January 17, 2020 / 1:35 AM / a month ago

RPT-Asia Rice-Thai rates climb to near 2-year high as drought persists

(Repeats item first published on Thursday with no changes to text)

* Possible deal from Cotonou boosts India market - dealer

* Vietnam prices slip to $345 a tonne

* Philippine buyers eye upcoming Vietnamese harvest

* Thai exports forecast to drop to 7-year low in 2020

By Shreyansi Singh

BENGALURU, Jan 16 (Reuters) - Thai rice export prices scaled a more than 20-month peak this week as a persistent drought heightened supply concerns, while improved demand from African countries drove an uptick in rates for the Indian variety.

Thailand’s benchmark 5% broken rice RI-THBKN5-P1 prices rose to their highest since late April 2018 at $435-$445, compared with $425-$435 last week.

Risks to supply from the ongoing drought, coupled with a strong baht have supported Thai prices, traders said.

Exports from Thailand, the world’s second largest rice exporter after India, are forecast to drop to their lowest in seven years, at 7.5 million tonnes, in 2020, the country’s rice exporters group said.

The baht, Asia’s strongest-performing currency in 2019, is currently trading near a more than six-year high.

In India, 5% broken parboiled rice RI-INBKN5-P1 rose to $364-$368 per tonne from $362-$366 last week, on increased demand from buyers in Africa.

“Rice demand has finally seen some uptick as the news of a Cotonou (Benin) order opening soon has seen some trade happening,” said Nitin Gupta, vice president for Olam India’s rice business.

In neighbouring Bangladesh, the state is providing a subsidy to reduce production costs and boost domestic output, Agriculture Minister Abdur Razzak told Reuters on Thursday.

Dhaka has failed to clinch any overseas deals since a long-standing export ban on the common variety was lifted in May, as its rice competes with lower-prices for the grain from India and Thailand.

Meanwhile in Vietnam, rates for 5% broken rice RI-VNBKN5-P1 fell to $345 a tonne on Thursday from $355 a week earlier.

“Buyers have slowed their purchases to wait for fresh rice from the upcoming winter-spring harvest available from next month,” said a trader based in the Mekong Delta province of An Giang.

The trader also said multiple buyers from the Philippines had shown interest in the winter-spring rice.

Vietnamese customs data released earlier this week showed Vietnam exported 6.4 million tonnes of rice in 2019, up 4.2% from 2018.

Earlier this week, a Malaysian buyer purchased 40,000 tonnes of Vietnamese 5% broken rice for around $340 per tonne, to be delivered in January and February, traders said. (Reporting by Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka, Khanh Vu in Hanoi and Patpicha Tanakasempipat in Bangkok; Editing by Arpan Varghese and Alex Richardson)

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