18th November,2015 Daily Exclusive ORYZA Rice E-Newsletter by Riceplus Magazine

India Rice Procurement Receives Good Response in KMS 2015-16, Say Food Ministry Officials

Nov 17, 2015

Rice procurement, by the Food Corporation of India (FCI) and state government agencies, for the kharif marketing season (KMS) 2015-16 (October - September), which began on October 1, 2015 has received a good response from Indian farmers, according to the Financial Express.Procurement has been reasonably good despite a likely lower output this year due to below-average monsoon rains, according to some Food Ministry officials.The FCI and the government agencies together have procured around 12.22 million tons of rice as of November 16, 2015, up about 25% from around 9.7 million tons procured during the same period last year.

FCI officials told reporters that the higher procurement of rice can be attributed to a decline in prices of common variety of rice in various markets across the country. “The farmers prefer to sell their grain to agencies rather than giving it the private traders in Punjab and Haryana,” they were quoted.

In Punjab, which contributes the highest volume of rice and wheat to the central pool, the FCI and the state agencies have procured around 8.3 million tons of rice (milled equivalent of paddy) so far, compared to around 7.5 million tons procured last year. Agencies have procured around 2.8 million tons of rice (milled equivalent of paddy) compared to around 2.3 million tons last year. They reportedly procured 170,000 tons, 200,000 tons and 76,933 tons from Uttar Pradesh, Telangana and Kerala respectively.

Procurement is yet to begin in the states of Chhattisgarh, Odisha, West Bengal and Assam. The government of India fixed the minimum support price (MSP) of common variety of paddy at around $1,410 per quintal (around $213 per ton) and that of Grade A paddy at $1,450 per quintal (around $219 per ton) for the 2015-16 kharif season.

Based on the pace of procurement, the Food Ministry officials expressed confidence that the government may surpass the target of 30 million tons for KMS 2015-16. The FCI and government agencies procured 32 million tons of rice in KMS 2014-15.

Current El Nino Event Third Strongest Since 1950, Says WMO

Nov 17, 2015

The Word Meteorological Organization (WMO) is forecasts the El Nino weather phenomenon to strengthen by the end of this year, according to a news release on its website.The agency noted in the online statement that the current El Nino event is expected to be among the three strongest events since 1950. It stated that this event is the strongest in last fifteen years.It also noted that the three-month average of the surface-water temperatures in east-central tropical Pacific Ocean is likely to exceed 2 centigrade Celsius above normal.An El Nino event is characterized by severe droughts in Asian and South American countries and floods in North America.

Already extending drought conditions in Asia's top rice producing nations of Thailand, India, Indonesia and the Philippines are likely to lower the 2015 global rice output significantly. The drought conditions are likely to be extended till March 2016.

Lower Global Supplies Expected to Boost Thai Rice Exports, Prices in 2016, Says Commerce Ministry Official

Nov 17, 2015

Thailand will be able to export at least 9 million tons of rice in 2016 due to lower global rice supplies, local sources quoted the Commerce Ministry Permanent Secretary as saying.

The official noted that the government will sign a rice export contract with the Chinese government on December 19, under which Thailand will export the remaining 200,000 tons of rice to China. The contract is part of a government-to-government (G2G) deal signed last year with China to export one million tons of rice. Thailand exported 800,000 tons of rice to China under the contract. The Thai government will also sign a contract with Indonesia to export 500,000 tons of rice between December 2015 - March 2016, according to the official.

She also noted that lower supplies that are likely to result from lower production in most of the Asia's rice producing countries due to the El Nino weather phenomenon would lead to higher prices and better returns to farmers. Export prices of all varieties of rice, which have been declining since 2014, have started to pick up on concerns of lower production this year. The extending drought conditions are likely to lower the Thai paddy rice production to around 22.98 million tons in 2015-16, down about 30% from around 32.62 million tons last year.

The Thai Commerce Ministry is expecting Thailand to export around 10 million tons of rice in 2015. Thailand exported around 8 million tons of rice in January 1 - November 10, 2015, according to the Ministry.

Meanwhile, the Ministry is planning to continue to sell rice from its stockpiles next year also. The Commerce Permanent Secretary expressed confidence that the government would be able to clear the current 13 million tons of stockpiles over the next two years. Of the 13 million tons of stocks, about 6 million tons are judged as good quality, about 6 million ton are judged as lower quality that can be upgraded to mixed rice or used for industrial supply, and the remaining 700,000 tons are judged as rotten rice, which cannot be consumed and can only be sold for non-food industrial and biomass production.

The government has decided to suspend rice sales during the harvest period, which will continue until March 2016, to protect prices.

Vietnam Rice Sellers Lower Some of Their Quotes Today; Other Asian Quotes Remain Unchanged

Nov 17, 2015

Vietnam rice sellers lowered their quotes for jasmine rice by about $15 per ton to around $450 - $460 per ton today. Other rice quotes remain unchanged today.

Thailand rice sellers have fixed quotes for Hom Mali rice from the new crop at around $725 - $735 per ton, down about $60 per ton from the quotes of old crop at around $785 - $795 per ton.

5% Broken Rice

Thailand 5% rice is indicated at around $350 - $360 per ton about $20 per ton discount on Vietnam 5% rice shown at around $370 - $380 per ton. India 5% rice is indicated at around $345 - $355 per ton, about $30 per ton premium on Pakistan 5% rice shown at around $315 - $325 per ton.

25% Broken Rice

Thailand 25% rice is indicated at around $345 - $355 per ton, about $10 per ton discount on Vietnam 25% rice shown at around $355- $365 per ton. India 25% rice is indicated at around $325 - $335 per ton, about $35 per ton premium on Pakistan 25% rice shown at around $290 - $300 per ton.

Parboiled Rice            

Thailand parboiled rice is indicated at around $350 - $360 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 $325 - $335 per ton, about $5 per ton discount to Vietnam 100% broken rice shown at around $330 - $340 per ton. India's 100% broken rice is shown at around $285 - $295 per ton, about $5 per ton premium on Pakistan broken sortexed rice shown at around $280 - $290 per ton.

FAO Forecasts Madagascar 2015 Paddy Production to Decline 6% y/y Due to Cyclones, Rainfall Deficits

Nov 17, 2015

In a special report released on Madagascar, the UN's Food and Agricultural Organization (FAO) forecasts the country's paddy production in 2015 to decline about 6% to around 3.7 million tons from around 3.94 million tons in 2014.

The FAO attributes the decline to the impact of two cyclones, which struck the country in January and February 2015, causing significant damage to crops and irrigation infrastructure, and resulting in the silting of arable land. In most regions, the cyclones were preceded and followed by rainfall deficits that negatively impacted on crop development and also resulted in limited cultivation of off-season crops, says the FAO.

Based on a survey by the a joint FAO/WFP Crop and Food Security Assessment Mission (CFSAM) and the Ministry of Agriculture and Rural Development, the FAO reports that the damage caused by the locust plague has been largely contained in 2015 by the implementation of the joint Government-FAO three-year programme (2013-16).

The agency, however found that farmers are largely concerned about the lack of quality seeds and complementary inputs, including fertilizers and pesticides at reasonable prices. The FAO reports that farmers are seeking short-cycle rice varieties as well as improved irrigation systems to enable them to grow more number of crops yearly.The FAO forecasts Madagascar to import 331,000 tons of rice in 2015.

 Oryza CBOT Rough Rice Futures Recap - Chicago Rough Rice Futures Bounce Higher as Market Continues to Trade in Sideways Range

Nov 18, 2015

Chicago rough rice futures for Jan delivery settled 22.5 cents per cwt (about $5 per ton) higher at $12.065 per cwt (about $266 per ton). The other grains finished the day with mixed results; Soybeans closed about 0.5% higher at $8.6400 per bushel; wheat finished about 1.7% lower at $4.8700 per bushel, and corn finished the day about 0.3% higher at $3.6800 per bushel.

U.S. stocks traded mostly higher in choppy trade Tuesday, as some encouraging earnings reports offset pressure from declines in oil prices. The reports break last week's trend of several disappointing retailer earnings last week. The major averages held higher in midday trade after earlier giving up opening gains. Energy traded more than half a percent lower after briefly falling more than 1%, following a reversal in oil prices after Monday's gains.

 In early afternoon trade, WTI crude fell over 2% to below $41 a barrel, while brent held about 1.8% lower to trade below $44 a barrel as focus returned to global oversupply. Crude settled up 2.45 percent Monday, boosted by geopolitical concerns following weekend terror attacks in Paris. Investors also eyed some speeches from Federal Reserve members ahead of Wednesday's release of the Fed meeting minutes.

In economic news, the consumer price index rose 0.2% in October, matching estimates. The so-called core CPI, which takes out food and energy costs, gained 0.2%. In the 12 months through October, core CPI increased 1.9%.In other data reports, home builder confidence fell more than expected to 62 in November. Industrial production for October showed a second-straight month of decline with a 0.2% drop, missing expectations for a slight rise. European stocks surged Tuesday, with the STOXX Europe 600 up more than 2%, as markets found confidence from euro zone data. Most major

Asian indexes closed more than 1% higher Tuesday, with only the Shanghai composite ending a touch lower. The rally followed gains of more than 1% in U.S. stocks Monday on the sharp jump in oil prices. In early afternoon trade, the Dow Jones Industrial Average gained 70 points, or 0.4%, to 17,553. The S&P 500 traded up 5 points, or 0.28%, to 2,058, with health care leading seven advancers and utilities the greatest decliner. The Nasdaq traded up 19 points, or 0.38%, to 5,003. Apple traded mildly higher. Gold is seen trading about 1.4% lower, crude oil is seen trading about 2.1% lower, and the U.S. dollar is seen trading about 0.3% higher about  1:00pm Chicago time.

Monday, there were 681 contracts traded, down from 985 contracts traded on Friday. Open interest – the number of contracts outstanding – on Monday increased by 88 contracts to 12,501.

Global Rice Quotes

November 18th, 2015

Long grain white rice - high quality

Thailand 100% B grade           360-370           ↔

Vietnam 5% broken     370-380           ↔

India 5% broken          345-355           ↔

Pakistan 5% broken     315-325           ↔

Myanmar 5% broken   405-415           ↔

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 345-355           ↔

Vietnam 25% broken   355-365           ↔

Pakistan 25% broken   285-295           ↔

Cambodia 25% broken            400-410           ↔

India 25% broken        325-335           ↔

U.S. 15% broken         500-510           ↔

Long grain parboiled rice

Thailand parboiled 100% stxd             350-360           ↔

Pakistan parboiled 5% broken stxd      405-415           ↔

India parboiled 5% broken stxd           335-345           ↔

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%           725-735           ↔

Vietnam Jasmine         450-460           ↔

India basmati 2% broken         NQ       ↔

Pakistan basmati 2% broken    NQ       ↔

Cambodia Phka Mails 830-840           ↔

Brokens

Thailand A1 Super       325-335           ↔

Vietnam 100% broken             330-340           ↔

Pakistan 100% broken stxd     280-290           ↔

Cambodia A1 Super    355-365           ↔

India 100% broken stxd          285-295           ↔

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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