Oryza
Overnight Recap – Chicago Rough Rice Futures Little Changed on Light Volume
Overnight
Oct 16, 2015
Chicago rough rice futures for Nov
delivery are currently noted 3.5 cents per cwt (about $1 per ton) higher at
$12.315 per cwt (about $271 per ton) ahead of floor trading in Chicago. The
other grains are seen trading mostly lower overnight; soybeans are currently
seen trading about 0.1% lower, wheat is listed about 0.6% higher and corn is
currently noted 0.2% lower.
U.S. stock index futures indicated
a flat to slightly higher open on Friday, with traders keenly anticipating the
release of economic data for any signs of softness that would reinforce the
pervading view that the Fed is on hold for now. Stocks surged Thursday amid
speculation the Fed would not hike rates until sometime next year, with weak
economic reports feeding that view.
The market got a nudge from a
comment by New York Fed President Bill Dudley, who said he would favor a rate
hike this year, but it depends on the strength of the economy. He then added
that recent data indicates the economy is slowing. On the data front, Friday
will see both industrial production and capacity utilization released at 9:15
a.m. ET, with consumer sentiment and the job openings and labor turnover
survey, or JOLTs, released at 10:00 a.m. In Europe, the pan-European Stoxx 600
index held about half a percent higher ahead of the U.S. market open. In Asia,
Japan's Nikkei finished 1.08% higher, while in China the Shanghai Composite
closed 1.62% higher. Gold is currently trading about 0.3% lower, crude oil is
seen trading about 2% higher, and the U.S. dollar is currently trading about
0.2% higher at 8:30am Chicago time.
India
2015-16 Main Paddy Rice Planting Slows Down as it Nears Completion
Oct 16, 2015
Total area planting to India's
2015-16 Kharif (main) rice crop (June - December) is continuing to lag behind
last year due to poor post-monsoon rains. Total rice planted area stood at
around 37.824 million hectares as of October 16, 2015, slightly down from
around 37.967 million hectares planted during the same time last year,
according to a press release by the Agriculture Ministry.
India received 46% below-average
rainfall as of October 15, according to the Indian Meteorological Department
(IMD). The North-west, Central, North-East and southern regions received 81%,
69%, 54% and 3% below-average rains respectively.
A likely drought-inducing El Nino
this year is expected to lower production prospects in India this year.
Extending drought conditions are already dampening production prospects in
Thailand, Indonesia and the Philippines. Rice prices in Asia are expected to
surge due to expected lower supplies.
The government of India forecasts
2015-16 kharif (June - December) rice production at around 90.6 million tons,
slightly down from around 90.86 million tons in 2014-15.
The total Kharif crop sown area
stands at 103.881 million hectares as on October 16, 2015, up about 1.2% from
around 102.585 million hectares during the same period last year, according to
the Agriculture Ministry.
Pakistan
Banks Unwilling to Roll Over Rice Sector Loans on Blanket Basis, Says SBP
Official
Oct 16, 2015
Commercial banks in Pakistan are
reportedly unwilling to roll over or reschedule rice sector loans on a blanket
basis, local sources quoted the State Bank of Pakistan (SBP) spokesperson.
“Commercial banks are only
accommodating those rice millers, exporters, and rice growers who are having
genuine difficulties in repaying their loans,” said the SBP official.
“The final decision to reschedule
loans is to be taken by the individual banks based on the merit of individual
case. Some cases might have merit issues and banks might be reluctant to
reschedule,” he added.
The Prime Minister announced a
rollover of loans until June 2016 as part of the relief package given to the
sector last month. The commercial banks also agreed to the proposal in a
meeting with the SBP. However, no bank has so far implemented the loan roll
overs. They have been in fact pressurizing millers and farmers to pay loans on
time.
Rice exporters, millers and growers
are already struggling with declining prices and increasing stocks. The country
reportedly has about 500,000 tons of unsold basmati stocks.
If loans are not rolled over, the
rice sector stakeholders fear that their problems would be compounded and the
outcome would be bad for the whole sector, which is a major contributor of the
foreign exchange in the country.
Oryza
Exclusive Interview - India and Pakistan Should Jointly Chart Out a Strategy to
Protect Basmati Prices, Says BGA President
Oct 16, 2015
In an exclusive interview with
Oryza, Mr. Choudhry Hamid Malhi, President of the Basmati Growers’ Association
(BGA) of Pakistan shares his views about the dwindling basmati rice prices both
in India and Pakistan. He also talks about the actions to be taken by the two
governments. Excerpts from the interview….
Oryza: Export prices of Indian basmati are falling since the beginning
of this year due to rising supplies and falling demand. Can the
government be successful in protecting prices with the imposition of MEP?
Mr.Hamid Malhi: MEP is the only way prices of Basmati rice can be stabilised at a
level which is not detrimental to the farmers in particular and the sector in
general.
Oryza: Will the measure really help farmers who are currently not in a
position to even recover production costs? How much MEP do you think would be
optimum?
Mr.Hamid Malhi: The cost of production has risen manifold in the last decade and
there is no other way out but to impose MEP to ensure that at least
Basmati Rice is not exported at throwaway prices below 1000USD. The best strategy
would be to involve the Commerce Ministry of Pakistan in the decision so that
the same is also enforced by Pakistan.
Oryza: Why do you think the Indian government is not taking appropriate
measure to curtail price falls so far?
Mr.Hamid Malhi: Sheer indifference to farmer’s problems.
Oryza: There are doubts whether traders and millers would procure
basmati paddy in the usual manner due to lower export demand especially for the
PUSA 1509 variety. They are already unwilling to buy paddy at the government
MSP. What could be ideal solution in this situation?
Mr.Hamid Malhi: The demand is not low but instead the buyer is enjoying the
benefits of competition amongst the two Basmati growing countries of the world.
Had there been a well thought out MEP joint strategy in place as I had
suggested last year to Chairman APEDA, things would have been much better. Even
now if the two governments join to fight this set back in Basmati prices I
think there is no reason why prices would not recover.
Oryza: What if stocks increase with farmers and millers? What would be
the impact of this development on prices?
Mr.Hamid Malhi: In a scenario where stocks pile up and prices continue to fall it
would be disastrous for the whole sector. This is the third year of this
downfall and all players have lost savings and some are even under debt.
Oryza: Export prices of Pakistan Basmati are also down by about 38% from
their year ago levels. Are the Pakistan basmati prices relatively better than
those of India's?
Mr.Hamid Malhi: They are worse than India and the paddy prices are extremely low
in the absence of any government regulatory mechanism.
Oryza: What else do you think are similar between Pakistan and India
basmati rice sectors?
Mr.Hamid Malhi: India has a much larger production and export of Basmati and thus
has more to lose in the shape of loss in export earnings.
USDA
Estimates 2015 Global Rice Trade to Decline 2% y/y to 42.4 Million Tons
Oct 16, 2015
In its October Rice Outlook report,
USDA forecasts 2015 global rice trade at around 42.4 million tons, down 2% from
an estimated 43.2 million tons in 2014, and unchanged from last month's
forecast. USDA expects a 2 million ton or 18% decline y/y in 2015 Thai rice
exports and weaker shipments from Egypt, but says an increase from other
countries such as India, Pakistan and the U.S. may not fully compensate for
fall in Thai exports.
On the exports side, there were no
major significant revisions, says USDA. On the imports side, USDA lowered
prospects Iraq, Hong Kong, Japan, Russia, Ghana and Mauritius.
USDA estimates global rice trade in
2016 at around 42 million tons, slightly down from last month's forecast of
42.2 million tons and estimated 42.44 million tons in 2015. It lowered 2016
export prospects for India, Myanmar, Cambodia and the U.S., but increased
forecasts for Thailand, Pakistan and Egypt. It lowered 2016 import forecasts
for Iraq, Mexico, Hong Kong, Ivory Coast, Ghana, Mauritius, South Africa and
Tanzania, but increased forecasts for the Philippines.
Japan
Feed-Rice Production to Reach 420,000 Tons in 2015
Oct 16, 2015
Japan's feed-rice output in 2015 is
likely to reach around 420,000 tons, more than double of around 187,000 tons in
2014, Bloomberg quoted a report by the Agriculture Ministry.
The Ministry forecasted in May that
the feed-rice output would reach around 350,000 tons.
USDA estimates Japan to produce
about 10.772 million tons of paddy (around 7.84 million tons, basis milled) in
MY 2014-15 (November - October) and import around 650,000 tons of rice in 2015.
Oryza
Afternoon Recap - Chicago Rough Rice Futures Erase Yesterday's Gains as Bears
Regain Control, Prices Fall over $1/cwt in Two Weeks
Oct 17, 2015
Chicago rough rice futures for Nov
delivery settled 17 cents per cwt (about $4 per ton) lower at $12.110 per cwt
(about $267 per ton). The other grains finished mostly lower today, with only
corn managing to close in the green; Soybeans closed about 0.8% lower at
$8.9825 per bushel; wheat finished about 2% lower at $4.9225 per bushel, and
corn finished the day about 0.3% higher at $3.7675 per bushel.
U.S. stocks traded in a range
Friday amid data releases and continued expectations of a delay in a Fed rate
hike. The major averages held little changed in afternoon trade after briefly
giving up most of their opening gains. Stocks rallied Thursday, with the Dow up
more than 200 points and the Nasdaq jumping more than 1.5%.On the data front,
industrial production declined 0.2% in September, with capacity utilization at
77.5%.
The preliminary read on October consumer
sentiment came in at 92.1. JOLTS showed 5.37 million job openings for August.
In Europe, the pan-European Stoxx 600 index ended 0.6% higher. In Asia, Japan's
Nikkei finished 1.08% higher. In early afternoon trade, the Dow Jones
Industrial Average gained 22 points, or 0.13%, at 17,164. The S&P 500 rose
1 point, or 0.10%, at 2,025, with consumer staples leading five sectors higher
and energy the greatest decliner. The Nasdaq fell 2 points, or 0.06%, at 4,867.
Gold is trading about 0.4% lower, crude oil is seen trading about 1.7% higher,
and the U.S. dollar is seen trading about 0.1% higher about 1:00pm
Chicago time.
Thursday, there were 2,122
contracts traded, down from 4,529 contracts traded on Wednesday. Open interest
– the number of contracts outstanding – on Thursday increased by 98 contracts
to 12,804.
Oryza
Weekly: Global Rice Prices Continue to Increase Amid El Nino Concerns
Oct 17, 2015
The Oryza White Rice Index (WRI), a
weighted average of global white rice export quotes, ended the week at about
$392 per ton, up about $2 per ton from a week ago, up about $1 per ton from a
month ago and down about $65 per ton from a year ago. El Nino seems to have
provided a floor to the global rice market. Forward expectations are that the
price recovery may be flat to slow for a while, no V-shaped price
recovery. The USDA is projecting lower rice production and trade in
2015-16. USDA forecasts 2015-16 global rice production (milled basis) at
around 474 million tons, down about 1% from last year due to an expected
decline in acreage as well as decline in average yields, which are likely to be
affected by adverse weather conditions. It forecasts 2015 global rice trade at
around 42.4 million tons, down 2% from an estimated 43.2 million tons in 2014,
and unchanged from last month's forecast.
Global macroeconomics remains shaky
amid uncertainty over when the U.S. Federal Reserve will raise interest rates,
a move that will likely precede a stronger USD. Expectations for a rate
hike continue to be pushed further out, possibly into 2016 at this point, as
economic data disappoints again and again.
Thailand
Thailand 5% broken rice is today
shown at about $365 per ton, up about $5 per ton from a week ago, up about $25
per ton from a month ago and down about $60 per ton from a year ago. Adverse
weather seems to be supporting prices, but it’s not clear yet how much this
could translate into lower sales.
Rice exports declined sharply in
August after increasing about 7% m/m in July. In August, Thailand
exported about 696,919 tons of rice, about 5% less than in July and about 29%
less than in August 2014.
The military government plans to
seize the assets of the former Prime Minister Yingluck Shinawatra to compensate
the losses incurred by the state under the rice pledging scheme introduced by
her government in 2011.
The government of Thailand has
canceled sales of around 345,472 tons of stockpiled rice made in the auction
conducted on September 29 because prices have increased since the auction.
The government continues to advise
farmers to avoid off-season rice planting since water levels in the reservoirs
are not sufficient for rice farming.
Vietnam
Vietnam 5% broken rice is today
shown at about $360 per ton, up about $10 per ton from a week ago, up about $30
per ton from a month ago and down about $75 per ton from a year ago. Viet and
Indian rice quotes are just behind Thai quotes recovering in recent weeks on
export sales and El Nino concerns.
The Vietnam Food Association this
week reiterated plans to develop a national brand for Vietnam’s rice based on
the jasmine type.
In Cambodia, 5% broken rice is today shown at
about $420 per ton, up about $5 per ton from a week ago, down about $5 per ton
from a month ago, and down about $50 per ton from a year ago.
India
India 5% broken rice is today shown
at about $355 per ton, up about $5 per ton from a week ago, down about $25 per
ton from a month ago, and down about $65 per ton from a year ago. Indian rice
quotes for 5% are $10 per ton behind Thailand but $45 per ton above Pakistan.
El Nino has had little effect on
India’s rice acreage. Total rice planted area stood at around 37.824 million
hectares as of October 16, 2015, slightly down from around 37.967 million
hectares planted during the same time last year.
The USDA Post estimates India’s
rice exports in MY 2015-16 (October-September) to decline to around 9 million
tons, about 30% lower than MY 2014-15 due to anticipated lower production and
tighter domestic supplies.
Pakistan
Pakistan 5% broken rice is today
shown at about $310 per ton, unchanged from a week ago, down about $5 per ton
from a month ago and down about $90 per ton from a year ago.
Commercial banks in Pakistan are
reportedly unwilling to roll over or reschedule rice sector loans on a blanket
basis. They are ready to accommodate those millers, exporters and farmers who
have genuine difficulties in repaying their loans.
The USDA Post estimates Pakistan’s
MY 2014-15 (November-October) rice exports will remain unchanged from last
year’s level of around 4 million tons.
Central & South America
Brazil 5% broken rice is today shown at about $500 per ton, unchanged
from a week and a month ago and down about $100 per ton from a year ago. The
Brazilian paddy rice index maintained by CEPEA reached around 40.32 real per 50
kilograms as of October 12, 2015, slightly up from around 39.94 real per 50
kilograms recorded on October 5, 2015. In terms of USD per ton, the index
reached around $207.33 per ton on October 12, 2015, slightly down from around
$207.45 per ton recorded on October 5, 2015. Month-on-month, the index
has increased about 9% from about 37 real per 50 kilograms on September 13,
2015. In terms of USD, the index increased about 7% during the month.
Experts say that the rice industry
in Paraguay needs to find new markets for its rice exports in order to deal
with declining productivity and prices; traditionally, the country exports 85%
of its rice crop to Brazil.
Five percent broken rice from Uruguay and Argentina is today shown at about $535 per
ton, down about $5 per ton from a week ago and a month ago, and down about $65
per ton from a year ago.
U.S.
U.S. 4% broken rice is today shown
at about $500 per ton, unchanged from a week ago, down about $35 per ton from a
month ago and down about $20 per ton from a year ago.
Chicago rough rice futures for
November delivery faced a steady decline this week, hitting the weekly high on
Monday at $13.065 per cwt (about $288 per ton) before dropping to a weekly low
of $11.990 per cwt (about $264 per ton) on Thursday. Futures then
regained some to finish the week at $12.140 per cwt (about $268 per ton).
Rice growers in California estimate the 2015 output to
decline to around 1.55 million tons, a decrease of about 8% from 1.68 million
tons in 2014.
The USDA’s Organic Agriculture Research
and Extension Initiative has allocated a grant of $555,000 to Washington-based
The Organic Center to enhance organic rice research and boost organic rice
production in the southern regions of the U.S.
The Trans-Pacific Partnership (TPP) deal finalized last week has reportedly ensured that tariffs on
rice imports will eventually be eliminated by the member countries in the next
ten years, according to a statement by the USDA.
Japan, Malaysia, Vietnam and the
U.S. have agreed to alter or gradually remove tariffs on rice imports.
Japan, which has been adamant on increasing duty-free rice imports from
the U.S. has agreed to initially allow 50,000 tons of duty-free rice imports
from the U.S. and gradually increase up to 70,000 tons by thirteenth year. Japan
will reportedly increase imports from the U.S. by 2,000 tons from the fourth
year of the agreement. Japan will also modify its quota administration to
enhance the transparency and effectiveness of the new country specific quota
(CSQ). It has also agreed to immediately eliminate its 36 yen per kilogram
(12.7% ad valorem equivalent) tariff on other animal feeds, containing rice. Malaysia will eliminate tariffs on rice,
currently ranging from 15-40%, in ten years and lock in tariffs on rice
products at zero percent. Vietnam will eliminate its tariffs on rice, which are currently at 40%
with immediate effect. It will also eliminate its tariffs on rice products,
currently as high as 35%, in eight years or before. The U.S. will eliminate tariffs on rice
products, currently as high as 11.2%, in zero to 15 years.
Other Markets
The Philippines may import an additional one
million tons of rice next year in order to maintain adequate stocks and avoid
price hikes, especially with a strengthening El Nino on the horizon.
Rice stocks in the Philippines
declined in September for the fourth consecutive month. Total rice stocks
as of September 1 stood at around 1.96 million tons, down about 12.5% from
August and about 31.5% higher than the same period last year.
The Philippines Statistics Agency
estimates the Philippines paddy rice production in the third quarter
(July-September) of 2015 to decline about 14.8% y/y to 2.579 million tons, down
from its previous forecast of 2.589 million tons.
Rice production in South Korea is estimated to increase about
0.4% y/y to 4.258 million tons due to higher yields. Experts are
concerned that increasing supplies and falling consumption in the country may
lead to a decline in prices domestically.
The governments of Nigeria and Brazil have decided to work together to
enhance agricultural research in Nigeria and boost food production and security
in the country.
The Federal Government of Nigeria
plans to ban rice imports starting in 2017.
Indonesia, which has signed purchase contracts with Vietnam and Thailand to
import rice in case of a need, will decide about the imports in November or
December.
Japan's feed-rice output in 2015 is likely to reach around 420,000 tons,
more than double of around 187,000 tons in 2014
Paddy rice prices in Italy increased sharply in the second
week of October; however, prices are lower than in past years.
Thailand,
India Rice Sellers Alter Some of Their Quotes Today; Other Asian Quotes Remain
Unchanged
Oct 16, 2015
Thailand rice sellers lowered their
quotes for fragrant A1 Super rice variety by about $5 per ton to around $350 -
$360 per ton. India rice sellers lowered their quotes for 5% and 100% rice
varieties by about $5 per ton and $10 per ton respectively to $350 - $360
per ton and $290 - $300 per ton. They increased their quotes for 25% broken
rice variety by about $10 per ton around $325 - $335 per ton. Other Asian rice
sellers kept their quotes unchanged.
5% Broken Rice
Thailand 5% rice is indicated at
around $360 - $370 per ton about $5 per ton premium on Vietnam 5% rice shown at
around $355 - $365 per ton. India 5% rice is indicated at around $350 - $360
per ton, about $45 per ton premium on Pakistan 5% rice shown at around $305 -
$315 per ton.
25% Broken Rice
Thailand 25% rice is indicated at
around $330 - $340 per ton, about 5% discount on Vietnam 25% rice shown at
around $335- $345 per ton. India 25% rice is indicated at around $325 - $335
per ton, about $45 per ton premium on Pakistan 25% rice shown at around $280 -
$290 per ton.
Parboiled Rice
Thailand parboiled rice is
indicated at around $365 - $375 per ton. India parboiled rice is indicated at
around $335- $345 per ton, about $70 per ton discount to Pakistan parboiled
rice last shown at around $405 - $415 per ton.
100% Broken Rice
Thailand broken rice, A1 Super is
indicated at around $305 - $315 per ton, at par with Vietnam 100% broken rice
shown at around $305 - $315 per ton. India's 100% broken rice is shown at
around $290 - $300 per ton, about $15 per ton premium on Pakistan broken
sortexed rice shown at around $275 - $285 per ton.
USDA
Forecasts 2015-16 Global Rice Production to Decline on Lower Acreage and Yields
Oct 16, 2015
In its October 2015 Rice
Outlook report, USDA forecasts 2015-16 global rice production (milled
basis) at around 474 million tons, down about 1% from last year due to an
expected decline in acreage as well as decline in average yields, which are
likely to be affected by adverse weather conditions. USDA's projection is down
from last month's projection of around 475.8 million tons. Southeast Asia,
North Africa, and North America account for most of the expected global rice
production decline in 2015-16.
USDA lowered 2015-16 production
prospects for Thailand, India and the U.S. However, it raised production
forecasts for Tanzania, Madagascar and Kenya.
USDA forecasts 2015-16 global
rice acreage at 159.2 million hectares, down from an
estimated 160.2 million hectares in 2014-15. Thailand is accounting for more
than half of the decline, says USDA. While acreage in Bangladesh and India is
expected to increase, that in Myanmar, Cambodia, Nigeria and the U.S is
expected to decline. USDA forecasts the average global yield at 4.44 tons per
hectare (on rough rice basis), slightly down from 4.46 tons per hectare in
2014-15.
USDA estimates 2015-16 global
rice consumption and residual use at around 487.5 million tons,
up about 1% from last year, and slightly up from last month's forecast of
around 487.4 million tons. China is accounting for more than half the projected
increase in global rice consumption in 2015-16, according to the USDA. It
forecasts consumption to increase in Bangladesh, Brazil, Indonesia, the
Philippines,
Thailand, and Vietnam. On the other
hand, it forecasts consumption to decline in South Korea and the U.S.
The U.S. agency estimates 2015-16 global
rice ending stocks to decline by about 13% y/y to around 88.3
million tons, and down from last month's forecast of around 90.2 million tons.
China, India, Pakistan, Thailand, the United States, and Vietnam account for
the bulk of the projected decline in global ending stocks in 2015-16. USDA
estimates 2014-15 global stocks-to-use ratio at 18.1%, down from last year's
21%.
Global
Rice Quotes
October 19th, 2015
Long grain white rice - high quality
Thailand 100% B grade 365-375 ↓
Vietnam 5% broken 365-375 ↑
India 5% broken 350-360 ↔
Pakistan 5% broken 305-315 ↔
Myanmar 5% broken 415-425 ↔
Cambodia 5% broken 415-425 ↔
U.S. 4% broken 490-510
↔
Uruguay 5% broken 535-545 ↔
Argentina 5% broken 530-540 ↔
Long grain white rice - low quality
Thailand 25% broken 330-340 ↔
Vietnam 25% broken 345-355 ↑
Pakistan 25% broken 280-290 ↔
Cambodia 25% broken 400-410 ↔
India 25% broken 330-340 ↑
U.S. 15% broken 500-510 ↔
Long grain parboiled rice
Thailand parboiled 100% stxd 365-375 ↔
Pakistan parboiled 5% broken stxd 405-415 ↔
India parboiled 5% broken stxd 340-350 ↑
U.S. parboiled 4% broken 590-610 ↔
Brazil parboiled 5% broken 545-555 ↔
Uruguay parboiled 5% broken NQ ↔
Long grain fragrant rice
Thailand Hommali 92% 820-830 ↔
Vietnam Jasmine 475-485 ↑
India basmati 2% broken NQ ↔
Pakistan basmati 2% broken NQ ↔
Cambodia Phka Mails 830-840 ↔
Brokens
Thailand A1 Super 305-315 ↔
Vietnam 100% broken 305-315 ↔
Pakistan 100% broken stxd 275-285 ↔
Cambodia A1 Super 355-365 ↔
India 100% broken stxd 290-300 ↔
Egypt medium grain brokens NQ ↔
U.S. pet food 330-340
↔
Brazil half grain NQ ↔
All
prices USD per ton, FOB vessel, oryza.com
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