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Asia Rice-India prices rise as demand from Bangladesh offsets high supply

By Koustav Samanta

BENGALURU, Dec 7 (Reuters) - Rice prices in India climbed
this week as strong demand from neighbouring Bangladesh
counteracted fresh supplies from a new season crop in the
world's top exporter.

India's 5 percent broken parboiled rice prices
<RI-INBKN5-P1> rose by $4 per tonne to $406-$409.

"Bangladeshi demand has improved sentiment. That is
nullifying the impact of higher supplies from the new crop," an
exporter based in Kakinada in the southern state of Andhra
Pradesh said.

Bangladesh, which has emerged as a major importer this year
after floods hit its crops, will import 150,000 tonnes of rice
from India in a state deal priced at $440 a tonne, two food
ministry officials said on Wednesday.

India's state-run National Agricultural Cooperative
Marketing Federation (NAFED) will supply the rice within 60 days
after signing the deal, which will take place soon, the
officials said.

Bangladesh has tried to secure supplies through India's
state-run trading houses, which have floated tenders in the
local market for procurement, the Kakinada-based exporter said.

The country had already sealed a deal with another state
agency in India, PEC, to import 100,000 tonnes at $455 a tonne.

Meanwhile, Thailand's benchmark 5 percent broken rice was
quoted at $401-405 a tonne, free-on-board (FOB) Bangkok, up from
$395-$400 last week.

Demand remained relatively quiet in the world's
second-biggest rice exporter as supply remains more or less
constant despite some losses due to floods, traders said.

"I don't think prices of rice will rise any more
substantially before the end of the year. Next year, however, we
might see some government intervention," said a Bangkok-based
trader.

The Ministry of Commerce has a target to export 11 million
tonnes by the end of the year, and traders are optimistic the
target could be reached within a plus-minus five percent range.

Thailand's Ministry of Agriculture and Cooperatives and
other agencies will hold the Thai Rice Festival 2017 in Bangkok
from Dec. 15-20. Traders expect this to have a positive effect
on demand.

In Vietnam, the rice market continued to be quiet even as
stocks remained low.

The country's 5 percent broken rice <RI-VNBKN5-P1> traded at
$395 a tonne, free-on-board (FOB) Saigon, mostly unchanged from
last week's $395-$398 range.

"We sold (5 percent broken rice) at $395 a tonne in a new
private contract," a trader in Ho Chi Minh city said, but did
not specify the buyer.

Traders were unsure when there would be new
government-to-government deals, but the delivery of previous
state contracts brought Vietnam's rice shipments closer to the
target of 5.6 million tonnes in 2017.

(Reporting by Mi Nguyen in Hanoi, Suphanida Thakral in Bangkok,
Rajendra Jadhav in Mumbai and Ruma Paul in Dhaka, editing by
David Evans)

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