The rice rally ran into trouble after India hiked its rice crop estimate by 2.2m tonnes and the Philippines met its latest import tender at prices significantly lower than investors had expected.

India said its main, summer-sown rice harvest would come in at 71.65m tonnes after timely rains helped the crop following the weakest monsoon since the 1970s.

While that still leaves the world's second-biggest rice producer on track for a cut of about 15% in production from its summer-planted crop, it cuts the risk of India turning from exporter of rice to importer, as it has already done for sugar.

Sentiment had already been undermined by news that the Philippines, the world's biggest rice importer, had been able to meet its latest tender for 600,000 tonnes of the grain at $664.90 a tonne from Vietnam's state-owned trader Vietnam Southern Food, or Vinafood.

The most expensive offer was reported at more than $770 a tonne.

Vietnam said that its rice stocks stood at 1.7m tonnes, the highest of the last decade and twice the level of a year ago.

Prices tumble 

The reports were poorly received by markets, with Thailand's benchmark 100% B grade white rice dropping 2.4% to $615 per tonne, its first fall in the weekly auctions for two months.

It remains 21% above its mid-October low.

In Chicago, rough rice for January slumped its daily limit of $0.50 to $15.36 a hundredweight, breaking a rally which drove them on Monday to their highest since October last year.

Prices remain 34% above a mid-March low.