Thursday, June 18, 2015

18th June (Thursday),2015 Daily Exclusive ORYZA Rice E-Newsletter by Riceplus Magazine

About 30% of North Korean Paddy Rice Acreage Dried Up Due to Drought, Says KCNA

Jun 17, 2015
North Korea is experiencing worst drought conditions in a century and about 30% of the country's rice land has dried up, the official Korean Central News Agency (KCNA) reported on June 16."Water level of reservoirs stands at the lowest, while rivers and streams (are) getting dry," said the report. Official sources are predicting the production of rice to decline by about 20% of the average production if the shortage of water continues till July.USDA estimates North Korea's 2015 milled rice production at around 1.7 million tons, down about 10% from around 1.88 million tons in 2014.

Asia Rice Quotes Unchanged Today

Jun 17, 2015
Asia rice sellers kept their quotes mostly unchanged today.                                                           
5% Broken Rice
Thailand 5% rice is indicated at around $355 - $365 per ton, about a $10 per ton premium on Vietnam 5% rice  shown at around $345 - $355 per ton. India 5% rice is indicated at around $365 - $375 per ton, about  $15 per ton discount to Pakistan 5% rice shown at around $380 - $390 per ton.
25% Broken Rice
Thailand 25% rice is shown at around $340 - $350 per ton, about a $10 per ton premium on Vietnam 25% rice shown at around $330- $340 per ton. India 25% rice is indicated at around $350 - $360, about $15 per ton premium on Pakistan 25% rice shown at around $335 - $345per ton.
Parboiled Rice
Thailand parboiled rice is indicated at around $360 - $370 per ton. India parboiled rice is indicated at around $355 - $365 per ton, about a $45 per ton discount to Pakistan parboiled rice shown at around $400 - $410 per ton.
100% Broken Rice
Thailand broken rice, A1 Super, is indicated at around $315 - $325 per ton, about $5 per ton premium on Vietnam 100% broken rice shown at around $310 - $320 per ton. India's 100% broken rice is shown at around $280 - $290 per ton, about a $15 per ton discount to  Pakistan broken sortexed rice shown at around $295 - $305 per ton.

About Half of Rice Land in Central Region Will Not Be Affected by Reduced Water Supplies, Says Thai Agriculture Ministry

Jun 17, 2015
Thailand's Agriculture and Cooperatives Ministry has announced that about 3.4 million rai (around 544,000 hectares) of rice land, or 46% of the total rice land in the Central region will not be affected by the government's decision to cut water supplies from the Chao Praya River basin to irrigated lands, according to local sources.The Agriculture Minister noted that the drought was most severe in 22 provinces of the Central region, where about 7.4 million rai (around 1.184 million hectares) of rice land receive an irrigated water supply from the Chao Praya River. It advised the rice farmers in about 4 million rai (around 640,000 hectares) land to wait until there is sufficient rain at the end of next month. He urged the farmers to understand the situation and follow the government advice to delay planting until the water levels in the reservoirs improve.
Separately, the Prime Minister told local sources that the government has instructed the  Department of Royal Artificial Rain-making and Agricultural Aviation to monitor the weather conditions and accordingly create artificial rain in areas with reservoirs in order to increase the supply.Meanwhile the Thai Rice Mill Association (TRMA) President expressed concern that the prolonged low rice price in Thailand may force many rice millers to shut their operations. He told local sources that more than 100 mill operators are affected by the falling rice prices.
Currently, the price of 15% moisture content rice is ruling at about 7,500 – 7,700 baht per ton (around $222 - $228) down from the previous 8,000 – 8,500 baht per ton (around $237 - $252). Average farm price of paddy is at around 6,700 – 7,000 baht per ton (around $199 - $208), he said.

Bangladesh's Boro Rice Procurement Drive Fails to Provide Respite to Farmers

Jun 18, 2015
The boro paddy and rice (January – May) procurement drive has not provided the expected respite to farmers in terms of prices, according to local sources.Despite the ongoing procurement drive, farmers are forced to sell their paddy at almost half of their production costs. They are currently selling freshly harvested boro rice between Tk 480 - 500 per 40 kilograms (around $146-$162 per ton) against the government's estimated production cost of around Tk 800 per 40 kilograms (around $260 per ton).
The government began the procurement of one million tons of 2015 boro paddy and 100,000 tons of boro rice from May 1, 2015. The procurement drive will continue till August 31, 2015. It has fixed the procurement price for paddy at Tk 22 per kilogram (around $283 per ton) and that for rice at Tk 32 per kilogram (around $412 per ton). 
However, local sources say the government is currently procuring milled rice from millers rather than paddy from farmers. It has already procured around 313,000 tons of milled rice from the millers. Due to this stance by the government, farmers are at a loss as they are not receiving the government set price of $283 per ton, and are forced to sell to millers and traders at much lower prices. Traders and miller s on the other hand are not offering decent prices to farmers as the market is flooded with low quality rice imports from India.Farmers are worried as they are unable to recover their production costs and also they are not in a position to hold their output until the government starts procuring paddy from them.
The government imposed a duty of 10% on rice imports in May this year to curb increasing imports from India. Though this action by the government increased boro paddy price by about 20%, farmers had not benefitted out of it. Most of the farmers reportedly sold their output from the boro harvest season even before the duty imposition and were not left with any stocks to take advantage of the increased prices. According to local sources, this decision was also meant to benefit millers who stocked enough paddy from the ongoing harvest.Either way, farmers stand at a loss, according to local sources.The government is estimating the output from the 2014-15 ongoing boro crop at around 19 million tons.
USDA estimates Bangladesh’s MY 2014-15 (July 2014 – June 2015) milled rice production to slightly increase to about 34.5 million tons from an estimated 34.39 million tons in MY 2013-14. It estimates Bangladesh to import 1.1 million tons of rice in 2015.   

EU Seeks Aromatic Rice Import Deal from Myanmar

Jun 18, 2015
The European Union (EU) is considering to import aromatic rice from Myanmar as the demand for aromatic rice in the region is increasing, according to local sources.A delegation from the European Commission (EC) had met with the representatives of the Myanmar Rice Federation (MRF) on June 17 to discuss the country's ability to export fragrant rice to the EU in the mid- to long-term. The General Secretary of the MRF reportedly told the delegation that Myanmar can produce both short and long grain aromatic rice and can meet the EU demand through the contract farming system. Myanmar produces two types of fragrant rice - Lone Thwal Hmwe and Paw San.
The MRF Vice-Chairman told local sources that exporting fragrant rice to the EU will help Myanmar rice farmers to diversify their market but they need to increase the aromatic rice production if they have to export it to the EU as the current production is sufficient only to meet the local demand. He also noted that since the local price of Paw San is quite high, most of the farmers do not want to export. He added that the export price of Paw San would be in the range of $900 per ton.According to the MRF data, Myanmar exported around 100,000 tons of rice to the EU in 2014 and the government is targeting to export 200,000 tons this year.The EU statistics show that Myanmar's rice exports (both milled and semi-milled) to the EU increased about 120% to around 45,240 tons during September 2014 - April 2015 from around 20,848 tons during the same period last year. The EU imports rice from Myanmar under the Everything But Arms (EBA) agreement at zero percent import duty."An export deal with Myanmar on aromatic rice strains would “create a win-win situation, as we don’t produce them and we want and eat them,” a member of the EU delegation was quoted as saying.Separately, Myanmar rice exporters are planning to attend an exhibition in Milan next month as part of efforts to promote Myanmar rice in Italy and other EU markets. So far, China is the largest export market for Myanmar rice, but the government is keen on diversifying its export market and reduce too much dependence on China.

Government of Guyana Seeks to Extend PetroCaribe Deal with Venezuela

Jun 18, 2015
The government of Guyana is preparing for bilateral talks with the government of Venezuela to extend the oil-for-rice PetroCaribe deal, which is to expire this year, according to local sources. Under the deal Venezuela buys rice from Guyana and sells oil to Guyana.Under the existing agreement, Guyana is expected to sell about 210,000 tons of paddy and polished rice annually to Venezuela. The value of this supply is reportedly $130 million.According to the Minister of State, the government is seeking to extend the PetroCaribe deal with Venezuela at a time when other South American countries are eyeing a major share in the Venezuelan rice market. However, he expressed confidence that the deal could be extended given the long-standing relationship of Guyana with Venezuela. "We believe that because of the length of time that we have been shipping rice to Venezuela market they might have become accustomed to Guyana's rice and we stand a better chance of being able to negotiate a longer term arrangement," he was quoted as saying.
He also noted that the Foreign Affairs Minister will deal this matter with the support of other Ministers.At home, stakeholders of the rice market have been complaining of the government's lethargy in making payments to the farmers. They blame the government for mostly focusing on finding markets for private rice exporters and negotiating prices overlooking internal problems.Recently, there was an uproar about mismanagement of the PetroCaribe fund. The Minister of State noted that the fund was empty and the government needs to arrange about $15 million to pay farmers.The deal is very important for Guyana as it had helped Guyana's rice industry develop significantly with increasing production and exports. It has been providing higher prices compared to other countries' offers. The deal also helped to achieve food security in the Caribbean region.
Guyana produced around 633,000 tons of rice in 2014, up about 18% from around 535,212 tons from 2013; and exported around 501,208 tons of rice in 2014, up about 27% from around 394,000 tons exported in 2013, according to the Agriculture Minister. The Caribbean nation aims to produce about 618,000 tons of milled rice and export around 521,000 tons in 2015.USDA estimates Guyana to produce 650,000 tons of milled rice in the MY 2015-16(January 2015 - December 2015) and export about 500,000 tons in 2015. The FAO estimates Guyana to produce 570,000 tons of milled rice and export around 460,000 tons in 2015.
Global Rice Quotes
June 18th, 2015

Long grain white rice - high quality

Thailand 100% B grade            365-375           ↔
Vietnam 5% broken      345-355           ↔
India 5% broken           365-375           ↔
Pakistan 5% broken     380-390           ↔
Myanmar 5% broken    415-425           ↔
Cambodia 5% broken   430-440           ↔
U.S. 4% broken           450-460           ↔
Uruguay 5% broken     565-575           ↔
Argentina 5% broken   555-565           ↔

Long grain white rice - low quality
Thailand 25% broken   340-350           ↔
Vietnam 25% broken    325-335           ↓
Pakistan 25% broken   335-345           ↔
Cambodia 25% broken             410-420           ↔
India 25% broken         350-360           ↔
U.S. 15% broken         440-450           ↔

Long grain parboiled rice
Thailand parboiled 100% stxd 360-370           ↔
Pakistan parboiled 5% broken stxd      400-410           ↔
India parboiled 5% broken stxd            360-370           ↑
U.S. parboiled 4% broken        555-565           ↔
Brazil parboiled 5% broken      570-580           ↔
Uruguay parboiled 5% broken             NQ       ↔

Long grain fragrant rice
Thailand Hommali 92%             840-850           ↔
Vietnam Jasmine          465-475           ↓
India basmati 2% broken          NQ       ↔
Pakistan basmati 2% broken    NQ       ↔
Cambodia Phka Mails   820-830           ↔

Brokens

Thailand A1 Super       315-325           ↔
Vietnam 100% broken 310-320           ↔
Pakistan 100% broken stxd      295-305           ↔
Cambodia A1 Super     350-360           ↔
India 100% broken stxd           280-290           ↔
Egypt medium grain brokens   NQ       ↔
U.S. pet food   350-360           ↔
Brazil half grain            NQ       ↔


All prices USD per ton, FOB vessel, oryza.com

Government of India Increases 2015-16 Paddy MSP by About 3.6% to $220 per Ton

Jun 17, 2015
Oryza.com - 
The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal by the Commission for Agricultural Costs and Prices (CACP) to increase the minimum support price (MSP) for common paddy during the 2015-16 kharif marketing season (October - September) by about Rs.50 per quintal (around $7.8 per ton) or about 3.6% to around Rs.1,410 per quintal (around $220 per ton), according to local sources.The CCEA has also increased the MSP for Grade A/superior paddy by about Rs.50 per quintal (around $7.8 per ton) or about 3.6% to around Rs.1,450 per quintal (around $226 per ton).
For the 2014-15 kharif marketing season, the government increased the MSP for common grade paddy by about 3.8% to around Rs.1,310 per quintal (around $218 per ton) and increased the MSP for Grade 'A' paddy by about 4% to around Rs.1,345 per quintal (around $223 per ton).Analysts say percentage wise, there has been a steady decline in the paddy MSP hike over the last few years, except for the crop year 2011 when there was no hike. In 2012-13 Kharif marketing season, the government increased the paddy MSP by 15.74%.Meanwhile, amid fears of lower rainfall due to an El Nino weather pattern, the government is reportedly preparing to deal with exigencies which are likely to arise due to a deficient monsoon. The major rice growing states such as Punjab, Haryana, Andhra Pradesh, Telangana, Chhattisgarh and Odisha have so far received excess or normal rainfall since the beginning of the monsoon season on June 1.
USDA estimates India's MY 2015-16 (October - September) milled rice production at 104 million tons, up about 1.5% from an estimated 102.5 million tons in MY 2014-15. It expects India to export around 10.2 million tons of rice during 2015, slightly up from an estimated 10.15 million tons in 2014.

Oryza Afternoon Recap - Chicago Rough Rice Futures Fail to Maintain Morning Momentum and Slide into the Close

Jun 17, 2015
Chicago rough rice futures for Jul delivery settled 7 cents per cwt (about $2 per ton) lower at $9.730 per cwt (about $215 per ton). After trading higher overnight and for the majority of the day session rough rice futures reversed direction and closed lower. The market once again failed at nearby overhead resistance noted around the $9.900 per cwt (about $218 per ton) level and now look poised to trade lower towards the bottom of the current $9.400-$10.000 per cwt (about $207-$220 per ton) trading range. The other grains continued higher today, with impressive gains noted in both the soy and corn pits for the second consecutive day; Soybeans closed about 1.2% higher at $9.6900 per bushel; wheat finished about 0.5% higher at $4.9125 per bushel, and corn finished the day about 1.5% higher at $3.5925 per bushel.
U.S. stocks traded mostly lower on Wednesday as investors digested the Federal Reserve statement. The Federal Open Market Committee concluded its two-day meeting in the afternoon. The statement was due at 2:00 p.m. ET and Fed Chair Janet Yellen is scheduled to hold a press conference at 2:30 p.m. Stocks reversed opening gains to trade lower ahead of the statement release. With consensus for a September rate hike, most investors do not expect major policy changes from the central bank's announcement. U.S. stocks closed higher on Tuesday as the Fed began its two-day meeting and investors attempted to shake off worries about Greece debt talks, which reached an impasse over the weekend. The Dow Jones Industrial Average traded down 48 points, or 0.27%, at 17,854. The S&P 500 traded down 6 points, or 0.28%, at 2,090, with telecommunications leading all 10 sectors lower. The Nasdaq traded down 8 points, or 0.15%, at 5,047. Gold is trading about 0.2% lower, crude oil is seen trading about 1.5% lower, and the U.S. dollar is seen trading about 0.1% lower at about  1:00pm Chicago time.Tuesday, there were 2,162 contracts traded, up from 1,825 contracts traded on Monday. Open interest – the number of contracts outstanding – on Tuesday decreased by 31 contracts to 11,101.

Oryza Overnight Recap – Chicago Rough Rice Futures Capture Overnight Support from Firmer Grain Complex and Weaker Dollar

Jun 17, 2015
Chicago rough rice futures for Jul delivery are currently seen trading 3 cent per cwt (about $1 per ton) higher at $9.830 per cwt (about $217 per ton) ahead of floor trading in Chicago. The other grains are seen trading higher; soybeans are currently seen trading about 0.6% higher, wheat is listed about 1.5% higher and corn is currently noted about 0.6% higher.U.S. stock futures pointed to a flat to slightly higher open on Wednesday, with the spotlight shifting from the crisis in Greece to the Federal Reserve. The U.S. central bank concludes a two-meeting with a statement and new economic and interest rate forecasts at 2 p.m. ET.
Fed chief Janet Yellen holds a 2:30 p.m. press briefing amid talk that the Fed is gearing up for a September interest rate rise as the economy recovers. U.S. stock futures pared early gains, with Dow Jones industrial average futures trading more than 15 points higher during the European morning session. Wall Street shares closed higher on Tuesday as the Fed began its two-day meeting and investors attempted to shake off worries about the Greece debt talks. Later on Wednesday, the European Central Bank is expected to hold a meeting to review emergency funds, known as the Emergency Liquidity Assistance (ELA). Greek banks are reliant on this funding and analysts warn that if the central bank curbs this liquidity, Greece may have no option but to impose capital controls. Gold is currently trading about 0.3% lower, crude oil is seen trading about 1.9% higher,  and the U.S. dollar is currently trading about 0.2% lower at 8:30am Chicago time.

Oryza U.S. Rough Rice Recap - Prices Slip as Window to Market Old Crop Narrows

Jun 17, 2015
The U.S. cash market was slightly weaker today as buyer interest remains limited while those with rice left to sell see their window to market their crop narrow as new crop in South Louisiana approaches harvest late next month.Analysts contend that export demand will have to increase substantially to help make room for new crop and stabilize prices; however, most doubt that tomorrow’s USDA exports sales report will show a significant increase from the last two weeks' sales figures which were tepid, at best.

Thailand, Vietnam Rice Sellers Lower Some of Their Quotes; India Rice Sellers Increase Some of Their Quotes Today

Jun 18, 2015
Thailand rice sellers lowered their quotes for 5% broken rice by about $5 per ton to around $350-$360 per ton today. Vietnam rice sellers lowered their quotes for 25% broken rice and Jasmine rice by about $5 per ton and about $10 per ton to around $325-$335 and $465-$475 per ton, respectively. India rice sellers increased their quotes for parboiled rice by about $5 per ton to around $360-$370 per ton. Pakistan rice sellers kept their quotes mostly unchanged today. 
5% Broken Rice
Thailand 5% rice is indicated at around $350 - $360 per ton, down about a $5 per ton from yesterday and about a $5 per ton premium on Vietnam 5% rice  shown at around $345 - $355 per ton. India 5% rice is indicated at around $365 - $375 per ton, about $15 per ton discount to Pakistan 5% rice shown at around $380 - $390 per ton.
25% Broken Rice
Thailand 25% rice is shown at around $340 - $350 per ton, about a $15 per ton premium on Vietnam 25% rice shown at around $325- $335 per ton, down about a $5 per ton from yesterday. India 25% rice is indicated at around $350 - $360, about $15 per ton premium on Pakistan 25% rice shown at around $335 - $345 per ton.
Parboiled Rice
Thailand parboiled rice is indicated at around $360 - $370 per ton. India parboiled rice is indicated at around $360 - $370 per ton, up about a $5 per ton from yesterday and about a $40 per ton discount to Pakistan parboiled rice shown at around $400 - $410 per ton.
100% Broken Rice
Thailand broken rice, A1 Super, is indicated at around $315 - $325 per ton, about $5 per ton premium on Vietnam 100% broken rice shown at around $310 - $320 per ton. India's 100% broken rice is shown at around $280 - $290 per ton, about a $15 per ton discount to  Pakistan broken sortexed rice shown at around $295 - $305 per ton.

What Are India's Options for Rice Straw Disposal?

Jun 17, 2015
India, the second largest rice producer in the world, produces nearly 130 million tons of rice straw annually. While half of it is used as cattle feed, farmers want economically viable means of disposing the other half, according to an article published in a UK magazine.Unable to find economically lucrative methods, most farmers burn the straw in their fields to quickly get rid of it before the new season begins. However, burning of rice straw is not environmentally safe process as it releases gases such as gases like carbon dioxide, methane, carbon monoxide, nitrogen oxide, sulphur oxide and large amount of particulate matters, which adversely affect human health as well as the environment.
Farmers are yet to realize the importance of rice straw as a form of manure and as a profitable raw material for various industries. In the major rice growing states of Punjab and Haryana, farmers have tried various means of disposing the rice straw while earning them some income.Brick manufacturing companies, power companies, and paper and packaging industries use rice straw as a raw material. But farmers say those industries don't offer decent prices, and considering all rice production costs, they are not sure of assured returns.
Some agricultural specialists have devised a composting technique, which can convert huge piles of rice straw into organically rice soil. However, since the whole process takes about 45 days, farmers have found it very labor-intensive. Similarly, another method called "mulching" was also suggested. In this process, straw is spread across the soil surface and allowed to decompose naturally into the soil by the activity of worms and other organisms. Though some farmers have adopted this process, it has not become very popular.In this backdrop, the author says farmers want quick and easy solutions and they are very much aware of the multiple options available for managing agro-waste. But they will give up burning rice straw only if they receive lucrative returns. The author suggests that the governments could convince farmers to stop burning rice straw and help them earn lucrative returns through international carbon trading.

Philippines May Import 100,000 Tons of Rice at Higher Price from Vietnam

Jun 17, 2015
The National Food Authority (NFA) of the Philippines may consider to import 100,000 tons of 25% broken well-milled long grain white rice from Vietnam at a higher price than its reference price of $408.14 after receiving higher bids twice in the June 16 government-to-government (G2G) tender, according to local sources.On June 16, when the NFA invited bids for the remaining 100,000 tons of the June 5 tender, Thailand offered to sell 100,000 tons at $418 per ton, Vietnam and Cambodia offered at $417 per ton and $464 per ton respectively. The NFA rejected all the bids and asked the bidders to submit revised bids by 07.00 GMT.
However, Thailand backed out of the bidding as the reference price set by the NFA was too low compared to the global prices. On the other hand Vietnam revised its bid to supply 100,000 tons of rice at $416 per ton and Cambodia revised its bid to supply 50,000 tons of rice at $455.5 per ton. Both the bids were still higher than the reference price set by the NFA. However, the NFA is reportedly considering to import rice at the lowest bid rate, which is from Vietnam.Since the NFA has no authority to accept bids that are higher than the reference price, the matter has been referred to the NFA Council, which has set the terms of reference for G2G contracts, according to the Presidential Adviser on Food Security and Modernization (PAFSAM), noted that the decision on imports is pending. He noted that the NFA Council will meet on Wednesday to decide on the matter.
The imports are meant to maintain buffer stocks during the lean season (July - December). The NFA currently holds a buffer stock of 750,000 tons of rice, which is expected to last for 24 days. Since the NFA has to maintain a 30-day buffer stock during lean months, it is dependent on the 100,000 tons imports.
“It’s just that we need to beef up and increase our buffer stock for the lean months in line with our commitment to the government policy that every July 1 we should have at least 30 days. We need to be compliant with our commitment to good governance,” the NFA Deputy Administrator was quoted as saying.



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