Indian rice prices climb on higher demand

MUMBAI/HANOI /BANGKOK/DHAKA: Prices of rice shipped from top exporter India edged up this week on an uptick in overseas demand and as aggressive government buying of paddy to encourage higher domestic output jacked up traders’ procurement costs.

India’s 5% broken parboiled variety rates rose to $373-$378 per tonne from last week’s $370-$375, amid higher export demand as well. “The government has been buying new season paddy crop at revised higher prices. Exporters need to pay more to secure supplies,” said an exporter based in Kakinada, Andhra Pradesh.

India raised the price at which it will buy the new-season common paddy from farmers by 5.2%, the biggest increase in five years, as New Delhi encourages farmers to boost acreage and output.

Meanwhile, output from neighbouring Bangladesh’s second-biggest rain-fed rice crop could hit 17 million tonnes, exceeding the target of 16 million tonnes, as farmers raised acreage to cash in on higher prices, a senior agriculture ministry official said.

Bangladesh has been struggling to shore up stocks following widespread flooding. Prices of Thailand’s 5% broken variety scaled the highest since early October at $410-$425 per tonne. Traders attributed the increase to gains in the baht, which decreases exporters’ margins from overseas sales and prompts them to hike prices.

“Global markets are slowing because countries have stocked up on rice from their experience during the pandemic and war between Russia and Ukraine, which led to hoarding,” said a Bangkok-based trader.

Vietnam’s 5% broken rice prices were unchanged at $425-$430 per tonne, free-on-board. “Demand for Vietnamese rice is higher than previously anticipated and I think this year’s exports will exceed the official target of 6.3-6.5 million tonnes,” a Ho Chi Minh City- based trader said.

Date: 18-Nov-2022