India rice rates near three-year low, Bangladesh considers cutting duty

Prices of rice from top exporter India held at its lowest in nearly three years this week on low demand as a harvest gathers pace, while neighbouring Bangladesh considered cutting import duty on the staple to rein in surging domestic rates.

Rates for India's 5% broken parboiled variety were unchanged around $358-$362 per tonne, the lowest since January 2017.

Summer-sown crop harvesting has been gathering pace, but export demand is not improving, said an exporter based at Kakinada in the Indian state of Andhra Pradesh.

Rising supplies have also started to push paddy prices below the government-set purchases rate of 1,835 rupees per 100 kg in many spot markets, exporters said.

 

Bangladesh, meanwhile, was considering a reduction of import duties on the staple if local prices continue to rise, an official with the country's commerce ministry said on Thursday.

"We're yet to take any decision. But we'll go for it (duty cut) if prices don't stabilize," the official said, on condition of anonymity.

In May, Bangladesh raised import duty to 55% from 28% to support farmers amid protests over a steep fall in domestic prices. However, prices have rebounded in the past few weeks, despite good crops and sufficient stocks, with the food minister attributing it to price manipulation by some traders.

A Dhaka-based trader said a duty cut was unlikely at this point.

"I don't think the government will take such a decision. It'll be suicidal if they do when there is huge stock in the country," the trader said.

Vietnam's 5% broken rice rates remained flat for a fourth week at $345-$350 a tonne, but demand picked up slightly after Philippines decided last week not to suspend imports.

"Buyers in Philippines, one of Vietnam's top buyers, have started to clinch new deals although the quantity is not large," said a Ho Chi Minh City-based trader.

"But if this batch of shipment to Philippines is smooth, price will increase."

Another trader based in Vietnam's Mekong Delta province of An Giang said trading was subdued.

"A lot of Chinese buyers are shifting to Cambodia and Myanmar as prices there are lower," he said.

Thailand's 5% broken rice prices were also unchanged at $394-$410 a tonne, as demand was flat due to a strong baht and lower prices offered by competitors such as Vietnam and India.

"I've not been able to sell a single tonne for the last two months, it's unbelievable," a Bangkok-based trader said.