Asia Rice-Thai rates soar on drought, demand shifts to India

* Indian prices rise to near 3-month peak
* Vietnam markets closed for Lunar New Year holiday

By Harshith Aranya
BENGALURU, Jan 23 (Reuters) - Export prices for rice from
Thailand jumped to their highest in more than two-and-a-half
years as a drought threatened to sap supply, in turn boosting
demand for a relatively cheaper variety from top exporter India.
Prices of second largest exporter Thailand's benchmark 5%
broken rice RI-THBKN5-P1 rose to their highest since June 2017
at $440-$460 per tonne, from $435-$445 the week before, with
traders attributing the jump to concerns that the ongoing
drought will squeeze supply.
"The market is worried about the shortening of supply, so
some mills are refusing to sell, pushing the price higher," a
Bangkok-based trader said.
A strong baht THB=TH , which is trading close to an over
six-year peak, is also another factor keeping Thai prices high
despite the lack of fresh demand.
"Things have been very quiet, there were some small deals
with markets like Iraq but so far nothing big enough to impact
price," a Bangkok-based trader said.
The high Thai prices prompted some buyers to opt for rice
from India, pushing rates for the Indian variety to their
highest in nearly three months.
India's 5% broken parboiled variety RI-INBKN5-P1 rose to
around $366-$371 per tonne from last week's $364-$368, the
highest since Oct. 31, further supported by higher demand from
African countries.
"Demand has been improving slowly. Since Thai prices are
moving up quickly, some demand is getting diverted to India,"
said an exporter based at Kakinada in the southern state of
Andhra Pradesh.
In neighbouring Bangladesh, domestic rice prices have risen
this week despite good crops and sufficient stocks, which
consumers blamed on poor market monitoring.
A senior commerce ministry official denied these claims, and
said legal action will be taken if any traders try to stockpile
rice to make windfall profits.
Vietnam's markets, meanwhile, are closed from Jan. 23-29 for
the Lunar New Year holiday.