Rice prices dipped this week in the Asian hubs of India and Thailand, but prospects of new deals with flood-ravaged Bangladesh could reinvigorate sluggish markets for the staple grain amongst top exporters in the region.
Bangladesh, which has emerged as a major importer this year to try to shore up stocks in the country, is looking to buy more rice in government-to-government deals to combat high domestic prices, a food ministry official said, said a report by www.moneycontrol.com.
"We can buy from India, Thailand and Vietnam," he said, without elaborating.
The lowest offer in the tender from Bangladesh's state grains buyer to purchase 50,000 tonnes of rice which closed on Thursday was USD 427.33 a tonne, on a cost, insurance and freight basis, liner out from a domestic trader.
In Thailand, benchmark 5-percent broken rice eased to USD 375-USD 385 a tonne, free-on-board (FOB) Bangkok, from the USD 390-USD 396 level last week on lower demand from overseas amid a strong local currency.
"Since the value of the baht remains relatively strong and stable, we can't compete with other rice exporting countries," a Bangkok-based rice trader said.
But there continues to be some demand for Thai rice from Bangladesh, the trader also said.
"We expect Bangladesh to import a total of 500,000 tonnes due to the flooding crisis. So far, they have already imported around 250,000 tonnes," the trader said.
Thai prices could decline further and demand is likely to witness a seasonal slowdown toward the end of the year.
India's 5 per cent broken parboiled rice prices fell by USD 12 per tonne from last week to the USD 405-USD 408 range on sluggish demand and as a depreciation in the rupee allowed dealers to reduce export prices.
"In dollar terms, prices have come down due to the falling rupee. Demand from African countries is weak," said an exporter based in Kakinada in the southern state of Andhra Pradesh.
The Indian rupee has fallen 2.5 percent so far in September and was trading near its lowest level in 6-1/2 months. A weak rupee increases exporters' margin.
India's rice production from the summer-sown crop is likely to fall 2 percent year-on-year to 94.48 million tonnes.
In Vietnam, 5 percent broken rice was quoted at USD 385-USD 395 a tonne, FOB Saigon, versus the USD 390-USD 395 range last week, with traders attributing the high rates to a lack of fresh supply in a thinly traded market.
The Vietnam Food Association has raised the country's target for rice exports in 2017 to 5.6 million tonnes, with the world's third-biggest exporter having sold 3.8 million tonnes so far this year.