By Eileen Soreng

BENGALURU (Reuters) - 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 on board 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.

Meanwhile, neighbouring Bangladesh will procure 400,000 tonnes of paddy at 26,000 taka or $307.73 a tonne during the current harvesting season to support local farmers reeling under declining domestic prices, food minister Sadhan Chandra Majumdar said.

Market insiders, however, said the move would not benefit most growers in dire need of cash, since they were compelled to sell their crop at much cheaper rates to millers or middlemen.

Bangladesh has also been unable to clinch deals since its ban on rice exports was lifted in May.

In Vietnam, rates for 5% broken rice rose to $335-$340 a tonne from $330-$335 last week, as traders looked to increase profits, merchants said.

"Demand for 5% broken rice has been lacklustre this week," a trader based in Ho Chi Minh City said. "We have received orders for fragrant rice only."

Preliminary data showed nearly 60,000 tonnes of rice is to be loaded at Ho Chi Minh City ports during the July 1-16 period, compared with 311,700 tonnes in June, another trader said.

Most of the new shipments were headed to Iraq, Malaysia and West Africa, the trader added.

($1=84.49 taka)

(Reporting by Panu Wongcha-um in Bangkok, Khanh Vu in Hanoi, Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka; Editing by Kirsten Donovan)