MUMBAI/HANOI (Reuters) - Rice prices in India fell due to ample supply and recent slide in the rupee, while the Thai and Vietnamese markets remained subdued in the first week of the new year, traders said on Wednesday.
In India, the world’s biggest rice exporter, 5-percent broken parboiled rice dropped $2 this week to $341 to $345 per tonne as a cash crunch in December prevented farmers from offloading a summer-sown crop, and as the rupee depreciated against the dollar.
In November, the Indian government scrapped 500-rupee and 1,000-rupee bills to crack down on corruption. The move disrupted trading of farm commodities such as cotton, rice and soybean as most farmers prefer payments in cash.
India’s summer-sown rice output is seen at a record 93.88 million tonnes in the crop year to June 2017, 2.81 percent higher than last year, as a good monsoon help boost yields, the farm ministry said.
“Supply pressure has been building up... Exports demand is improving, but it is not sufficient to counter supply pressure,” said an exporter based at Kakinada in southern Indian state of Andhra Pradesh.
India mainly exports non-basmati rice to African countries and premier basmati rice to the Middle East. India exported 3.79 million tonnes of rice between April and October, down 3.1 percent from a year ago.
In Thailand, the world’s second-biggest rice exporter, 5-percent broken rice stood pat at $355-$360 a tonne, free-on-board (FOB) Bangkok, unchanged from last week.
“Prices at the start of the year are still the same; there isn’t any change due to the long holiday,” said Kiattisak Kallayasirivat, a Bangkok-based director at Ascend Commodities-SA.
“If there are buyers from overseas, the price will move up as rice production starts to thin out,” Kiattisak said, expecting purchase orders from the Philippines and Africa to move prices up by $4 to $5 a tonne before the month-end.
Traders in Vietnam, the world’s third-biggest exporter of the grain, quoted 5-percent broken rice at $335-$345 a tonne, free-on-board basis, the same as a week ago.
“Buyers are still on a holiday mood... We may not have any new offer until next week,” said a Vietnamese trader.
Last year, Vietnam’s rice exports fell an estimated 25.8 percent from 2015 to 4.88 million tonnes, the farm ministry said.
Additional reporting by Pairat Temphairojana in Bangkok; Editing by Sherry Jacob-Phillips