Oryza U.S. Rough Rice Recap - Silent Market ahead of Thanksgiving Holiday
Nov 26, 2015
The U.S. cash market
was silent and unchanged today as most market participants took off early for
the holiday weekend.
Analysts note that the
futures market will be closed tomorrow for Thanksgiving and will not re-open
until Friday morning however the cash market will remain quiet as most
participants will still be on vacation.
Lack of Proper Pricing Policy for Paddy By-products Leads to Great Rice
Milling Scam in India, Says CAG Report
Nov 25, 2015
An audit report by the
Comptroller and Auditor General (CAG) has found that India does not have proper
pricing policy for by-products of rice such as bran, husk, broken rice and
nooks, according to The Wire. The report has unearthed the great rice milling
scam, which has been going on uninterruptedly for more than a decade, when the
existing milling rules were formulated.
The report states that
the by-products of rice enjoy a huge demand in the local as well as global
market. When the government hands over the paddy procured from farmers to
millers for public distribution system (PDS) purposes, millers are left with
nearly 32-33 kilograms of by-products per quintal (around 320 - 330 kilograms
per ton) of paddy after milling the rice. This includes 22 kilograms of rice
husk, 8 kilograms of rice bran and 2 kilograms of broken rice, according to the
Central Rice Research Institute.
The CAG report states
that while the government pays about Rs.87 per quintal (around $13 per ton) for
millers, they earn an extra Rs.169 per quintal (around $26 per ton) of paddy by
selling the by-products, which they get for free. The government has not so far
considered the by-products while pricing for milling paddy. It notes that the
government has been losing nearly Rs.10,000 crore (around $1.5 billion) per
year due to its faulty policy of giving the millers sole rights over the
by-products of paddy. The accumulated losses over the years would have crossed
over Rs.100,000 crore (around $15 billion), says the report.
The report will advise
the government that the paddy by-products are the property of the state and the
revenue belongs to the exchequer. It will also advise the government to address
this loophole by millers, politicians and other high profile people. It will be
tabled in the winter session of the Parliament, which will begin shortly.
Oryza Weekly: Global Rice Quotes Stagnant Ahead of U.S. Thanksgiving
Holiday
Nov 26, 2015
The Oryza White Rice
Index (WRI), a weighted average of global white rice export quotes, ended the
week at about $393 per ton, unchanged from a week and a month ago, and down
about $46 per ton from a year ago.
Thailand
Thailand 5% broken
rice is today shown at about $355 per ton, unchanged from a week ago, down
about $5 per ton from a month ago, and down about $55 per ton from a year ago.
The dry season rice
crop 2015-16 (November-April) output is expected to decline to around 4 million
tons, about 25% less than last year, due to El Nino-induced drought conditions.
The government plans
to continue with the auction of about 37,412 tons of rotten rice from its
stockpiles as scheduled on December 1, despite recommendations from the Thai
Agricultural Surveyors Association to suspend the auction.
Thailand has exported
about 1.2 million tons of rice in October, up about 67% m/m from in September but
down about 1% y/y from October 2014. In terms of value, Thai rice exports
declined by about 17.6% y/y to around $490 million.
Vietnam
Vietnam 5% broken rice
is today shown at about $375 per ton, unchanged from a week and month ago, and
down about $20 per ton from a year ago.
Demand for Vietnam’s
medicinal rice varieties, such as Ngoc do huong dua (red gem with pineapple
flavor), Vibigaba, an organic Japonica brown rice, and organic black sprout
gaba rice, is increasing significantly both within and outside the country.
Cambodia 5% broken rice is today shown at about $420 per ton,
unchanged from a week and a month ago, and down about $40 per ton from a year
ago.
Myanmar 5% broken rice is today shown at about $410 per ton,
unchanged from a week and a month ago.
India
India 5% broken rice
is today shown at about $350 per ton, unchanged from a week and a month ago,
and down about $50 per ton from a year ago.
An audit report by the
Comptroller and Auditor General has found that India does not have the proper pricing
policy for by-products of rice such as bran, husk, broken rice and nooks.
The report unearthed the great rice milling scam, which has been going on
uninterruptedly for over a decade, when the existing milling rules were
formulated.
Iraq’s Trade Ministry purchased 40,000 tons of Indian rice,
part of a tender issued on October 21.
The UN’s Food and
Agricultural Organization forecasts Nepal’s 2016 rice imports
at around 640,000 tons, up about 14% from 2015, due to an expected decline in
this year’s paddy rice production.
The government of Bangladesh
has decided to double the import duty on rice to 20% in efforts to discourage
imports and protect local rice farmers. However, rice millers in the
country are urging the government to increase the duty on rice imports to 30%.
Pakistan
Pakistan 5% broken
rice is today shown at about $325 per ton, up about $5 per ton from a week ago,
up about $15 per ton from a month ago, and down about $60 per ton from a year
ago.
In the first four
months of FY 2015-16 (July-June), Pakistan exported about 1.03 million tons of
rice, an increase of about 20% from the same period in FY 2014-15.
The UN’s FAO forecasts
Pakistan 2015 paddy rice production at around 9.9 million tons, down about 6%
from 10.502 million tons in 2014. The decline is attributed to a 5%
decrease in area planted in response to large stocks and high production costs.
Central &
South America
Brazil 5% broken rice is today shown at about $500 per ton, down
about $10 per ton each from a week ago and a month ago, and down about $50 per
ton from a year ago. The Brazilian paddy rice index maintained by the Center
for Advanced Studies on Applied Economics (CEPEA) reached around 41.28 real per
50 kilograms as of November 23, 2015, slightly up from around 41.22 real per 50
kilograms recorded on November 17, 2015. In terms of USD per ton, the
index reached around $223.17 per ton on November 23, 2015, up about 2% from
around $218.98 per ton recorded on November 17, 2015. Month-on-month, the
index has increased about 1% from around 40.88 real per 50 kilograms. In terms
of USD, the index increased about 6% during the month.
Five per cent broken
rice from Uruguay and Argentina is today
shown at about $535 per ton, unchanged from a week and a month ago, and down about
$65 per ton from a year ago.
The Nicaraguan
Institute of Agricultural Technology has developed a new drought-resistant rice
variety, INTA-Posoltega.
U.S.
U.S. 4% broken rice is
today shown at about $490 per ton, unchanged from a week and a month ago and up
about $55 per ton from a year ago.
Chicago rough rice
futures for January delivery saw limited movement during this short holiday
week with the weekly high hitting $12.320 per cwt (about $272 per ton) on
Wednesday and the low reaching $12.030 per cwt (about $265 per ton) on
Monday. Futures closed on Wednesday just up from the low at $12.120 per
ton (about $267 per ton).
The U.S. cash market
was mostly quiet this week as holiday doldrums set in, but did firm up some
before the holiday, in tandem with the futures market.
Other Markets
Iran has decided to temporarily lift the ban on rice imports,
which has been in effect since October 2014, for a period of three months
starting December 3.
During the first ten
months of 2015, China has imported around 2.636 million tons
of rice, up about 31% from the same period last year.
European paddy quotes showed slight movements during the week
November 10-17, according to European quotations supplied by the European Union
on November 17.
Italy’s milled rice exports declined about 23% y/y during the
period September 1 – November 17, reaching only 27,947 tons.
The new genetically
modified rice variety called “SUSIBA2” has been selected for the “Best
of What’s New” award by the Popular Science magazine.
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