India rice rates rise, Vietnam prices slip before holiday

Export prices had shot up after the central state of Chhattisgarh, a leading rice producer, raised minimum paddy buying prices to 2,500 rupees per 100 kg from 1,750 rupees.

Neighbouring Bangladesh has no plan to cut the import duty on rice, despite a rise in domestic prices in recent week, given good crops and healthy reserves, a food ministry official said on Wednesday.

Higher domestic prices for the staple had prompted speculation amongst traders that the government would cut the duty.

The south Asian country, which emerged as a major rice importer in 2017 after floods destroyed crops, imposed a 28 percent duty in June to support its farmers after local production revived.

A report from the United Nation's Food and Agriculture Organisation (FAO) estimated Bangladesh's rice output would hit a record 53.6 million tonnes in 2018 on strong domestic prices and bumper yields due to favourable weather conditions.

In Vietnam, rates for the benchmark 5 percent broken rice fell further to $340 a tonne from to $355-$360 last week, ahead of Tet, the Lunar New Year Holiday during the first week of February.

"Trade is very quiet and I think it will stay like this until Tet is over," a Ho Chi Minh City-based trader said. "Customs offices will close during the week-long holiday and things will get slow."

Another trader based in Hanoi said the government was mulling buying rice for stockpiling this year.

"The government couldn't buy last year because prices were high, but we are seeing downward pressure on prices this year given that China has moved to limit shipments from Vietnam," a second trader said.

Thai benchmark 5 percent broken rice prices were quoted at $390-$402 a tonne, free on board Bangkok, versus last week's $385-$400, with traders attributing the change to gains in the domestic currency, as demand remained flat.

"The Philippines remains the focus for many Thai rice exporters because of its liberalized market and because their government said last year that they still need to import a million tonnes," a Bangkok-based trader. "But we are still waiting to hear more about the possible auction."