BENGALURU - Rice export prices slipped in India as the rupee weakened and demand waned, with a recent jump in prices for the top exporter's variety prompting buyers to turn to other markets such as Vietnam, where rates fell ahead of a major harvest.
India's 5 percent broken parboiled variety eased to $379-$384 per tonne this week from the $382-$387 range last week.
"Demand is still weak due to higher prices," said an exporter based in Kakinada in the southern state of Andhra Pradesh, adding that despite the fall, prevailing high rates were prompting buyers to look at other markets, such as Vietnam.
The Indian rupee hit a month low on Thursday, increasing exporters' margins from overseas sales and thereby prompting a reduction in prices.
Export prices in India had shot up after the central state of Chhattisgarh, a leading rice producer, raised minimum paddy buying prices to 2,500 rupees per 100 kg from 1,750 rupees.
In neighbouring Bangladesh, an increase in domestic rates for rice could prompt the government to cut the import duty on the staple grain, traders said.
The south Asian country, which emerged as a major importer of the grain in 2017 after floods destroyed crops, imposed a 28 percent duty in June last year to support its farmers after local production revived.
In Vietnam, rates for 5 percent broken rice fell to $355-$360 a tonne from $370-$375 last week ahead of the country's largest harvest, expected to begin in two weeks.
"Indonesia's state food procurement agency's recent announcement that it may not import rice this year has also weighed on prices," a Ho Chi Minh City-based source said.
"We are negotiating a deal for around 10,000 tonnes to be delivered late February, and we are stuck at pricing. We're asking for $360 and they are offering $345," the trader said, adding that the shipment would be bound for Africa."
Another trader said China's move to limit rice shipments from Vietnam may not be as bad as some traders initially feared.
"It's only the beginning of the year now and importing countries can change their import plans, especially when hit by natural disasters," the trader said.
In second biggest exporter Thailand, prices of the benchmark 5 percent broken variety widened to $385-$400, free on board Bangkok, from $390-$400 the previous week, mostly due to fluctuations in the value of the domestic currency.
"Demand remains flat, but some exporters are starting to talk about possible orders from the Philippines," a Bangkok-based trader said.
The Thai market is likely to see additional supplies flowing in towards the end of this month, from the seasonal harvest, and this could in turn move prices, another trader in Bangkok said.