Rice export prices in India rose to their highest level in more than seven months as the rupee appreciated, denting demand, while trading companies in Vietnam increased domestic buying to fulfil new overseas deals.

India's 5 per cent broken parboiled variety was quoted around $392-$395 per tonne this week, up from $386-$389 last week.

“Demand has been moderating due to the price rise. African buyers are not ready to pay higher prices,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The rupee was trading near its highest level in seven months, trimming returns from overseas sales for traders in the world’s largest rice exporter. In Vietnam, rates for 5 per cent broken rice were in line with last week's $360 a tonne.

Vietnam to the fore

“Demand for Vietnamese rice is seen rising, with key trading companies increasing their purchases from farmers for deals they have signed with customers from Malaysia, Philippines and Iraq,” a trader based in Ho Chi Minh City said.

Vietnam, the world's third largest rice exporter, has shipped more than 200,000 tonnes of rice to Malaysia so far this year, while clients from Iraq have placed orders for 120,000 tonnes, the trader said. A source with the Ministry of Industry and Trade said Egypt was seeking to buy 20,000 tonnes of 10-12 percent broken rice from Vietnam for delivery in June.

Thai benchmark 5 per cent broken rice prices were quoted at $390-$393, free on board Bangkok, on Thursday, up from $380-$385 last week. With demand little changed, traders attributed the price rise to fluctuations in the dollar-baht exchange rate.

On Tuesday, the Thai cabinet agreed to extend a rice trading pact with the Philippines that expired in December for another two years. The agreement allows Thailand, the worlds second-largest rice exporter, to take part in tenders issued by the Philippines, stating that the two countries can trade up to 1 million tonnes of rice per year.

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