Monday, January 26, 2015

26th January (Monday),2015 Daily ExclusiveORYZA Rice E-Newsletter by Riceplus Magazine

Asia Rice Quotes Unchanged Today

Jan 23, 2015
Asia rice sellers kept their quotes mostly unchanged today.
5% Broken Rice
Thailand 5% rice is quoted at around $405 - $415 per ton, about $40 per ton premium on Vietnam 5% rice shown at around $365 - $375 per ton. India 5% rice is quoted at around $395 - $405 per ton, about $35 per ton premium on Pakistan 5% rice quoted at around $360 - $370 per ton.
25% Broken Rice 
Thailand 25% rice is quoted at around $365 - $375 per ton, about $25 per ton premium on Vietnam 25% rice shown at around $340 - $350 per ton. India 25% rice is quoted at around $360 - $370, about $40 per ton premium on Pakistan 25% rice quoted at around $320 - $330 per ton.
Parboiled Rice
Thailand parboiled rice is quoted at around $405 - $415 per ton. India parboiled rice is quoted at around $390 - $400 per ton, about $10 per ton discount to Pakistan parboiled rice quoted at around $400 - $410 per ton.
100% Broken Rice
Thailand broken rice, A1 Super, is quoted at around $320 - $330 per ton, about $5 per ton premium on Vietnam 100% broken rice shown at around $315 - $325 per ton. India's 100% broken rice is shown at around $300 - $310 per ton,  about $10 per ton premium on Pakistan broken sortexed rice quoted at around $290 - $300 per ton.

Oryza Afternoon Recap - Chicago Rough Rice Futures Break $11.000/cwt as Falling Crude and Global Competition Continue to Weigh on Prices

Jan 23, 2015
Chicago rough rice futures for Mar delivery settled 15 cents per cwt (about $3 per ton) lower at $11.010 per cwt (about $243 per ton). Rough rice futures continued lower today, adding to losses sustained yesterday and on the week. These losses bring the total on the week to 33.5 cents per cwt (about $7 per ton) and saw the market dip below psychological support at $11.000 per cwt (about $243 per ton) in late session trading. Today’s dip to $10.960 per cwt (about $242 per ton) marks a fresh contract low and has returned price to levels not seen since 2010. Although the market did manage to close just above the previously mentioned level of support, the outlook for trading early next week remains negative and traders expect a continuation lower. Negativity in outside markets such as crude and the euro continue to weigh on US grain prices and will likely continue to do so in coming sessions. The other grains finished the day with mixed results today; Soybeans closed about 0.4% lower at $9.7375 per bushel; wheat finished about 0.7% lower at $5.3000 per bushel, and corn finished the day about 0.8% higher at $3.8775 per bushel.U.S. stocks mainly fell on Friday, with the S&P 500 halting a four-session winning run, as investors considered economic data, energy costs and a reduced 2014 earnings estimate from United Parcel Service. Friday's economic reports had had existing-homes sales rising 2.4 percent to an annual rate of 5.04 million in December. After a 91-point slide, the Dow Jones Industrial Average was lately off 39.66 points, or 0.2%, to 17,774.32. The S&P 500 shed 3.45 points, or 0.2%, to 2,059.70, with materials and telecom hardest hit and utilities and technology faring best of its 10 major sectors. The Nasdaq gained 13.83 points, or 0.3%, to 4,764.21. Gold is trading about 0.7% lower, crude oil is seen trading about 1.5% lower, and the U.S. dollar is seen trading about 0.8% higher at about  1:00pm Chicago time.Thursday, there were 800 contracts traded, up from 240 contracts traded on Wednesday. Open interest – the number of contracts outstanding – on Thursday decreased by 10 contracts to 8,746.


FAO Estimates Liberia to Import 350,000 Tons of Rice in 2015; Up 24% from Last Year

Jan 23, 2015

The UN's Food and Agriculture Organization (FAO) has estimated Liberia to import around 350,000 tons of rice in 2015, up about 24% from an estimated 282,250 tons in 2014 due to a reduction in paddy rice production following the outbreak of the Ebola Virus Disease (EVD).  Liberia's total cereal imports are estimated at around 445,000 tons in 2015.   
Liberia's 2014 paddy rice output is estimated to decline to around 237,000 tons (around 174,000 tons, basis milled), down about 12% from around 270,000 tons in 2013, according to the FAO.The outbreak of EVD during the planting and harvest time of the rice crop has disrupted various farming activities including crop maintenance (such as weeding, fencing and application of chemicals) and harvesting due to labor shortages.
Harvesting of the 2014 paddy crop was completed in December. According to the FAO GIEWS Disease Impact on Agriculture – Simulation (DIAS) Model, paddy crop has been hard hit in Lofa and Margibi counties, where losses are estimated at about 25%.Since Liberia relies heavily on food imports, including rice, border closures, quarantine measures and other restrictions to contain EVD outbreak led to severe food shortages. According to the World Bank data, as of November 2014, nearly 630,000 people are estimated to be food insecure (of which 170,000 are attributed to EVD), and the number is projected to increase to 750,000 (250,000 attributed to EVD) by March 2015. Most of the people affected by EVD are farmers, fishermen, hunters and unskilled laborers.
Prices of imported rice in the country have increased significantly during the past five months partly due to EVD and partly due to local currency depreciation against the dollar, but stabilized in November 2014, according to the FAO.USDA estimates Liberia to produce around 189,000 tons of milled rice and import around 300,000 tons in 2014-15 (October-September) to meet an annual consumption demand of around 480,000 tons.

IGC Estimates 2015 World Rice Trade at 41.6 Million Tons; Slightly Down from Last year

Jan 23, 2015

The International Grains Council (IGC) has estimated 2015 world rice trade at around 41.6 million tons, slightly down from around 42 million tons in 2014 as a reduction in imports to Far Eastern countries such as China, Indonesia and the Philippines is expected to be offset by increased imports to other regions such as Africa.
The IGC expects total rice imports by Far East Asian countries including Bangladesh, Malaysia, Indonesia, China and the Philippines, at around 13.1 million tons in 2015, down about 5% from around 13.8 million tons last year. It expects China to remain largest importer in 2015 with about 3.8 million tons. The IGC expects Bangladesh and Sri Lanka to import around 600,000 tons and around 200,000 tons in 2015. It expects rice imports by the Philippines and Indonesia to be lower than last year but to be significant due to their efforts to maintain reserves. The IGC estimates shipments to sub-Saharan Africa at an above-average level of about 14 million tons. Shipments to Nigeria, Ivory Coast, Ghana and Nigeria are expected to increase. 
On the exports side, the IGC estimates Thailand to export around 11 million tons of rice in 2015, up about 8% from around 10.2 million tons in 2014. Most of its sales are expected to sub-Saharan Africa and Far East Asia, especially China. The IGC expects India to export around 8.8 million tons of rice in 2015, about 17% lower than around 10.3 million tons exported last year due to increasing concerns of the impact of a weak monsoon on the country's production.  
The IGC estimates 2014-15 global rice production at around 474 million tons, slightly down from around 475 million tons in 2013-14. It expects decline in production in many parts of the world to offset a 1.5% increase in production in China to around 144.5 million tons. It expects India's rice production to decline 3% y/y to around 102.5 million tons. The IGC is expecting higher output in the Philippines and Vietnam but a lower output in Thailand. It is also expecting higher outputs in the U.S. and South America.
It expects global rice consumption in 2014-15 to increase to around 482 million tons, up about 1.2% from around 476 million tons in 2013-14 due to expected increased consumption in Asian countries including India (98.3 million tons) and China (147 million tons) as well as in sub-Saharan Africa (26 million tons) and in the Americas (4.2 million tons). 
The Council expects world rice ending stocks in 2014-15 to decline to around 101.6 million tons from around 109 million tons in the previous year. It expects inventories of major rice exporters to decline to around 31.7 million tons, down 20% from around 39.4 million tons last year mainly due to higher stock depletion in India and Thailand.

Oryza U.S. Rough Rice Recap - Prices Weaken Further despite Record Export Shipments

Jan 23, 2015
The U.S. cash market was softer yet again today falling with a futures market that can’t seem to find a bottom. Analysts continue to believe that prices will remain in free fall without a substantial increase in export demand.In the meantime, the USDA reported that cumulative net export sales for the week ending on January 15th, totaled 97,800 tons, which was 27% higher than last week and considerably higher than the prior 4-week average.
Increases were reported for the following destinations: 79,100 tons to Mexico, 4,000 tons to El Salvador, 3,000 tons to the United Kingdom, 2,500 tons to Turkey, and 2,400 tons to unknown destinations.U.S. rice exporters shipped 148,900 tons, a marketing year high, which was considerably higher than last week and the prior 4-week average. The primary destinations included 62,500 tons to Turkey, 31,400 tons to Iraq, 25,100 tons to Japan, 12,500 tons to Mexico, and 9,400 tons to Haiti.

Spain's Rice Sector to Receive $13.9 Million Support in 2015

Jan 23, 2015

The Spanish government will support the country’s rice sector with around around 12.2 million euros (around $13.9 million), according to official sources. The amount also includes funds allocated to the sector under the European Union (EU) Common Agricultural Policy (CAP) as well as some contributions from local communities. 
The allocated amount can support about 122,060 hectares of rice fields concentrated around the regions of Andalucia, Catalunia and Valencia. Spain is the second largest producer of rice in the EU after Italy.According to the Royal Decree number 1075/014 approved on December 19, 2014, rice farmers intending to receive direct help from the government need to declare their rice fields October 15, 2015, confirm the actual planted area by November 15, 2015. As per the available funds, each farmer can get maximum help of around 400 euros (around $455) per hectare.Also rice farmers need to grow rice in irrigated area and use seeds of varieties included both in the EU common Catalogue of agricultural plants as well as in the Spanish Register of commercial varieties; or take a special permission from the Agriculture Ministry. The decision is to safeguard rice production in traditional areas where there is no alternative to rice growing as well as for protecting ecological balance.The total amount available for the sector is said to be published every year, from 2015 to 2020, on the web site of FEGA, Fondo Español de Garantìa Agraria (Spanish Fund of Agricultural Guarantee).

Armyworms: Farmers' Foes in Australia

Jan 23, 2015
Armyworm, a type of caterpillar of a native moth, is known to be attacking rice crops in Australia, especially in New South Wales region, according to local sources.The worms usually appear enclosed in a shell type covering and attack the rice crop just when the rice heads begin to emerge. When they attack, there are chances that nearly 50% of the rice output is affected. They mostly affect rice varieties that are drained mid-season. Local agronomists say this pest was not so attacking a few years ago but of late they have become very powerful. They say the pest has to be eradicated in the beginning and before they multiply to prevent significant damage. They say the armyworms can be killed with chemicals at budding stage. But they have to be properly identified, say agronomists. They also noted that once killed in the initial stage, there is a very little possibility that they re-emerge.

Oryza Overnight Recap - Chicago Rough Rice Futures Look to Open Higher on Strong Export Sales -- but Will They Be Enough to Erase Steep Losses Sustained Yesterday?

Jan 23, 2015
Chicago rough rice futures for Mar delivery are currently listed 7.5 cents per cwt (about $2 per ton) higher at $11.235 per cwt (about $248 per ton) ahead of floor trading in Chicago. The other grains are seen mostly lower: soybeans are currently seen 0.6% lower, wheat is listed about 1.1% lower and corn is currently noted about 0.1% higher.U.S. stock-index futures wavered on Friday, a day after European Central Bank President Mario Draghi detailed plans of a larger-than-expected bond-buying program. In an effort to bolster the euro-zone economy, Draghi said the central bank would make monthly bond purchases of as much as $70 billion, starting in March and running to September 2016. The stimulus package was well-received by global markets, with European stocks rallying on Friday.
The euro also weakened to an 11-year low against the dollar, and euro-area sovereign bond prices ticked up. The day also brings several key data releases. Existing home sales at 10:00 a.m. ET are expected to push back just above 5 million, having dipped below this level for the first time in six months in November. The Conference Board's Leading Index for December is also due at 10:00 a.m. ET. In other news, Saudi Arabia's King Abdullah died early on Friday and his brother Salman has been named king. Investors will be keeping a close eye on the oil-exporting nation and what the succession means for crest-fallen commodity. Gold is currently trading about 0.3% lower, crude oil is seen trading about 1.1% lower,  and the U.S. dollar is currently trading about 0.7% higher at 8:30am Chicago time.

Pakistan to Develop Rice Husk Based Power Plants

Jan 23, 2015
Pakistan Rice Millers Association (PRMA) has collaborated with the United Nations Industrial Development Organization (UNIDO) to develop rice husk-based gasification power plants in the rice producing areas of the country, according to local sources.The project funded by the Global Environmental Facility (GEF) aims to generate cheap and uninterrupted power supply from rice husk. To start with, the PRMA has signed a memorandum of understanding (MOU) with the UNIDO, under which the UNIDO will support the PRMA to support the development of a feasibility study for 1 Mega Watt (MW) rice husk based gasification power plant at Bawalnagar, according to local sources.
Of late, Pakistan has been facing serious energy issues, including frequent power cuts and breakdown downs due to which the small and medium scale (SMEs) have been facing several problems such as low productivity and incomes.The project is expected to lay a foundation for the development of biomass gasification technologies in the future in Pakistan, according to the industrial development officer at the UN.“Pakistan being an agricultural country possesses a fuel for future which is cheap, clean and abundant. Such projects will enable SMEs to have uninterrupted electricity to run their operations, which will increase their productivity and also help in providing low cost electricity,” the The UNIDO’s country representative for Pakistan was quoted as s

Thai Government Fixes Rice Floor Prices for Upcoming Auction at Below Market Levels

Jan 23, 2015
The Thai government has reportedly fixed floor prices for rice to auctioned on January 29, 2014 at below market levels. According to local sources, the government has fixed floor price for white rice at around 8-10 baht per kilogram (around $245-$307 per ton), while the market price is quoted at around 13 baht per kilogram (around $399 per ton). On the other hand, the government has fixed the floor price for Hom Mali rice at around 20-21 baht per kilogram (around $613-$644 per ton) compared to market price of around 31-33 baht per kilogram (around $950-$1,012 per ton).
The government is planning to auction around 850,000 tons of 5% broken rice and around 150,000 tons of jasmine rice on January 29. The Director General of the Foreign Trade Department was quoted as saying that the government would auction rice on a whole-warehouse basis and a wide variety of grades and varieties would be offered for sale. The government is understood to auction rice from 168 warehouses in 36 provinces.The government has told that it will allow prospective bidders to inspect samples of rice stocks being put up for sale before the scheduled auction to ensure transparency in rice sales in the wake of concerns over the deteriorating quality of rice stocks.
Two or three auctions are expected before the end of March, according to official sources. The military government is keen on selling around ten million tons of rice stocks this year. About 60% of this year's sales will comprise of premium-grade rice and 40% will comprise of substandard grains, according to the Commerce Ministry Permanent Secretary.It sold around 681,740 tons of rice in last four auctions raising around 6.36 billion baht (around $195 million) after it took charge on May 22, 2014.

Weekly Recap: Former Thailand PM Yingluck Impeached; Ebola Rages On; Asian Rice Quotes Continue Lower

Jan 23, 2015

The Oryza White Rice Index (WRI), a weighted average of global white rice export quotes, ended the week at about $425 per ton, down about $6 per ton from a week and a month ago and down about $38 per ton from a year ago.
Thailand
Thailand 5% broken rice is today shown at about $405 per ton, down about $5 per ton from a week and a month ago, and down about $35 per ton from a year ago.
Today, Thailand’s military-appointed legislature voted to impeach former Prime Minister Yingluck.  In response, Yingluck said the move was part of a “political agenda” and adding on Facebook, “Democracy has died in Thailand today, along with the rule of law.” Her political party, the Pheu Thai, is considered the most popular political party in Thailand and won the 2011 on promises of higher rice prices under the government’s now-failed rice pledging scheme. 
The joint panel consisting of members of the National Anti-Corruption Commission (NACC) and the Office of the Attorney General (OAG) will recommend criminal charges against former PM Yingluck under the criminal code’s Section 157. Losses from the rice subsidy/pledging scheme between 2004 and 2014 are estimated to exceed earlier estimations of about $682 billion baht (about $21 billion USD) if depreciation and missing rice stocks are included, according to the Finance Permanent Secretary.  The government of Thailand has said it will maintain transparency in all future G2G contracts, following misdealings that occurred during Yingluck’s tenure as Prime Minister.
Meanwhile, the government plans to sell about one million tons of rice in a tender on January 29, and it will allow prospective bidders to inspect samples of rice stocks being auctioned, according to the Wall Street Journal.
It seems that long after the end of the rice mortgage scheme and the now impeachment of Yingluck, Thailand rice export quotes are depressed, Thailand rice stocks remain high, and farmers are arguably facing worse market conditions than before the scheme started.
India
India 5% broken rice is today shown at about $400 per ton, unchanged from a week ago, up about $10 a month and down about $10 per ton from a year ago.
The High Level Committee, tasked with looking into the present structure and operational aspects of the Food Corporation of India (FCI), submitted its recommendations to the Prime Minister today.  The Committee recommends that the FCI hand over all procurement operations of paddy, rice and wheat to states that have requisite infrastructure and instead focus on procurement in states where farmers suffer from distressed sales.
The Indian government plans to increase exports of rice (and other products) to China in continuing efforts to contain increasing trade deficit with the neighboring country, according to the Economic Times.
The Prime Minister of Bangladesh reiterated their government’s willingness to export rice to India, after India showed interest in buying around 20,000-30,000 tons of rice from them. Separately, many private business firms and multi-national corporations are planning huge investments in Bangladesh’s $6.4 billion rice milling sector following a consistent and rising demand for rice in the country.  Recently, blockades of highways, railways, and waterways have been disrupting the supply chain there since the Opposition Leader called for blockades on January 5.
Vietnam
Vietnam 5% broken rice is today shown at about $370 per ton, down about $10 per ton from a week ago, down about $20 per ton from a month ago and down about $35 per ton from a year ago. The forward outlook remains dim for quotes. The Vietnam Food Association (VFA) has scaled down expectations for rice exports in the first three months of 2015 to around 900,000 tons.  Meanwhile, the VFA plans to procure the entire paddy rice output in 2015 in efforts to protect farmers from anticipated price decreases.
Pakistan
Pakistan 5% broken rice is today shown at about $365 per ton, down about $10 per ton from a week and a month ago and down about $30 per ton from a year ago.
In December 2014, Pakistan exported about 490,371 tons of rice, an increase of about 7% from November, according to the Pakistan Bureau of Statistics.  In terms of value, export earnings increased to about $238.2 million in December, up about 8% from November.
Central & South America
Brazil 5% broken rice is today shown at about $540 per ton, unchanged from a week ago, down about $10 per ton from  a month ago and down about $125 per ton from a year ago.
The USDA Post estimates Mexico’s MY 2014-15 rice imports at around 775,000 tons, up about 10.7% from MY 2013-14.
U.S.
U.S. 4% broken rice is today shown at about $500 per ton, down about $15 per ton from a week and a month ago and down about $90 per ton from a year ago.
The U.S. Treasury’s Office of Foreign Assets Control announced new trade norms with Cuba following President Obama’s announcement to relax the 50-year embargo with the country. The U.S. rice industry is hopeful about exports to Cuba.
The U.S. share in South Korea’s total rice imports in 2014 declined to about 15% from about 30% in 2013 due to high prices driven by drought conditions, according to the USDA Post.
U.S. cash prices for rough rice has been quiet this week as with bids and offers both hard to find.  Buyers remain hand-to-mouth, and later in the week the cash market fell in tandem with the futures market.
After a holiday on Monday, Chicago rough rice futures for March delivery were around $11.350 per cwt (about $250 per ton) and climbed slightly during the short week before dropping Thursday and Friday.  Futures for March delivery closed the week at $11.050 per cwt (about $244 per ton).
Other Markets
Cambodia 5% broken rice is today shown at about $440 per ton, down about $5 per ton from a week ago, down about $25 per ton from a month ago and down about $15 per ton from year ago. Separately, Cambodia’s MY 2014-15 rice exports are expected to increase about 15% from MY 2013-14 to 1.15 million tons (official and unofficial tonnage), according to the UN’s FAO.
Starting in April 2015, Myanmar will begin exporting rice to China legally, following the finalization of a trade agreement between the two countries.
The Food and Agricultural Organization data show that prices of food, including rice, have increased on average from 30% to 75% in African regions affected by the Ebola virus, and the UN’s International Fund for Agriculture Development warns that if the situation continues for long, those regions may face acute food shortages.
Nepal is considering allowing rice exports to China in the fiscal year 2014-15 (August-July), based on the huge demand for Nepali rice in China.
Paddy rice production in Indonesia is expected to increase about 4% to 73.4 million tons in 2015.
Paddy rice output in the Philippines in 2014 has increased about 2.87% from 2013 to reach about 18.97 million tons (about 11.95 million tons, basis milled).
Japan has purchased about 61,000 tons of non-glutinous milled rice from Thailand and the U.S.
In the first eleven months of 2014, China imported about 2.244 million tons of rice, down about 1% from the same period last year, according to the China Customs General Administration.
The Sri Lanka government will release the stored rice in its warehouses into the open market before the harvest season of the 2014-15 Maha rice crop (September-April) begins next month.
The FAO estimates Liberia will import 350,000 tons of rice in 2015, up 24% from last year.
The government of Spain has said it will support the country’s rice sector with around 12.2 million euros (about $13.9 million).

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