Nepal Plans to Launch Three-Year
Paddy Mission to Boost Production, Cut Down Imports
Jun 19, 2015
The government of Nepal plans to launch the first paddy mission from the
fiscal year 2015-16 (August 2015 – July 2016) to boost output and help the
country become self-sufficient in rice production, according to local sources.A
three-year time frame has been set to implement the mission in about 670,000
hectares in 13 Tarai districts. The total planned area will be divided into
five cluster areas—Jhapa, Sunsari and Morang; Bara, Sarlahi and Parsa;
Rupandehi and Kapilvastu; Dang, Banke and Bardia and Kailali Kanchanpur.
The government aims to increase the average yield to around 3.43 tons per
hectare in the first year (i.e, 2015-16) from the current 3.17 tons, and
further increase to 3.57 tons per hectare and 3.66 tons per hectare in the
subsequent two years respectively. It also aims to increase the paddy output
from the current 4.78 million tons to around 4.94 million tons, 5.22 million
tons and 5.4 million tons respectively in the three years.
The Nepalese government is planning
to reduce the imports to around 277,000 tons in the first year, 96,000 in the
second year and become self-reliant in rice or be able to export about 10,000
tons of rice in the third year. Currently, Nepal currently imports about
530,000 tons of rice annually.It has allocated around Rs.100 million (around
$983,478) for the three-year project, but the actual requirement for the
project has to be assessed, the Assistant Spokesperson of the Ministry of
Agricultural Development was quoted. He noted that the targets are not too
ambitious and can be achieved. He added that the government is also planning to
launch “chaite dhan” scheme under which it would plant paddy from mid-March to
mid-April, in areas where there are irrigation facilities.
The official also noted that the
government would support farmers by providing improved varieties of paddy seeds
and subsidies on farm machinery, irrigation and other tools in the selected
areas. It would also train farmers in these areas.The Agriculture Ministry
estimates Paddy production in 2014-15 to decline about 5.71% to around 4.78
million tons from around 5.04 million tons in 2013-14 due to a late monsoon and
untimely rainfall.USDA estimates Nepal’s MY 2014-15 (October 2014 – September
2015) paddy rice production to decline to about 4.655 million tons (around 3.1
million tons, basis milled) from an estimated 5 million tons (around 3.36
million tons, basis milled) in MY 2013-14. It estimates Nepal to import around
350,000 tons of rice in 2015.
Oryza Global Weather Outlook
Jun 19, 2015
In China, heavy rain is expected
across South-eastern and South of the Yangtze River, North-western Guangxi and
Southern Gansu on Friday. Thereafter, heavy rain is expected across
eastern Southwest China, northern South of the Yangtze River during the next
two days.
Light rain is expected across Thailand during next two days. Thereafter,
isolated heavy rain is expected in many parts of Thailand during Monday to
Wednesday.
Scattered showers and thunderstorms are expected across Vietnam on Friday and Saturday.
Heavy rain is expected across west coast in India from Friday to Sunday. Light rain
showers are also expected across plains of northwest India, east and northeast
adjoining central India on Monday and Tuesday.
Weather is expected to remain dry in Pakistan during the next two days.
In Bangladesh, light rain is likely to
occur at a few places over Rangpur, Chittagong & Sylhet divisions and at
one or two places over Rajshahi, Dhaka, Khulna & Barisal divisions
with moderately heavy falls at places over Sylhet division.
Scattered showers and thunderstorms are expected across Indonesia on Friday and Saturday.
In the U.S., scattered showers are
expected across the north and west portion of Delta during today and tomorrow.
Oryza Weekly: Increased Demand
from Philippines, On El Niño Concerns, May Push Up Global Rice Prices
Jun 19, 2015
The Oryza White Rice Index (WRI), a weighted average of global white rice
export quotes, ended the week at about $398 per ton, down about $5 per ton from
a week ago, down about $8 per ton from a month ago and down about $62 per ton
from a year ago.The USDA forecasts 2015-16 global milled rice production to
reach a record high of 481.7 million tons due to higher acreage (a record 161.8
million hectares). The USDA forecasts global rice trade to decline in
2016 to about 42.4 million tons, down about 2% from 2015.
The National Food Authority Council of the Philippines has decided to import 100,000 tons
of 25% long-grain white rice from Vietnam at a higher price than its reference
prices of $408.14 after receiving higher bids twice in the June 16 G2G tender.
The tender was originally planned for 250,000 tons and the NFA imported 150,000
tons of rice from Vietnam under government-to-government (G2G) tender.
The NFA has approved private traders to import up to
805,200 tons of 25% well-milled rice under the WTO minimum access volume to
maintain buffer stocks and avoid potential price spikes amid fears of an
impending El Nino weather pattern.
The agency is authorized to import another 250,000 tons if the El Nino
weather pattern intensifies.A high demand from the Philippines is expected to
push up the global rice prices, which have been subdued since the beginning of
this year due to increased supplies and lower demand.
Thailand
Thailand 5% broken rice is today shown at about $365 per ton, up about $5
per ton from a week ago, down about $10 per ton from a month ago and down about
$20 per ton from a year ago.
Thailand’s Public Warehouse Organization (PWO) has declared about 650,000
tons of rice as rotten, which is not fit for human and animal consumption or
for ethanol production. The rice can, however, be used as fuel in
electricity generation.
Domestic paddy prices are expected to increase by about 10% to 8,500 baht
per ton (around $253) due to reduced supplies from the main crop as well as
potential impact of the El Nino, Bloomberg quoted the Deputy Secretary General
of the Office of Agricultural Economics (OAE) as saying. The OAE is reportedly
expecting the paddy output from the 2015 main crop (which accounts for about
70% of the total output) to drop by 600,000 tons or about 2% to around 26.5
million tons, from around 27.1 million tons from last year. The government has
been instructing famers in 22 provinces of the Central region to delay planting
until July for the main rice crop due to lesser water levels in the reservoirs
of the Cho Phraya river basin. It has decided to cut water supplies to more
than half of the rice land in the region.
Thailand’s third auction for about 1.06 million tons of rice this year has
attracted less interest than the first two auctions.
India
India 5% broken rice is today shown at about $370 per ton, down about $10
per ton from a week ago, down about $5 per ton from month ago, and down about
$70 per ton from a year ago.
Planting for India 2015-16 Kharif (main) rice crop (June - December) which
began on May 8, 2015 is picking up fast and stands at around 833,000 hectares
as of June 19, 2015; up about 1.6% from around 820,000 hectares planted during
the same period last year, and up about 77% from last week’s 471,000 hectares,
according to preliminary data released by the Indian Agriculture Ministry.
According to Bloomberg, India received 11% above normal rainfall as on June
17, providing required support to the kharif rice and other crop plantings.
The government of India approved a proposal to raise the minimum support
price of paddy for the 2015-16 kharif marketing season. The new price is
about 3.6% higher, bringing it to about $220 per ton.
Vietnam
Vietnam 5% broken rice is today shown at about $350 per ton, down about $5
per ton from a week and a month ago and down about $50 per ton from a year ago.
In the period January 1-June 11, Vietnam exported about 2.123 million tons
of rice, down about 29.6% from the first half of 2014. Average rice
export price so far this year stands at around $421 per ton (FOB), down about
2.3% per ton from the same time last year.
Pakistan
Pakistan 5% broken rice is today shown at about $380 per ton, down about $5
per ton from a week ago, down about $20 per ton from a month ago and down about
$65 per ton from a year ago.
Pakistan has exported around 3.71 million tons of rice (around 458,995 tons
of basmati and around 3.25 million tons of non-basmati) in the first eleven
months of FY 2014-15 (July 2014 - June 2015), up about 6% from around 3.49
million tons (around 613,655 tons of basmati and around 2.88 million tons of
non-basmati) exported during the same period in FY 2013-14.
The Rice Dealers Association in Pakistan is urging the government to revive
the Rice Board in order to address various problems faced by the country’s rice
sector. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
has also urged the government to set up a rice development board, which can
address all the issues related to the rice sector
The government of Pakistan is planning to enact a Geographical Indication
Law (GI Law) to bring international distinction to indigenous Pakistan
products, including basmati rice.
Central & South America
Brazil 5% broken rice is today shown at about $550 per ton, unchanged from
a week and a month ago and down about $115 per ton from a year ago.
Brazil’s Conab has forecasted the country’s 2014-15 paddy rice production
at around 12.544 million tons, up about 3.5% from 2013-14.
The Brazilian paddy rice index maintained by CEPEA reached around 33.71
real per 50 kilograms as of June 15, 2015, up about 1.6% from around 33.18 real
per 50 kilograms recorded on June 8, 2015.
In terms of USD per ton, the index reached around $217 per ton on June 15,
2015, up about 2% from around $213 per ton recorded on June 8, 2015.
The government of Guyana is preparing for bilateral talks with the government of Venezuela to
extend the oil-for-rice PetroCaribe deal, which will expire this year.
Under this deal, Venezuela buys rice from Guyana and sells oil to Guyana.
Five percent broken rice from Uruguay and Argentina is today shown at about
$565 per ton, unchanged from a week and a month ago, and down about $60 per ton
from a year ago.
U.S.
U.S. 4% broken rice is today shown at about $455 per ton, down about $15
per ton from a week ago, down about $20 per ton from a month ago and down
about $125 per ton from a year ago.
Other Markets
The European
Union is considering importing aromatic rice from Myanmar as the demand for
aromatic rice in the region is increasing.
The European Farmers’ Union COPA is opposing a mid-term review of the
current EU Common Agricultural Policy, which was approved in 2014 and is valid
until 2020.
The Myanmar Rice Federation (MRF) has
confirmed that the country has sufficient rice stocks to meet the local demand
and the rising rice prices are not because of shortage of stocks. The recent
increase in local rice prices is attributed to increased exports and
appreciation of the U.S. dollar against the kyat.
Iraq has invited international tenders to purchase about 30,000 tons of rice
from the U.S., Uruguay, Argentina, Brazil, and India, with bids due June 28.
The government of Indonesia aims to procure 2 million tons of rice from local farmers during the dry
season (June-mid-December). It has issued a new regulation on basic commodities
prices, which allows the government to anticipate price hikes of certain
commodities such as rice, whose prices peak during the festive seasons
The government of China is taking steps to enhance its grain storage capacity to about 95% of the
total grain output by 2020 in order to ensure grain supply and safety.
North Korea is experiencing its worst drought conditions in a century and about 30% of
its paddy rice acreage has dried up as a result. Representatives from the UN's
Food and Agricultural Organization (FAO) who visited North Korea to assess the
impact of a reported drought on the country's crop production estimated the
country's 2015 paddy production to decline about 12% to around 2.3 million tons
from around 2.6 million tons in 2014.
The boro paddy and rice (January-May) procurement drive in Bangladesh has not provided the expected
respite to farmers in terms of prices. The government is reportedly
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.
The government of Nepal has planned to launch the first paddy mission from the fiscal year 2015-16
(August 2015 – July 2016) to boost output and help the country become
self-sufficient in rice production and cut down imports.
The UN’s FAO estimates Madagascar’s 2015 paddy rice production will be below-average due to erratic rainfall
and dry conditions.
The UN’s FAO has agreed to support the rice sector in Zambia under its technical cooperation
program.
Oryza Afternoon Recap - Chicago
Rough Rice Futures End Week on Bearish Note as Negative Grains Exert Downward
Pressure
Jun 19, 2015
Chicago rough rice futures for Jul
delivery settled 9.5 cents per cwt (about $2 per ton) higher at $9.720 per cwt
(about $214 per ton). Rough rice futures erased yesterday’s gains and once
again moved lower, adding to losses sustained earlier in the week. The market
remains range bound and will technically remain so until either support at
$9.400 per cwt (about $207 per ton) is breached or resistance at $10.000 per
cwt (about $220 per ton) is taken out. The other grains finished the day mostly
lower, with wheat being the only contract to manage to finish with a slight
gain; Soybeans closed about 0.6% lower at $9.7150 per bushel; wheat finished
about 0.1% higher at $4.8850 per bushel, and corn finished the day about 1.3%
lower at $3.5325 per bushel.
U.S. stocks traded mildly lower on
Friday following the Nasdaq's record close as investors eyed developments in
the Greece debt talks. At an emergency summit on Monday, euro zone officials
are expected to discuss how to handle a Greek default if no new Greek reform
proposals arrive, Reuters reported.
Athens has said without further aid,
it will be unable to make a 1.5 billion euro ($1.7 billion) debt payment to the
International Monetary Fund due on June 30. Meanwhile, large deposit outflows
from Greece have raised concerns that Athens may have to implement capital
controls. The European Central Bank expanded emergency funding for Greek banks
as savers pulled out 1.2 billion euros in a single day on Friday, bankers said
in a Reuters report, but Prime Minister Alexis Tsipras insisted the nation's
future in the euro was secure. Friday also marks quarterly expirations, which
will likely add some volatility. The major averages remain on track for weekly
gains of about 1% or more. The Dow Jones Industrial Average traded down 57
points or 0.31%, at 18,058. The S&P 500 traded down 7 points, or 0.33%, at
2,114, with energy leading seven sectors lower and health care leading
advancers. The Nasdaq traded down 17 points, or 0.30%, at 5,119. Gold is
trading nearly flat, crude oil is seen trading about 2.1% lower, and the U.S.
dollar is seen trading at about even at about 1:00pm Chicago time.Thursday,
there were 1,632 contracts traded, down from 2,137 contracts traded on
Wednesday. Open interest – the number of contracts outstanding – on Thursday
decreased by 331 contracts to 10,453
Government of Thailand Expects
Domestic Paddy Prices to Increase About 10% Due to Drought
Jun 19, 2015
The domestic prices of paddy are
expected to increase by about 10% to 8,500 baht per ton (around $253) due to
lesser supplies from the main crop as well as potential impact of the El Nino,
Bloomberg quoted the Deputy Secretary General of the Office of Agricultural
Economics (OAE).The OAE is reportedly expecting the paddy output from the 2015
main crop (which accounts for about 70% of the total output) may drop by
600,000 tons or about 2% to around 26.5 million tons, from around 27.1 million
tons from last year. The government has been instructing famers in 22 provinces
of the Central region to delay planting until July for the main rice crop due
to lesser water levels in the reservoirs of the Cho Phraya river basin. It has
decided to cut water supplies to more than half of the rice land in the region.
Of the 1.184 million hectares of
rice land in the region, about note that about 4 million rai (around 640,000
hectares) is reportedly unaffected by the reduction in water supplies.However,
farmers in the affected regions are not happy with the government's
instructions since some of them had already invested in land preparation and
other initial work. The Leader of the Farmers Association noted that since
agriculture is livelihood for many of the farmers. He demanded a compensation
of about 3,000 baht per rai (around $557 per hectare) for farmers in the
affected 22 provinces, as well as a three-year debt moratorium including
interest as farmers will not be able to earn sufficiently if they are not
allowed to grow crops.
Some farmers are also planning to go ahead with their plans and take a
risk.USDA estimates Thailand to produce 28.4 million tons of paddy rice (around
18.75 million tons, milled basis) and export around 11 million tons of rice in
MY 2014-15 (January - December 2015).
Indonesia Issues New Regulation
on Basic Commodities Prices
Jun 19, 2015
The government of Indonesia has
issued a new regulation on basic commodities prices, which allows the
government to anticipate price hikes of certain commodities such as rice, whose
prices peak during the festive seasons, according to local sources.The regulation
will allow the government to ensure adequate supplies and regulate the prices
of key commodities such as rice, soy, red chilli, shallots, sugar, cooking oil
and flour, as well as livestock including meat, chicken, eggs and fish, in
certain situations where price fluctuations are expected to occur.
It was signed by the President on
June 15 in order to ensure adequate supplies during the festive month of Idul
Fitri as well as curb price fluctuations, a Presidential Communications team
member was quoted as saying. Usually demand surges considerably during the
month of Ramadhan.
"This regulation gives the
authority to the government to set special prices ahead of, on, or after
religious holidays or during periods of price volatility," said the
official. The government is currently waiting for the price ceiling regulation
from the Finance Ministry. The Trade Ministry is expected to deal with the
technical aspects of the regulation implementation, said the official. It
also bans stockpiling of these commodities in times of scarcity and price
fluctuations.Owing to price hikes of important commodities, Indonesia's annual
inflation rate increased to a five-month high of 7.15% in May.
Average rice prices have also been increasing
since September 2014 and have reached record levels in March 2015. However,
since April, prices reversed direction due to the government intervention as
well as increased supplies from the 2015 main season rice crop. In June
2015, average rice prices stood at around 9.894 million Rupiah (around $740)
per ton, up about 12% from their year ago levels.Some analysts noted that the
policy is good from the customer point of view as it aims at maintaining
price stability, but seems to be a hugely interventionist policy from the
businesses point of view.Meanwhile, the Head of Distribution and Stockpile
at Agriculture Ministry's Food Sufficiency agency told local sources
that Indonesia may have about 10.9 million tons of rice surplus in 2015
according to Bloomberg. He also noted that current rice stocks would be
sufficient for the June-July period of Ramadan and Eid al-Fitr.
Indonesia's new President who took
over in October this year is keen on achieving self-sufficiency in basic food
items such as rice, corn and sugar over the next four years. He is particularly
keen on avoiding rice imports. So far, the government has not imported any rice
this year. But analysts say less stocks and lower production due to El Nino
weather pattern could prompt the government to import rice in the second half
of the year.USDA estimates Indonesia to produce around 36.3 million tons of
rice, basis milled (around 57.17 million tons, basis paddy), and import around
1.25 million tons of rice in MY 2014-15 (October - September).
FAO Estimates North Korea’s 2015
Rice Production to Decline 12% y/y to 2.3 Million Tons Due to Drought
Jun 19, 2015
Representatives from the UN's Food and Agricultural Organization (FAO) who
visited North Korea to assess the impact of a reported drought on the country's
crop production estimated the country's 2015 paddy production to decline about
12% to around 2.3 million tons from around 2.6 million tons in 2014, according
to Reuters.Based on preliminary information gathered from the government and
farmers, the FAO noted that there is a "severe contraction" in the
supply of rice seeds in the country.
They noted that drought conditions coupled with inefficient management of
irrigation canals and other farm infrastructure has been worsening the crop
production scenario.The official Korean Central News Agency (KCNA) reported
earlier this week that North Korea is experiencing worst drought conditions in
a century and about 30% of the country's rice land has dried up. According to
the agency, water level of reservoirs is very low and rivers and streams are
also drying up.
Official sources have predicted that the production of rice would 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.In May this
year, the FAO reported that food insecurity in North Korea is high and number
of hungry people in the country has more than doubled to around 10.5 million
between 1990 and 2014.
K-Pop Fans Donate Rice
Jun 19, 2015
Fans of K-pop (Korean pop) band 2AM
recently used rice to show their appreciation for singer and musical actor Jo
Kwon. Kwon is starring in a new musical called Chess, and his
fans sent out many sacks of rice to donate in celebration of the premiere of
the play, which starts June 19. The sacks of rice were sent to the Sejong
Center Grand Theater in Seoul, where the play will be showing.
Kwon showed his approval of the act
by uploading a photo of the donated rice to his Instagram account.This isn’t
the first time K-pop fans have used rice donations to show their gratitude for
the musicians – fans of band Big Bang rounded up 12.7 tons of rice donations in
2012, and fans of Super Junior-M donated 1.3 tons of rice earlier this
year. These “fan-rice towers” are common in Korea, where fans donate rice
to their favorite musicians who then donate the rice to charitable
institutions.
Image Source: Instagram, @kwon_jo
Pakistan Rice Exports Continue
to Decline for Second Consecutive Month in May 2015
Jun 19, 2015
Pakistan's total exports declined
sharply in May 2015, continuing to decline for the second consecutive month
after increasing about 33% m/m in March 2015.Pakistan exported around 263,044
tons of rice (including basmati and non-basmati) in May 2015, down about 27% from
around 360,446 tons exported in April 2015, according to provisional data from
the Pakistan Bureau of Statistics (PBS). In terms of value, Pakistan's rice
export earnings declined about 16% to around $152 million in May 2015 from
around $180 million earned in April 2015.
Year-on-year, Pakistan’s exports
increased about 11% from around 236,843 tons exported in May 2014. In terms of
value, they declined about 7% from around $163 million in May 2014.Pakistan
exported around 30,944 tons of basmati rice in May 2015, down about 10% from
around 34,568 tons exported in April 2015, and down about 57% from around
72,573 tons exported in May 2014. In terms of value, Pakistan's basmati rice
exports earned $38.3 million in May 2015, down about 10% from around $42.5
million earned in April 2015, and down about 57% from around $88 million earned
in May 2014.
Pakistan exported around 232,100
tons of non-basmati rice in May 2015, down about 29% from around 325,878 tons
exported in May 2015 and up about 41% from around 164,270 tons in May 2014. In
terms of value, Pakistan's non-basmati rice exports earned $114 million in May
2015, down about 17% from around $137.5 million earned in April 2015, and up
about 53% from around $74.63 million earned in May 2014. 
Pakistan has exported around 3.71
million tons of rice (around 458,995 tons of basmati and around 3.25 million
tons of non-basmati) in the first eleven months of FY 2014-15 (July 2014 - June
2015), up about 6% from around 3.49 million tons (around 613,655 tons of
basmati and around 2.88 million tons of non-basmati) exported during the same
period in FY 2013-14. In terms of value, Pakistan's exports earned around
$1,902 million (around $487 million from basmati and around $1,415 million from
non-basmati) in July 2014 - May 2015, down about 5.5% from around $2,013
million (around $703 million from basmati and around $1,310 million from
non-basmati) earned during the same period in 2013-14.
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