Asia Rice: Lockdowns and export curbs limit activity in major hubs

By Sumita Layek BENGALURU (Reuters) - There was little activity this week in Asia's main rice trading hubs as a coronavirus lockdown in India hampered exports, Vietnam's ban on shipments to ensure it has enough domestic supply continued while Thai rates remained at seven-year highs.

Reuters April 10, 2020 00:08:11 IST
Asia Rice: Lockdowns and export curbs limit activity in major hubs

Asia Rice Lockdowns and export curbs limit activity in major hubs

By Sumita Layek

BENGALURU (Reuters) - There was little activity this week in Asia's main rice trading hubs as a coronavirus lockdown in India hampered exports, Vietnam's ban on shipments to ensure it has enough domestic supply continued while Thai rates remained at seven-year highs.

In India, the world's biggest rice exporter, traders have stopped signing new export contracts as labour shortages and logistical disruptions caused by the 21-day lockdown are already hampering the delivery of existing contracts.

"Rice is not moving from fields to mills and mills to ports," said an exporter based at Kakinada.

Export prices were unavailable for a second week running.

In neighbouring Bangladesh, the government has halted the export of its common rice variety as domestic prices of the staple grain have been driven to a two-year by panic buying.

"In this situation, there is no scope to allow rice exports even though traders came up with some orders," a commerce ministry official said on Thursday.

It was a similar situation in Vietnam, which has suspended the signing of new export contracts in an attempt to ensure domestic supplies are sufficient during the pandemic.

Vietnam's 5% broken rice prices were unavailable for the third week in a row.

"There have been no transactions and we're still waiting for the final decision from the prime minister on the resumption of exports," said a trader based in Ho Chi Minh City.

Vietnam's Ministry of Industry and Trade asked the government earlier this week to resume rice exports but limit the volume to 800,000 tonnes for April and May.

But traders said the Ministry of Finance wants to keep the ban on white rice exports until June while allowing the export of fragrant and glutinous rice to resume immediately.

Thailand's benchmark 5% broken rice prices widened to $555–$580 per tonne - their highest since April 2013 - from $560-$570 last week on concerns about supply shortages due to an ongoing drought.

"The drought has really hurt supply and pushed up the prices and kept buyers away. This has been going on for weeks," a rice trader in Bangkok said.

Rice exporters in Thailand said they were monitoring the situation in rival exporting countries.

"We're still looking at how COVID-19 is impacting exports in the main competitors like Vietnam and India to see whether a lack of exports there will increase demand for Thai rice. So far there has been no major order from overseas markets," another rice trader in Bangkok said.

"But even if demand increases because others can't sell, the supply situation here could push up the price even further."

(Reporting by Panu Wongcha-um in Bangkok, Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka and Khanh Vu in Hanoi; Editing by David Clarke)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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