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By Rajendra Jadhav
MUMBAI (Reuters) - India's non-basmati rice exports are likely to slow over the next few months as its shipments of the grain have become too expensive on the world market due to a rally in the rupee and an increase in local paddy prices.
Lower shipments from the world's biggest rice exporter will give rivals Vietnam, Thailand and Cambodia a chance to raise their share of the global market.
"Due to an appreciating rupee, we can't match prices quoted by Vietnam or Thailand," said M. Adishankar, executive director at Sri Lalitha, a leading exporter based at Kakinada.
The rupee has risen more than 6.5 percent so far in 2017, reaching its highest in more than two years. A stronger rupee means rice shippers have to raise their dollar-denominated export prices to cover their purchases and other costs.
Key buyers of Indian rice in Africa - such as Benin, Senegal and Guinea - were not comfortable buying at the current level, Adishankar said.
Last month, India's high prices resulted in suspension of a government-to-government deal with Bangladesh, which needs to import rice to replenish stocks hit by flash floods.
In India, paddy rice prices are still rising as most of the supplies from the winter crop have already been consumed.
"Until new summer crops enter into the market from October, paddy supply will remain tight," said a Kakinada-based exporter who declined to be named.
Indian farmers had planted 28 million hectares of paddy rice as of Aug. 4, up 4.9 percent from a year ago, but lower rainfall in southern states has raised concerns over the harvest.
"If Indian prices come down we can see demand from West African markets from October onwards for Christmas," said Gupta of Olam India.
"Prices need to come down by $10 to $15 (per tonne) to become competitive."
(Reporting by Rajendra Jadhav; Editing by Tom Hogue)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)