Daily Exclusive ORYZA Rice E-Newsletter Page 1 of 9
September 23,2015
Vol 5.Issue XIV
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Egypt Supports Rice Production in 15 African Countries
Sep 22, 2015
Egypt has completed a session on the transfer of expertise in rice cultivation techniques to 15 African countries; local sources quoted the Egypt State Information Service.Nearly 19 experts from the targeted countries reportedly attended the session, which was conducted between April 20 - September 17, 2015. The session is a part of a joint cooperation between Egypt's Irrigation Ministry, the Egyptian Agency of Partnerships for Development and the Japan International Cooperation Agency (JICA).
The Ministry of Agriculture and Land Reclamation noted that the experts who participated in the session will now be capable of applying the state-of-the-art techniques in rice cultivation and boost rice production in their respective countries.Such support is needed to boost rice production in African nations and ensure food security in the region.
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VAT on Tanzanian Rice Sep 22, 2015
The East African Community (EAC) Secretariat is probing whether Uganda is imposing 18% value added tax (VAT) on rice imported from Tanzania; the IPP Media quoted the local sources. The EAC has decided to carry out the investigation despite not receiving a formal complaint from the Tanzanian rice exporters said the EAC's Director of Customs and Trade. “We have however contacted Uganda to give us a feedback on are whether they imposing VAT on the rice. If it is established that the VAT imposition is discriminative against Tanzanian rice the relevant provisions of the Customs Union Protocol will be invoked,� he was quoted as saying. If found guilty, Uganda will be penalized accordingly, he said. He, however, noted that if Uganda has been imposing VAT uniformly across the board, including the local rice, then it does not involve any discrimination against Tanzanian rice. The Rice Council of Tanzania (RCT) has been reportedly complaining against the imposition of VAT and other discriminatory taxes by the three countries Burundi, Rwanda and Uganda in the recent past. The RCT officials have noted that the provisions of the Customs Union Protocol are being violated. The RCT Vice-Chairman has also called on the Ugandan authorities to reconsider the VAT and other discriminatory taxes.
Oryza Afternoon Recap - Chicago Rough Rice Futures Continue to Retrace as Commodities Come under Pressure as Asian Growth Forecast Lowered Sep 22, 2015
Chicago rough rice futures for Nov delivery settled 6 cents per cwt (about $1 per ton) lower at $12.745 per cwt (about $281 per ton). The other grains finished the day lower as US Ags fell with global commodities; Soybeans closed about 1.4% lower at $8.6175 per bushel; wheat
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finished about 0.3% lower at $4.9550 per bushel, and corn finished the day about 1% lower at $3.8050 per bushel. U.S. stocks traded sharply lower Tuesday, pressured by continued anxiety over slowing global growth following the Federal Reserve's decision to keep rates unchanged. The Dow Jones industrial traded more than 250 points lower. The Nasdaq composite underperformed, falling more than 2% to join the other major averages in negative territory for 2015. The blue chip index is more than 11% from its 52-week high, in correction territory. The S&P and Nasdaq composite remained within 10% of their 52-week highs. Commodities set the tone, with copper slumping more than 3.5%. Traders pin the drop on global growth fears, in part due to a new report from the Asian Development Bank which cut its growth forecast for China. Dow futures plunged more than 275 points in pre-market trade, weighed by sharp declines in European stocks. The DAX was off more than 3% in bear market territory, more than 22 percent below its 52-week high. Volkswagen continued to plunge following the news of an emissions scandal. Mainland Chinese stocks bucked the trend again with a 0.94% gain. The Hang Seng also ended mildly higher. Japanese markets were closed for a holiday. In afternoon trade, the Dow Jones Industrial Average declined 277 points, or 1.66%, at 16,235. The S&P 500 traded down 35 points, or 1.81%, at 1,931, with materials plunging more than 1.5% to lead all 10 sectors lower. The Nasdaq traded down 106 points, or 2.2%, at 4,722. Gold is trading about 0.5% lower, crude oil is seen trading about 4.1% higher, and the U.S. dollar is seen trading about 1.1% higher about 1:45pm Chicago time. Monday, there were 223 contracts traded, down from 333 contracts traded on Friday. Open interest – the number of contracts outstanding – on Monday increased by 38 contracts to 10,767.
Japan May Allow 50,000-70,000 Tons of Duty-Free U.S. Rice Under TPP Deal Sep 22, 2015
The U.S., Japan, and Canada are meeting in San Francisco to reach an amicable understanding on automotive and rice sectors, which have been stalling the TPP talks, according the Nikkei Asian Review. The meeting is ahead of the 12-party talks that would start on September 30, 2015, in Atlanta, Japan, is understood to be firm on maintaining the current tariff of 341 yen per kilogram (around $2,837 per ton) on rice imports. It is planning to allow 50,000 tons of duty-free rice imports from
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the U.S. and gradually increase up to 70,000 tons. Japan will reportedly increase imports from the U.S. by 2,000 tons from the fourth year of the agreement. Japan is also likely to make it clear that it is not required to satisfy the entire import quota in a given year.
However, analysts are expressing doubt if the U.S. government would agree to the Japan's proposal as they are seeking Japan to allow up to 100,000 tons of duty-free rice from the U.S. Currently, Japan imports about 770,000 tons of rice under the annual minimum market access (MMA) quota according to the World Trade Organization (WTO) obligations. Meanwhile, the government of Japan is facing trouble with declining rice consumption in the country due to an aging population and shift of younger population's preferences for wheat-based foods. According to an article in the Financial Times, most of the rice imported under the WTO's MMA quota is not being released into the market. It is mostly used as animal feed or for foreign aid. Japan reportedly spent $3 billion since 1995 on rice imports.
Thailand Rice Sellers Lower Some of Their Quotes Today; Other Asia Rice Quotes Unchanged Sep 22, 2015
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Thailand rice sellers lowered their quotes for parboiled rice and Hommali rice by about $5 per ton each to around $340-$350 per ton and $810-$820 per ton respectively today. Other Asia rice sellers kept their quotes mostly unchanged. 5% Broken Rice Thailand 5% rice is indicated at around $340 - $350 per ton, about $15 per ton premium on Vietnam 5% rice shown at around $325 - $335 per ton. India 5% rice is indicated at around $355 - $365 per ton, about $45 per ton premium on Pakistan 5% rice shown at around $310 - $320 per ton. 25% Broken Rice Thailand 25% rice shown at around $330 - $340 per ton, about $5 per ton premium on Vietnam 25% rice shown at around $320- $330 per ton. India 25% rice is indicated at around $315 - $325 per ton, about $25 per ton premium on Pakistan 25% rice shown at around $290 - $300 per ton. Parboiled Rice Thailand parboiled rice is indicated at around $340 - $350 per ton, down about $5 per ton from yesterday. India parboiled rice is indicated at around $340- $350 per ton, about $75 per ton discount to Pakistan parboiled rice was last shown at around $415 - $425 per ton. 100% Broken Rice Thailand broken rice, A1 Super, indicated at around $305 - $315 per ton, at par with Vietnam 100% broken rice shown at around $305 - $315 per ton. India's 100% broken rice is shown at around $300 - $310 per ton, about $25 per ton premium on Pakistan broken sortexed rice shown at around $275 - $285 per ton.
Heavy Rains Likely to Lower Paddy Yields in Vietnam's Mekong Delta Sep 22, 2015
The paddy rice yields in the Mekong River Delta (MRD) region of Vietnam are likely to decline by about 10-20% due to heavy rains that hit the region last week, according to local sources.
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Around 3,000 hectares of paddy fields in Dong Thap Province and around 10,000 hectares in An Giang province are badly affected and are flattened under the water, according to the Agriculture Ministry officials. Most of the crop has reached harvesting stage and farmers are worried of incurring heavy losses. Officials are helping farmers to remove the flooded water using pump sets so that they can start harvesting once the weather improves. The Ministry is also planning to lift the sluice gates in some areas to speed up the releasing of water from the fields. Some farmers have expressed concern that they are forced to sell the harvested paddy at a loss as they do not have driers to dry the paddy. They noted that most of the flattened paddy had lost its quality also leading to a price drop. The water level in some rice-zoning areas is very high, and farmers are worried that if the inundation lasts a long time, they will lose everything. The rice zoning area No.1 has seen the highest damage, according to the Agriculture Ministry officials. Vietnam's rice exports are already facing stiff competition from India and Thailand as well the neighboring Myanmar and Cambodia. Export prices have also been declining since the beginning of this year due to increasing supplies and low demand.
Vietnam Increases Floor Price of Lower Quality Rice Exports Sep 22, 2015
Vietnam has increased the minimum export price (MEP) of its lower quality (25% broken) rice exports by about 3% to around $340 per ton (free on board) from around $330 per ton, according to Reuters. The new MEP will reportedly be effective from September 25, 2015.The increase can be attributed to Vietnam's winning of the Philippines bid to import around 450,000 tons of rice between November 2015 and January 2016. Vietnam rice export prices have declined sharply during the last few months due to increased competition and reduced demand. The export quote for Viet 25% rice currently stands at around $320 per ton compared to Thai 25% and India 25% prices of around $337 per ton and $320 per ton. Meanwhile, China's increased buying of rice from Vietnam in this month has also slightly increased the Vietnamese rice prices during the last few days. However, traders expressed concern that high prices may impact buying interest.
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Vietnam exported about 3.885 million tons of rice in January 1 - September 17, 2015, down about 19% from about 4.8 million tons of rice exported in first nine months of 2014, according to data from the Vietnam Food Association (VFA).
Thailand Rice Farmers Urge Government to Provide Debt Moratorium as Drought Continues Sep 22, 2015
Thai rice farmers are expecting the government to ban rice planting for 2015-16 second rice crop also if the drought conditions continue, according to local sources.The Agriculture Minister is likely to propose the government to ban planting for the next season as well due to lower water supplies. Planting in about 15 million rai (around 240,000 hectares) is expected to be
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banned. He noted that by October 31, water reserves are likely to reach around 3.6 million cubic meters, which are inadequate for rice farming.They have expressed concern that banning of the third consecutive crop would land farmers in trouble. They urged that government to provide interest-free debt moratorium for 5-10 years if such a decision needs to be taken.The Chairman of the Thai Farmers' Association noted that many farmers are not keen on obeying the government orders. He noted that they would submit in writing to the Prime Minister about their demands.The extending drought conditions are likely to lower the Thai paddy rice production to around 22.98 million tons in 2015-16, down about 30% from around 32.62 million tons last year.
Oryza U.S. Rough Rice Recap - Prices Remain Unchanged as Trade Remains Quiet Sep 22, 2015
The U.S. cash market was unchanged today with little trading to report as farmers are waiting until they complete their harvest before they begin pricing what they haven’t already. Analysts that most of the buy interest as the moment is coming from the domestic buyers while exporter have been mostly quiet.In the meantime, the Iraqi Grain Board extended the deadline on their tender once again until the end of the Eid Al-Adha festival, therefore results are expected after this Thursday, September 24th. Analysts familiar with the tender say that reason for the delay was due to the recent issuing of an arrest warrant for the Iraqi Grain Board’s Director General over problems with related to a previous rice shipment from Brazil.
Thailand Plans to Auction 462,931 Tons of Stockpiled Rice on September 29, 2015 Sep 22, 2015
The government of Thailand is planning auction around 462,931 tons of stockpiled rice on September 29, 2015, Reuters quoted the Commerce Ministry.The Foreign Trade Department has called on the interested parties to submit documents for qualification checks on September 28. 2015.This is the seventh auction this year and eleventh one after the military government took over in May 2014. The government sold around 4.56 million tons of rice raising around 48.6 billion baht (around $1.36 billion) from the first ten auctions. The military government is still holding over 13.5 million tons of rice in its stockpiles and is keen on selling all the rice accumulated under the rice pledging scheme introduced by the previous government in October 2011 in next two years.
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