India rice rates dip on subsidy, while low China demand saps Vietnamese rates

Rice export prices fell for the first time in four weeks in India as a government subsidy for overseas sales prompted traders to cut rates, while lower demand from China weighed on the Vietnamese market.

Top exporter India's 5 percent broken parboiled variety was quoted around $366-$370 per tonne, against $367-$375 in the previous week.

The Indian government will give a subsidy of 5 percent for non-basmati rice exports for the four months to March 25, 2019, the country's trade ministry said in an order dated Nov. 22.

Prices could have jumped had it not been for the subsidy, since the rupee has risen, said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The top exporter's rupee currency rose about 1 percent on Thursday, trimming exporters' margins.

In Vietnam, rates for 5 percent broken rice dipped to $408 a tonne from $410 a tonne last week as exports to China fell, traders said.

"China has been applying stricter conditions for Vietnamese rice, including lengthy inspection time," a Ho Chi Minh City-based trader said. 

Rice shipments to China, Vietnam's largest rice export market, fell 39.1 percent in the first ten months of this year from a year earlier, the Ministry of Industry and Trade said on Thursday.

Also, the Philippines will not open any more tenders for the rest of this year, hurting the Vietnamese prices, another trader in Ho Chi Minh City said.

The Philippines' state grains agency National Food Authority (NFA) on Wednesday accepted rice supply offers totalling 203,000 tonnes from Vietnam and Thailand in fresh government-to-government deals.

The import tender was the last this year for the Philippines following a buying spree to boost thin state stockpiles and bring down high retail prices.

Meanwhile, in Thailand, benchmark 5 percent broken rice prices widened to $380-$397 per tonne, free on board (FOB) Bangkok, from $382-$395 last week, due to weaker demand and prospects of fresh supply.

"The sale of rice by Thai exporters for the Philippines deal has been relatively small, and with no other demands price will likely remain flat as we head into the new year period," a Bangkok-based rice trader said.

Rice from a seasonal harvest in Thailand is expected to gradually enter the market in December.

The market will likely see little activity unless there is the new government-to-government deal, another trader said.

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