its lowest in over eight months, raising exporters' margins.

Farmers have planted rice on 30.14 million hectares as of Aug. 16, against 33.84 million hectares at the same time last year, government data showed.

India's rice exports in April-June dived 28.2% from a year ago to 2.35 million tonnes. In Vietnam, rates for 5% broken rice eased to $335-$340 a tonne from $335-$345 last week on weak demand. 

Buyers from Philippines have reduced their purchases from Vietnam while awaiting a possible curb on rice imports to support local farmers, a Ho Chi Minh City-based trader said.

Preliminary data showed only 23,000 tonnes of rice is scheduled to be loaded at Ho Chi Minh City ports during September 1-10, bound for West Africa. 

Meanwhile, Thailand's benchmark 5-percent broken rice prices were quoted at $415-$430 a tonne on Thursday, slightly higher than $415-$425 last week.

Concern over shrinking supply due to the worst drought in a decade, has pushed up Thai prices and prompted the government to introduce new subsidies to help farmers during the main harvest seasons for the remainder of this year.

"The new subsidies will drive the export prices up in the medium term because the market will now gain confidence that domestic price will not go down since the prices are now guaranteed by the government," a Bangkok-based trader said.

Overseas demand for Thai rice is expected to remain unchanged with prices affected by fluctuations in the exchange rate between the US dollar and baht, Asia's best performing currency so far this year.

Bangladesh, still recovering from a crop-damaging flood in July, will have its government help affected farmers and provide free fertilizers and seeds for the next crop season, the country's Agriculture Minister Abdur Razzaque said.

Floods washed away crops that would have yielded nearly 400,000 tonnes of rice, agriculture ministry estimates show.

(Reporting by Khanh Vu in Hanoi, Panu Wongcha-um in Bangkok, Ruma Paul in Dhaka and Rajendra Jadhav in Mumbai; editing by Arpan Varghese and David Evans)