April 16, 2015
Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com
Volume 5, Issue I Daily Exclusive
ORYZA Rice Newsletter
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Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com
Ending Levy Rice System will Have Negative Repercussions on Indian Farmers and Consumers, Warn Experts Apr 15, 2015
The government of India's decision to end the levy rice procurement system from the 2015-16 kharif marketing season (October - September) is likely to negatively impact rice farmers and consumers significantly, experts have warned, according to local sources. The government felt the need to abolish the levy rice procurement as there was no proper supervision system and the millers were often not paying Minimum Support Price (MSP) to the farmers and were selling the better-quality grain in the open market. The decision was mainly meant to ensure fair prices to farmers.However, experts say with the absence of levy rice procurement system, farmers have to depend on government agencies and traders and millers to sell their paddy. Most of the times, traders and millers avoid paying minimum purchase price (MSP) to farmers, they say. In KMS 2013-14, most of the traders paid less than Rs.1,200 per quintal against the prescribed MSP of Rs.1,360 per quintal and Rs.1,400 per quintal of common and grade A paddy respectively, says a field officer overseeing procurement in Telangana. 2
Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com They say consumers will also have to bear consequences of this decision in the form of high prices. “Denial of MSP to farmers by traders and millers, however, will not provide any respite to the end-consumers. Millers will have the freedom to sell the rice stocks anywhere and resort to hoarding to create artificial shortage and increase the price heavily,� sources in the Civil Supplies Department were quoted as saying.Under the levy rice procurement system, millers purchase paddy from farmers at MSP and the state governments in turn procure milled rice from millers to meet their public distribution needs. Percentage of levy rice procured from millers differs from state to state and used to be in the range of 30-75% of total procurement in respective states. However, in August 2014, the government of India capped the levy rice procurement from millers at 25% for the 2014-15 procurement season.
Japan May Cut Down Rice Purchases from Thailand if TPP with U.S. Materializes, Say Experts Apr 15, 2015
Japan may cut down rice imports from Thailand and increase rice imports from the U.S. if the Trans-Pacific Partnership (TPP) Agreement between Japan and the U.S. materializes, according 3
Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com to local sources.General Manager at the Norinchukin Research Institute in Tokyo told local sources that if Japan-U.S. TPP goes through, Japan may prefer to import more rice from the U.S. rather than from non-TPP countries. Japan reportedly imported around 330,000 tons of rice from Thailand and around 60,000 tons from China in FY 2014-15 (April - March), according to data from the Japan Agriculture Ministry.Experts are expecting Japan to propose to the U.S. about increasing tariff-free rice imports from Japan in order to take forward the TPP negotiations that have stalled due to an impasse between the two countries over access to Japan's farm markets. Japan is likely to increase imports from the U.S. by about 100,000 tons annually. The Japanese Premier is likely to visit the U.S. shortly as part of efforts to conclude the TPP talks. Japan is keen on protecting its major farm products, including rice, wheat, barley, beef, port, dairy products, sugar and starch from foreign competition.Currently, Japan imports about 770,000 tons of rice under the annual minimum market access (MMA) quota as per the World Trade Organization (WTO) obligations. The WTO regulations require Japan to import half of the mandatory 770,000 tons from the U.S. The rice imports above the MMA quota carry a prohibitive import tariff of around 778%.USDA estimates Japan to produce around 7.7 million tons of rice and import around 700,000 tons of rice in MY 2014-15 (November - October) to meet annual consumption needs of around 8.2 million tons.
Brazil Exports 262,471 Tons of Rice in First Three Months of 2015 Apr 15, 2015
Brazil has exported around 262,471 tons of rice in the first three months of 2015, according to data released by the Rice Institute of Rio Grande do Sul (IRGA).In March 2015, Brazil exported around 142,643 tons of rice, nearly three times more than 49,915 tons exported in February 2014.Iraq remained the largest importer of Brazilian rice in March 2015 with around 61,765 tons, or about 43% of Brazil's total rice exports during the month. Senegal accounted for around 38,676 tons (about 27% of Brazil's total exports during the month); Netherlands accounted for around 14,751 (about 10% of Brazil's total exports during the month); Sierra Leone accounted for 9,191 tons (about 6% of Brazil's total exports during the month); and the Bolivia and Peru accounted for 4% and 2.5% of Brazil’s total rice exports during March 2015 with around 5,938 tons and around 3,635 tons respectively.
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Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com
Cuba (225 tons), U.S. (1,572 tons), Chile (839 tons), Cape Verde (1,911 tons), Trinidad and Tobago (178 tons), Canada (635 tons), Angola (557 tons), Belgium (662 tons), Saudi Arabia (364 tons), and others (1,924 tons) accounted for the remaining 6% of Brazil's total rice exports in March 2015.Brazil exported around 1.24 million tons of rice in 2014, up about 2.4% from around 1.209 million tons exported in 2013, according to data from IRGA.
Oryza U.S. Rough Rice Recap - Prices Unchanged as Farmers Plant Crops Apr 15, 2015
The U.S. cash market was unchanged today with little to trading to report as farmers focus on getting their crop in the ground amid prices that look lackluster to those with crop left to sell.Analysts note that the potential for new Iraq business could give the market what it needs to move prices higher however some are concerned the addition of origins that were previously excluded (Pakistan, Cambodia, India) may decrease the chances for the U.S. to be awarded some of the business.
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USDA Post Forecasts Dominican Republic's MY 2015-16 Paddy Rice Production at 776,000 Tons, Down 2% from Last Year
Apr 15, 2015
USDA Post forecasts Dominican Republic's paddy rice production to decline about 2% to around 776,000 tons (around 520,000 tons, basis milled) in MY 2015-16 (January - December 2015) from around 793,000 tons (around 531,000 tons, basis milled) in the previous year due to a slight decline in paddy rice acreage.The Post forecasts the country's paddy rice acreage at around 160,000 hectares, down about 1% from around 162,000 hectares last year. Rice is grown in two cycles in the country with 75% crop grown in the main season and 25% crop grown in the secondary season. The average yield has been varying between 4 and 5 tons per hectare over the last ten year. The Post expects no change in yields due to lack of improvements in irrigation facilities and production technologies as well as lack of development of new varieties. The Post estimates the country's milled rice consumption to slightly decline to around 533,000 tons in MY 2015-16 from around 538,000 tons in the previous year due to relatively higher prices.USDA Post reports that both imports and exports by the Dominican Republic are limited 6
Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com as the country has been self-sufficient in rice production for the last fe years. The country imported about 13,000 tons in 2014, of which about 92% came from the U.S. It exported around 8,000 tons of rice last year. Dominican Republic has placed rice in Basket V of the The Dominican Republic-Central America FTA (CAFTA-DR) and agreed for a tariff-reduction period of 20 years as well as establishing a 99% out-of-quota tariff rate. The out-of-quota tariff rate will remain unchanged during the first 10 years of the Agreement, until 2015. From 2016 to 2020 the out-of-quota tariff rate will be reduced by 8% annually, and from years 2021 to 2025 by 12% annually. The country also negotiated a special safeguard with an additional tariff rate, which can be applied until the end of the tariff reduction period. The Post forecasts Dominican Republic's MY 2015-16 stocks to decline to around 195,000 tons, down about 4% from last year.
Vietnam Rice Seller Lower Some of Their Quotes Today; Other Asia Rice Quotes Unchanged Apr 15, 2015
Vietnam rice sellers lowered their quotes for 25% broken rice by about $5 per ton to around $335 - $345 per ton today. Thailand rice sellers are out today due to national holiday. India and Pakistan rice quotes are unchanged today.
5% Broken Rice Thailand 5% rice was last indicated at around $385 - $395 per ton, about a $25 per ton premium on Vietnam 5% rice shown at around $360 - $370 per ton. India 5% rice is indicated at around $370 - $380 per ton, about a $5 per ton discount to Pakistan 5% rice shown at around $375 $385 per ton. 25% Broken Rice Thailand 25% rice was last shown at around $355 - $365 per ton, about a $20 per ton premium on Vietnam 25% rice shown at around $335- $345 per ton, down about $5 per ton from yesterday. India 25% rice is indicated at around $345 - $355, about a $15 per ton premium on Pakistan 25% rice shown at around $330 - $340 per ton. 7
Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com Parboiled Rice Thailand parboiled rice was last indicated at around $385 - $395 per ton. India parboiled rice is indicated at around $365 - $375 per ton, about a $15 per ton discount to Pakistan parboiled rice shown at around $380 - $390 per ton. 100% Broken Rice Thailand broken rice, A1 Super, was last indicated at around $320 - $330 per ton, about a $10 per ton premium on Vietnam 100% broken rice shown at around $310 - $320 per ton. India's 100% broken rice is shown at around $275 - $285 per ton, about a $10 per ton discount to Pakistan broken sortexed rice shown at around $285 - $295 per ton.
Vietnam Enterprises Buy 99% of Targeted One Million Tons Rice Under 2015 Stockpiling Plan as on April 13, 2015 Apr 15, 2015
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Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com Vietnam enterprises have bought about 99.4% or around 994,294 tons of targeted one-million tons of winter-spring rice under the government-approved stock piling plan from March 1 - April 13, 2015, Bloomberg quoted local sources as saying. The scheme is understood to close today.The government had approved the stockpiling plan to prevent prices from falling during the harvest of the winter-spring crop. The government has been assisting businesses with 100% soft loans for four months to buy rice under the program. This is the sixth consecutive year that the government of Vietnam has approved the rice stockpiling program during the harvest time of the country's largest winter-spring crop. The Mekong Delta region is expected to harvest about 6.34 million tons of winter-spring crop. The stockpiling program coupled with the Philippines contract to supply 300,000 tons of rice are expected to push up prices considerably.According to data from UN's Food and Agriculture Organization (FAO), wholesale prices of 25% broken rice in the Dong Thap province of the Mekong Delta region increased to around 7 million Dong (around $330) per ton in March 2015 from around 6.7 million Dong (around $310) per ton in February 2015. Similarly, wholesale prices of 20% broken rice increased to around 6.9 million Dong (around $320) per ton in March 2015 from around 6.65 million Dong (around $310) per ton last month. Generally, the past experience shows that the government approved stockpiling plans were not that effective in controlling price falls. Lack of proper storage facilities is cited as the main reason for enterprises not showing interest in buying rice under the program. However, this time, the program is said to have been conducted more effectively due to improved connections among Mekong Delta provinces and cities.
Oryza Overnight Recap – Chicago Rough Rice Futures Slightly Lower, Market Attempts to Recover from Recent Losses Apr 15, 2015
Chicago rough rice futures for May delivery are currently noted 0.2 cents per cwt (about $0.44 per ton) lower at $10.190 per cwt (about $225 per ton) ahead of floor trading in Chicago. The other grains are seen trading mostly higher overnight: soybeans are currently seen about 0.2% higher, wheat is listed about 0.6% higher and corn is currently noted about 0.6% lower. U.S. stock index futures indicated a higher open on Wednesday, amid more first quarter financial earnings and a swathe of economic data. Financial company earnings are expected to grow by
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Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com 12%, in what is seen being a down quarter for the S&P 500, according to Thomson Reuters. Mortgage applications decreased 2.3% from the prior week as interest rates ticked up slightly, according to the Mortgage Bankers Association. Meanwhile, the Empire Manufacturing survey for April Manufacturing activity showed growth in New York State unexpectedly contracted in April, weakening for a third straight month as the pace of new orders fell to a multi-year low, a New York Federal Reserve survey showed on Wednesday. The index showed a decline of 1.19 in April versus March's 6.90 read. There will be a flurry of Fed speakers, including Vice Chairman Stanley Fischer, who is part of a panel discussing macroprudential tools at 10:30 a.m. the International Monetary Fund's spring meeting. In Europe, equities continued to hold higher on Wednesday as the European Central Bank announced it would not change rates. Gold is currently trading about 0.3% higher, crude oil is seen trading about 1.8% higher, and the U.S. dollar is currently trading about 0.1% higher at 8:30am Chicago time.
Philippines Intends to Expand Rice Import Origins Apr 15, 2015
The Philippines procurement agency is exploring ways to import rice from different countries such as Pakistan, Myanmar, and India in order to diversify rice import origins, dominated by Vietnam and Thailand. The nation is one of the biggest importers of rice in the world. Last year the Philippines imported about 1.2 million tons of rice and it is estimated to import about 1.6 million tons this year, according to USDA data. With the availability of other possible sources for rice, the country can better manage the costs and have other alternatives in case of natural disasters and typhoons that regularly ravage its agriculture. Philippine National Food Authority (NFA) officials are working with the trade missions of Pakistan, India, and Myanmar to obtain Memorandums of Agreement (MOA) similar to what the country has with Vietnam, Thailand and Cambodia.The Philippines uses a Minimum Access Volume (MVA) structure wherein local businesses are permitted to import 755,000 tons of rice, subject to a 35% tariff, which is different from state-owned NFA tenders. The NFA Council hasn’t opened the MAV route this year and unconfirmed reports suggest that the government is considering removing tariffs on rice imports, according to local sources.
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Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com
Ending Levy Rice System will Have Negative Repercussions on Indian Farmers and Consumers, Warn Experts Apr 15, 2015
The government of India's decision to end the levy rice procurement system from the 2015-16 kharif marketing season (October - September) is likely to negatively impact rice farmers and consumers significantly, experts have warned, according to local sources.The government felt the need to abolish the levy rice procurement as there was no proper supervision system and the millers were often not paying Minimum Support Price (MSP) to the farmers and were selling the better-quality grain in the open market. The decision was mainly meant to ensure fair prices to farmers. However, experts say with the absence of levy rice procurement system, farmers have to depend on government agencies and traders and millers to sell their paddy. Most of the times, traders and millers avoid paying minimum purchase price (MSP) to farmers, they say. In KMS 2013-14, most of the traders paid less than Rs.1,200 per quintal against the prescribed MSP of Rs.1,360
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Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com per quintal and Rs.1,400 per quintal of common and grade A paddy respectively, says a field officer overseeing procurement in Telangana. They say consumers will also have to bear consequences of this decision in the form of high prices. “Denial of MSP to farmers by traders and millers, however, will not provide any respite to the end-consumers. Millers will have the freedom to sell the rice stocks anywhere and resort to hoarding to create artificial shortage and increase the price heavily,” sources in the Civil Supplies Department were quoted as saying. Under the levy rice procurement system, millers purchase paddy from farmers at MSP and the state governments in turn procure milled rice from millers to meet their public distribution needs. Percentage of levy rice procured from millers differs from state to state and used to be in the range of 30-75% of total procurement in respective states. However, in August 2014, the government of India capped the levy rice procurement from millers at 25% for the 2014-15 procurement season.
Global Rice Quotes April 16th, 2015 Long grain white rice - high quality Thailand 100% B grade 395-405
↔
Vietnam 5% broken
360-370
↔
India 5% broken
370-380
↔
Pakistan 5% broken
375-385
↔
Myanmar 5% broken
410-420
↔
Cambodia 5% broken
435-445
↔
U.S. 4% broken
480-490
↔
Uruguay 5% broken
575-585
↔
Argentina 5% broken
565-575
↔
Long grain white rice - low quality Thailand 25% broken
355-365
↔
Vietnam 25% broken
335-345
↔
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Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com 330-340
↔
Cambodia 25% broken 410-420
↔
India 25% broken
345-355
↔
U.S. 15% broken
470-480
↔
Pakistan 25% broken
Long grain parboiled rice Thailand parboiled 100% stxd
380-390
Pakistan parboiled 5% broken stxd
↓
India parboiled 5% broken stxd 365-375
↔
U.S. parboiled 4% broken
555-565
↔
Brazil parboiled 5% broken
570-580
↔
Uruguay parboiled 5% broken NQ
↔
380-390
↔
Long grain fragrant rice Thailand Hommali 92% Vietnam Jasmine
890-900 475-485
↔
India basmati 2% broken
NQ
↔
Pakistan basmati 2% broken
NQ
↔
Cambodia Phka Mails 810-820
↔
↔
Brokens 320-330
↔
Vietnam 100% broken 310-320
↔
Thailand A1 Super
Pakistan 100% broken stxd Cambodia A1 Super India 100% broken stxd
285-295
345-355
↔
↔
275-285
↔
Egypt medium grain brokens NQ ↔ U.S. pet food 370-380 ↔ Brazil half grain NQ ↔ All prices USD per ton, FOB vessel, oryza.com 13