Tuesday, September 15, 2015

15th September,2015 Daily Exclusive ORYZA Rice E-Newsletter by Riceplus Magazine



Bangladesh Rice Farmers Face Double Whammy with Lower Prices and Higher Supplies

Sep 14, 2015
Bangladesh rice farmers are not happy despite the country achieving record 34.708 million tons production (milled basis) in FY 2014-15 (July - June) due to prevailing low prices, according to local sources.
They say the current prices are not even sufficient to cover their production costs. Most of the farmers are receiving Tk 460 per 40 kilograms (around $145 per ton) for hybrid and high-yielding varieties, about 20% lesser than the production costs.
Farmers have been complaining of lower prices since April this year due to increased local production and higher imports from India. The country reportedly imported about 1.45 million tons of rice during FY 2014-15, about four times more higher than in 2013-14, despite a record production due to prevailing low global rice prices, according to the Ministry of Food. They told local sources that the total availability of rice has crossed the local consumption demand of around 3 million tons and has put a downward pressure on prices.
Also farmers and traders are mainly concerned that increased imports have lowered demand for local rice further pushing down the prices. Average price of coarse rice currently stands at around Tk 30-34 per kilogram (around $377-$428 per ton), compared to around Tk 32-37 per kilogram (around $402-$465 per ton) in April this year and around Tk 35-38 per kilogram (around $440-$477 per ton) during the same time last year, according to data from Trading Corporation of Bangladesh.
They noted that the imposition of 10% duty on rice imports did not provide the desired effect as the Indian suppliers lowered their rates. They are expecting the current floods that are affecting some rice growing areas to push up the prices to some extent. 
Floods that are a result of heavy rains have damaged more that 260,000 hectares of Aman crop land, local sources quoted the Department of Agricultural Extension (DAE). Farmers are reportedly encouraged to grow flood-tolerant rice varieties such as BRRI dhan51, BRRI dhan52, BINA dhan11 and BINA dhan12 to ensure that the production is not impacted.
USDA estimates Bangladesh’s MY 2015-16 (July 2015 – June 2016) milled rice production at around 35 million tons, slightly up from an estimated 34.5 million tons in MY 2014-15. It estimates Bangladesh to import around 1.2 million tons of rice in 2015.   

USDA Estimates U.S. 2015-16 All Rice Supplies to Decline on Lower Production

Sep 14, 2015
In its September World Agricultural Demand and Supply Estimates (WASDE) report, USDA estimates U.S. 2015-16 all rice supplies at around 11.95 million tons, down from its last month’s forecast of 12.63 million tons and down from 12.56 million tons in 2014-15 due to expected lower production. While U.S. long-grain rice supply estimates are lowered 8.16 million tons, the U.S. short and medium grain rice supply estimates are increased to 3.71 million tons, from last month.
USDA estimates U.S. all rice production (milled basis) at around 8.6 million tons, down from last month's estimate of 9.3 million tons and down from last year's 10.02 million tons due to an expected reduction in yield.  Long-grain rice production is estimated at around 5.96 million tons, down from last month's estimate of 6.76 million tons; and short- and medium- grain production is estimated at around 2.63 million tons, up from last month's estimate of 2.54 million tons. Average yield is estimated at around 8.27 tons per hectare down from last month's estimates of 8.41 tons per hectare and down from last year's 8.52 tons per hectare.
The agency estimates U.S. 2015-16 all rice beginning stocks at around 2.2 million tons, down from last month's estimates of 2.17 million tons and up from last year's 1.44 million tons. USDA estimates U.S. 2015-16 all rice use at around 10.07 million tons, down from last month's estimates of around 10.7 million tons due to an estimated decline in domestic & residual use. It estimates domestic & residual use of all rice at around 5.67 million tons from last month's estimates of around 5.85 million tons due to an expected decline in supplies. While Long-grain consumption estimates are lowered to around 4.22 million tons, combined medium- and short-grain consumption estimates are increased to around 1.45 million tons.
USDA expects  U.S. 2015-15 all rice imports to remain unchanged from last month's forecast. However, it estimates all rice exports at around 4.4 million tons, down from last month's estimates of 4.85 million tons. While long-grain export estimates are lowered to 2.9 million tons from last month's 3.36 million tons, estimates for combined medium- and short-grain exports are kept unchanged. It estimates 2015-16 all rice ending stocks at around 1.88 million tons down from last month's forecast of 1.92 million tons and down from last year's 1.95 million tons.

Indonesia Rice Prices Surge Due to Extending Drought Conditions

Sep 14, 2015
Indonesian domestic rice prices are increasing on concerns of lower production due to extending drought conditions induced by the El Niño weather phenomenon , according to local sources. Rice prices have increased during the last few weeks in all the rice producing regions, including West Java, East Java, Central Java, North Sulawesi and Gorontalo.
The Meteorology, Climatology and Geophysics Agency (BMKG) predicts that the El Niño weather phenomenon will extend Indonesia’s dry season, which normally takes place between April and September, until November, and is likely to affect 18 of the country’s 34 provinces.
Meanwhile, the state Logistics Agency Bulog's Procurement Director told local sources that the agency's rice stocks are also affected by the drought. He noted that farmers are reluctant to sell their output to the agency and are preferring to store the stocks. Bulog's prices are lower than the market prices and are not attractive to them, he added.
He, however, noted that Bulog currently has 1.7 million tons of rice, which would be sufficient to meet the country's consumption demand until the end of this year.
The government is keen on achieving self-sufficiency in rice production this year and avoid imports. In the first week of this month, the Indonesian Agriculture Ministry Secretary General reiterated that the country's rice production is safe despite the on-going dry weather conditions due to the El Nino weather pattern. He told reporters that the Ministry is expecting a 7% y/y increase in paddy rice production to around 75.2 million tons in 2015 from around 70 million tons in 2014.

According to the UN's Food and Agriculture Organization (FAO), Indonesia's domestic rice prices have been increasing since April this year. In August, average rice prices stood at around 10.14 million Rupiah per ton (around $740), up about 12% from their year-ago levels of around 9.06 million Rupiah per ton (around $770) during the same time last year.  

Oryza U.S. Rough Rice Recap - Prices Continue to Firm as Sellers Stay on Sidelines

Sep 14, 2015
The U.S. cash market was firmer again today with offers increasing lockstep with the futures market however many buyers are reluctant to pay these higher prices, especially as the harvest picks up on Arkansas.
Analysts note that many farmers in Arkansas and Missouri are not sellers at any level as they wait and assess the size and quality of their crop while news that the U.S. and China are closer to signing a phytosanitary protocol has many in Louisiana and Mississippi sitting on their hands waiting to what comes of this agreement.
In the meantime, the USDA estimates that as of September 13th, 44% of the crop had been harvested which was 9% ahead of this time last year and on par with the previous 5-year average. As of now, the USDA estimates that 41% of the rice crop in Arkansas had been harvested compared to , 10% in California, 94% in Louisiana, 45% in Mississippi, 8% in Missouri, and 93% in Texas.
The USDA estimates that 62% percent of the crop is in good to excellent condition, which was 3% worse than last week and 12% worse than this time last year. As of now, the USDA estimates that 60% of the crop in Arkansas is in good to excellent condition compared to, 65% in California, 61% in Louisiana, 74% in Mississippi, 61% in Missouri, and 51% in Texas.

Pakistan Exporters Seek Government Protection of Rice Export Trade

Sep 14, 2015
A delegation from the Rice Exporters Association of Pakistan (REAP) met with the Prime Minister last week and presented him a list of demands on behalf of the rice sector, according to local sources.
The REAP members particularly sought government support in protecting the rice export trade as it is the highest foreign exchange earner. They noted that revenue from rice exports increased from around $300 million to a staggering $2 billion during the last 10-12 years. They urged the government to focus on increasing basmati rice exports to Iran and Saudi Arabia; and increasing non-basmati rice exports to China, Indonesia and the Philippines. They also sought General Scheme of Preferences (GSP) status to the rice sector. They demanded that the government should give direct subsidies to the exporters in order to encourage them to export rice at competitive prices.
The delegation urged the government to reduce withholding tax on rice to 0.25% from the existing 1% as well as withdraw tax on local purchase of rice. They also sought provide certain concessions, including reduced load-shedding of electricity and zero per cent General Sales Tax, to rice milling plants. They requested for non-intervention of the Trading Corporation of Pakistan and Pakistan Agricultural Storage and Services Corporation (Passco) in rice trade.
Finally, they demanded for privatization the Rice Research Institutes (RRI) to enable them to come up with more rice varieties and innovative technologies, which would in turn help farmers to reduce input costs and increase yields.

Nepal Rice Traders Seek Government Intervention to Curb Imports

Sep 14, 2015
Nepal rice traders and millers are facing a hard time due to increasing rice imports from India, especially through land borders, according to local sources.
Traders told local sources that Nepal has been flooded with cheap Indian rice since the government of India has lifted the ban on non-basmati rice exports in September 2011. They noted that Indian rice is cheaper by about Rs.50-100 per quintal (around $0.46-$0.92 per ton) compared to domestic rice.
They noted that the local rice output is sufficient to meet 70% of the country's consumption demand. The remaining 30% can be imported by the government through official shipments. Since increasing imports are hurting the local rice sector, the traders urged the government to allow for only required imports to fulfil the 30% deficit in the domestic market.
The traders also noted that the lower agriculture reform charge on rice imports has also encouraged more imports. They are demanding that the government hike the agriculture reform charge from the current 8% to 10% to curb imports. They also urged the government to enhance the existing 5% charge on paddy imports.
Nepal reportedly imported rice worth Rs.24.75 billion (around $231 million) in the fiscal year 2014-15 (August - July), up about 43% from around Rs.17.26 billion (around $161 million) during FY 2013-14. The increase is attributed to poor summer harvests. The country's paddy output has declined by about 258,435 tons or about 5.1% to around 4.78 million tons in this fiscal year due to a late monsoon and untimely rainfall, according to the Agriculture Ministry.
The Agriculture Ministry's plans to reduce rice import bill by about two-thirds to about Rs.6 billion (around $56 million) in FY 2014-15 has miserably failed, according to experts. They are expecting the imports to increase in FY 2015-16 as droughts in most of the Tarai districts, the country’s food basket, have affected paddy transplantation. Rice import value is expected to cross Rs.40 billion (around $373 million) next fiscal year.
USDA estimates Nepal to import around 400,000 tons of rice in 2015. It 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



Thailand and Vietnam Rice Sellers Lower Some of Their Quotes; Other Asian Quotes Unchanged

Sep 14, 2015
Thailand rice sellers lowered their quotes for 100% broken rice, 5% broken rice and 25% broken rice by $5 per ton each to around $350-$360 per ton, $335-$345 per ton and $325-$335 per ton respectively today. Vietnam rice sellers lowered their quotes for Jasmine rice by about $5 per ton to around $445-$455 per ton. Other Asian rice sellers kept their quotes unchanged today. 
5% Broken Rice
Thailand 5% rice is indicated at around $335 - $345per ton, about $5 per ton lower from around $340-$350 per ton on Friday and about $15 per ton premium on Vietnam 5% rice shown at around $320 - $330 per ton. India 5% rice is indicated at around $375 - $385 per ton, unchanged from Friday and about $60 per ton premium on Pakistan 5% rice shown at around $315 - $325 per ton.
25% Broken Rice
Thailand 25% rice is shown at around $325 - $335 per ton, about a $5 per ton premium on Vietnam 25% rice shown at around $320- $330 per ton. India 25% rice is indicated at around $340 - $350 per ton, about $50 per ton premium on Pakistan 25% rice shown at around $290 - $300 per ton.
Parboiled Rice
Thailand parboiled rice is indicated at around $345 - $355 per ton, unchanged from Friday. India parboiled rice is indicated at around $360- $370 per ton, unchanged from Friday and about $55 per ton discount to Pakistan parboiled rice last shown at around $415 - $425 per ton.                             
100% Broken Rice
Thailand broken rice, A1 Super, is indicated at around $305 - $315 per ton, about $5 per ton from premium on Vietnam 100% broken rice shown at around $300 - $310 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.

Thailand May Ban Planting for Second Crop in 2.4 Million Hectares of Rice Land

Sep 14, 2015
Thailand's Agriculture Minister is likely to impose a ban on second crop planting in about 2.4 million hectares of rice land as intensity of water shortages is higher than expected, according to Reuters.
He will reportedly intimate the cabinet about his decision on September 15. He told local sources that by the end of rainy season, on October 31, water levels in reservoirs would reach only 3.6 million cubic meters that are inadequate for farming activity. He may also propose to set uo a national committee to manage the situation.
The ban would force farmers from giving up rice growing during most of the 2015 crop year, say local sources. The total unplanted area, including the 139,200 hectares in the main crop season, would reach around 2.54 million hectares.
He noted that some farmers had ignored government orders and carried out rice farming in the main crop season. This time, the government is planning instruct all the ministries to involve in the situation and help farmers in raising alternate income.
However, farmers are disappointed with the government's stance. The Chairman of the Central Agricultural Committee noted that the decision is a blow to the farmers who are already in debts.   

U.S. & China to Sign Rice Protocol Agreement

Sep 14, 2015
HOUSTON, Texas (September 14, 2015) – Officials from the United States and the Peoples’ Republic of China will sign a phytosanitary protocol during the week of September 21st when Chinese President Xi Jinping leads a delegation on an official visit to Washington, DC.  Culminating an effort that reaches back more than 15 years, the US Rice Producers Association (USRPA) has been pushing to open the Chinese market to U.S. rice.
In those intervening ten years, China has switched from being a rice exporter to (in recent years) importing two million tons or more of long grain rice. Vietnam has been the origin of most of the Chinese imports, due to a combination of price, proximity, and quality. The U.S. has not been permitted to ship to China because rice was not included in the original negotiations that resulted in the sale of millions of tons of soybeans and cotton and other grains. That now changes with the new phytosanitary protocol.
USRPA applied for funding from USDA/FAS under their Emerging Markets Program to travel to China to determine if there would be demand for U.S. long grain milled rice should it ever be permitted. Over the years, consumer preferences were recorded and analyzed, and the conclusion was obvious — rice milled in the United States would be considered a preferred product deserving of a premium price in the opinion of the growing consumer class in China. In recent years, medium grain rice from both the South and California has been included in these consumer surveys, and the result is the same: “When can we buy it?”
A number of importers and distributors in China have been identified, and it is likely that the newly-permitted trade will get off to a fast start. It is not clear how large the trade could become once the logistics and the commercial terms are perfected, but China could represent a significant boost to the U.S. rice market, which recently has been slammed by the loss of markets and low-priced subsidized foreign competition.
“This has been a long and exhaustive process and sometimes that’s the nature of international market development, while I must compliment the USRPA staff and its board members including past Chairmen, B.J. Campbell of Missouri and Ray Stoesser of Texas, who along with officials of the Foreign Agricultural Service and Animal Plant Health Inspection Service of the USDA, have not hesitated in pursuing this effort that is so important to our rice farming and milling industry,” says Dwight Roberts, President & CEO of the organization.  “Our analysis of the China market goes back to 1998 when at the time no one thought China would ever be a significant importer,” added Roberts.
Recently elected Chairman, Tommy Turner from El Campo, Texas who has plans to travel next month to China is excited about the outlook saying, “our focus has already turned towards working with the identified Chinese buyers and importers while continuing to conduct additional promotional surveys of Chinese consumers,” while adding, “this is great news for our farmers and is a shot in the arm for the market that is so sorely needed."
The US Rice Producers Association, representing rice producers in Arkansas, California, Louisiana, Mississippi, Missouri and Texas, is the only national rice producers’ organization comprised by producers, elected by producers and representing producers in all six rice-producing states.
Global Rice Quotes

September 15th, 2015
Long grain white rice - high quality
Thailand 100% B grade          350-360          
Vietnam 5% broken    320-330          
India 5% broken         375-385          
Pakistan 5% broken    315-325          
Myanmar 5% broken   415-425          
Cambodia 5% broken             420-430          
U.S. 4% broken           530-540          
Uruguay 5% broken    535-545          
Argentina 5% broken 530-540          

Long grain white rice - low quality
Thailand 25% broken 325-335          
Vietnam 25% broken 315-325          
Pakistan 25% broken 290-300          
Cambodia 25% broken           405-415          
India 25% broken       340-350          
U.S. 15% broken         500-510          

Long grain parboiled rice
Thailand parboiled 100% stxd            345-355          
Pakistan parboiled 5% broken stxd    415-425          
India parboiled 5% broken stxd         360-370          
U.S. parboiled 4% broken       570-580          
Brazil parboiled 5% broken    545-555          
Uruguay parboiled 5% broken            NQ     

Long grain fragrant rice
Thailand Hommali 92%          810-820          
Vietnam Jasmine         445-455          
India basmati 2% broken        NQ     
Pakistan basmati 2% broken   NQ     
Cambodia Phka Mails             830-840          

Brokens
Thailand A1 Super      305-315          
Vietnam 100% broken            310-320          
Pakistan 100% broken stxd    275-285          
Cambodia A1 Super   355-365          
India 100% broken stxd         300-310          
Egypt medium grain brokens NQ     
U.S. pet food 335-345          
Brazil half grain          NQ     
All prices USD per ton, FOB vessel, oryza.com


Oryza Afternoon Recap - Chicago Rough Rice Futures Continue to Rally on Support from Firmer Grain Prices and News of Progress towards Trade with China

Sep 14, 2015
Chicago rough rice futures for Nov delivery settled 16.5 cents per cwt (about $4 per ton) higher at $12.995 per cwt (about $286 per ton). The other grains finished the day higher as a result of follow-thorough buying following last week’s USDA S&D update; Soybeans closed about 1.1% higher at $8.8425 per bushel; wheat finished about 3.4% higher at $4.0125 per bushel, and corn finished the day about 1.7% higher at $3.9350 per bushel.
U.S. stocks traded mostly lower Monday as investors weighed mostly negative stock performance overseas and eyed the Federal Reserve meeting later in the week. The major averages opened a touch higher but failed hold slight gains. The Dow Jones industrial average traded about 90 points lower after briefly falling 100 points. The Federal Open Market Committee is scheduled to meet Wednesday and Thursday and could raise short-term interest rates for the first time in more than nine years. No major U.S. economic releases or earnings are due Monday. The week's key data include retail sales and industrial output for August on Tuesday. Materials fell more than 1% as the greatest decliner in the S&P 500. The major averages ended last week more than 2 percent higher, with the Dow Jones industrial average posting its best week since the one ended March 20. The S&P 500 and the Nasdaq composite had their best weeks since the one ended July 17. European stocks closed narrowly mixed on Monday, following declines in Asian stocks. In midday trade, the Dow Jones Industrial Average declined 75 points, or 0.46%, at 16,360. The S&P 500 traded down 10 points, or 0.50%, at 1,951, with energy leading nine sectors lower and utilities the only advancer. The Nasdaq traded down 22 points, or 0.46%, at 4,800. Gold is trading about 0.4% higher, crude oil is seen trading about 1.6% lower, and the U.S. dollar is seen trading about 0.1% higher about  1:00pm Chicago time.
Friday, there were 1,106 contracts traded, down from 1,172 contracts traded on Thursday. Open interest – the number of contracts outstanding – on Friday increased by 268 contracts to 10,338.




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