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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