11 January ,2016 Daily Exclusive ORYZA Rice E-Newsletter by Riceplus Magazine

Promote Exports of Hybrid Rice Seeds

Jan 08, 2016

China's National Rice Research Institute (NRRI) is planning to promote exports of hybrid rice seeds in Southeast Asia, Africa and South America over the next five years as part of the 13th five year plan (2016-2020), according to Asia One Business.

The Director General of the Institute noted that the NRRI will partner with Chinese seed companies to promote the hybrid seed exports.

"We need to ensure that the rice companies make a profit and that local farmers improve their yields," he said.

He noted that the Chinese hybrid seeds provide 30% higher yields than the hybrid seeds used in many other countries. Therefore the Institute is also keen on setting up demonstration centers for Chinese technologies abroad. The official noted that since the cost of exporting Chinese rice seeds to foreign markets is very costly, the Institute is keen on developing local rice varieties overseas with a local labour force.

"We need to establish ourselves in the local seed markets, and this will offer us a starting point to establish ourselves further in the agricultural sector," he said.

He also stated that the concept needs administrative approval from the Ministry of Agriculture. "We are hoping that the approval procedure will be simplified in the near future," he said.

Oryza Weekly: Rice Prices May Increase on Indonesia Demand

Jan 09, 2016

The Oryza White Rice Index (WRI), a weighted average of global white rice export quotes, ended the week at about $384 per ton, down about $3 per ton from a week ago, down about $8 per ton from a month ago and down about $45 per ton from a year ago. Australia’s Bureau of Meteorology predicts that the current conditions of El Nino will return to neutral during the second quarter of 2016 with chances of La Nina occurring in the second half of 2016.

Thailand

Thailand 5% broken rice is today shown at about $355 per ton, up about $5 per ton from a week ago, unchanged from a month ago and down about $55 per ton from a year ago.

The government hopes to export about 9 million tons of rice in 2016, according to the Permanent Secretary of the Commerce Ministry.

Thailand has temporarily suspended a one-million ton rice shipment to Iran due to the ongoing diplomatic crisis between Iran and Saudi Arabia.

Vietnam

Vietnam 5% broken rice is today shown at about $335 per ton, down about $10 per ton from a week ago, down about $20 per ton from a month ago and down about $20 per ton from a year ago.

Cambodia

Cambodia 5% broken rice is today shown at about $430 per ton, unchanged from a week ago, up about $10 per ton from a month ago, and down about $25 per ton from a year ago.

Three Chinese firms have reportedly proposed to invest about $400 million in a project to develop rice warehousing facilities in Cambodia.

India

India 5% broken rice is today shown at about $360 per ton, unchanged from a week ago, up about $10 per ton from a month ago, and down about $30 per ton from a year ago.

Wholesale basmati rice prices declined last week due to sluggish demand from traders and sufficient stocks.

India’s total rice exports in the first eight months of FY 2015-16 (April-November) have declined by about 7% from last year, reaching about 6.98 million tons.  India’s total rice export earnings have declined about 23% y/y to around $3.97 billion.

As of January 1, India’s 2015-16 winter/rabi rice (November-May) planting area has reached about 1.477 million hectares, down about 8% from last year.

As of January 1, the Food Corporation of India has procured around 18.966 million tons of rice in KMS 2015-16 (October-September).

Experts anticipate India’s rice exports in FY 2015-16 (April-March) to decline significantly due to reduced demand from major importers such as Iran and Nigeria.

Pakistan

Pakistan 5% broken rice is today shown at about $335 per ton, unchanged from a week ago, up about $10 per ton from a month ago and down about $45 per ton from a year ago.

The USDA Post forecasts Pakistan's MY 2015-16 milled rice production at around 6.9 million tons, unchanged from USDA's official estimates.

Sri Lanka has granted duty free access to 102 products from Pakistan, including basmati rice, as part of a free trade agreement between the two countries.

Central & South America

Five percent broken rice from Uruguay and Argentina is today shown at about $500 per ton, down about $10 per ton from a week ago, down about $20 per ton from a  month ago and down about $100 per ton from a year ago.

Brazil 5% broken rice is today shown at about $450 per ton, unchanged from a week ago, down about $50 per ton from  a month ago and down about $90 per ton from a year ago. The UN’s FAO forecasts Brazil’s 2015 paddy rice production to be around 12.44 million tons, an increase of about 3% from 2014, due to an increase in acreage and yields.The Brazilian paddy rice index maintained by the Center for Advanced Studies on Applied Economics (CEPEA) reached around 40.98 real per 50 kilograms as of January 4, 2016, slightly up from around 40.96 real per 50 kilograms recorded on December 27, 2015.  In terms of USD per ton, the index reached around $204.50 per ton on January 4, 2015, down about 3.6% from around $212.10 per ton recorded on December 27, 2015.  Month-on-month, the index has declined about 0.3% from around 41.11 real per 50 kilograms. In terms of USD, the index declined about 7% during the month.

Guyana exported around 537,334 tons of rice in 2015, up about 7.21% from around 501,208 tons in 2014. However, in terms of earnings, Guyana's exports declined about 11% to around $220.85 million in 2015 from around $249.5 million in 2014.

The UN’s FAO forecasts 2015 paddy rice production in Dominican Republic to be around 900,000 tons, virtually unchanged from last year’s levels.

U.S.

U.S. 4% broken rice is today shown at about $470 per ton, down about $10 per ton from a week ago, down about $20 per ton from a  month ago and down about $45 per ton from a year ago.

Chicago rough rice futures for March delivery started the first week of the new year stronger amidst buying interest and firmer grains, reaching the weekly high of $11.880 per cwt (about $262 per ton) on Tuesday before tumbling the rest of the week.  After reaching the weekly low of $11.565 per cwt (about $255 per ton) on both Thursday and Friday, futures for March delivery regained some ground to close at $11.845 per cwt (about $261 per ton) on Friday.

Although it firmed up slightly midweek, the U.S. cash market was mostly weaker this week as long grain exports for the last week of 2015 disappointed market participants.

The Trans-Pacific Partnership agreement may not be signed in 2016 after all, as the U.S. Presidential elections, Congressional objections, and uncertainties surrounding the signing date are all shaping up to be major roadblocks for its signing.

Colombia Rice Export Quota, Inc. (COL-RICE) has announced a tender schedule for shipping 94,209 tons of U.S. rice under the U.S.-Colombia Trade Promotion Agreement as per the 2016 tariff rate quota for the U.S.

Other Markets

The UN’s FAO forecasts Maldives 2015-16 (January-December) rice imports to be around 26,000 tons, up about 3% from 2014-15.

The UN’s FAO forecasts Malaysia’s 2015-16 (July-June) rice imports to increase to about 2.694 million tons, up about 2% from last year, despite record rates of production due to an expected increase in domestic demand.

The Agriculture Minister of the Philippines says that further extension of quantitative restrictions on rice imports will prove costly for the government, but are needed to protect local farmers from cheap imports. Separately, the National Food Authority of the Philippines plans to import more rice from Vietnam and Thailand in 2016 in order to ensure rice sufficiency throughout the country. The USDA Post forecasts the Philippines MY 2015-16 (May 2015 - April 2016) rice imports at around 2.1 million tons, up about 17% from around 1.8 million tons in MY 2014-15 and USDA's official estimates of around 1.8 million tons. Meanwhile, scientists in the Philippines have found that extracts from seaweed can boost rice production and protect the plants from major pests when they are treated with slight gamma radiation.

The government of Indonesia has been urged by the state logistics agency Bulog to fix its rice purchase price in accordance with prevailing market prices.  The Indonesian government plans to import 350,000 tons of rice in the first quarter of 2016 to enhance stocks and curb price hikes.  The government is considering importing rice from India and Pakistan amid concerns of low stocks and prolonged drought conditions. The USDA Post forecasts Indonesia to import around 1.15 million tons in MY 2015-16 (January - December 2016), down 15% from around 1.35 million tons in MY 2014-15 and down from USDA's official estimates of around 1.6 million tons.

Experts say that Saudi Arabia curtailing rice waste of about 700,000 tons per year (worth about SR 2 billion or $533 million) would help the economy significantly and keep rice prices in check.

The government of Laos aims to produce 4.2 million tons of paddy rice in 2016 in order to ensure adequate supply for domestic consumption and exports.

Officials from Nepal’s Ministry of Commerce and Ministry of Agricultural Development are concerned that India’s new policy of shifting exports of seed quality paddy rice and husked rice to “restricted” category from “free” category has significantly impacted the country’s rice mills.

Leaders from various European countries and related executives will meet in Belgium capital  Brussels on January 12, 2016 to discuss the challenges faced by the current food production systems as well the solutions needed to produce food more efficiently and safely.

The Italian Parliament approved an amendment to the Domestic Stability law, which allows for the allocation of 2 million euros (about $ 2.186 millions) for 2016 and 5 million euros (about $ 5.465 millions) by 2017 in favour of the National Fund for the Most Deprived. The administration of Italy’s Piedmont region has decided to tighten controls on organic rice growing in order to prevent speculation against the consumers’ confidence. As of December 29, about 38.9% (or 587,976 tons) of the total Italian 2015-16 (September-August) paddy crop has been sold, a decrease of about 6% from the same time last year. The USDA Post forecasts Italy's MY 2015-16 rice production at around 1.5 million tons, up about 7.5% from around 1.4 million tons in MY 2014-15 based on the latest figures from the Italian Rice Association (Enterisi).

Guyana 2015 Rice Exports Increase 7% y/y But Earnings Down 11% y/y Due to Low Prices, Says GRDB Official

Jan 08, 2016

Guyana exported around 537,334 tons of rice in 2015, up about 7.21% from around 501,208 tons in 2014, local sources quoted the Head of the Guyana Rice Development Board (GRDB).

However, in terms of earnings, Guyana's exports declined about 11% to around $220.85 million in 2015 from around $249.5 million in 2014. He attributed the decline in the value of exports to low prices. He noted that when Guyana was exporting to Venezuela, the country was receiving about $760 per ton. However, after the neighboring country withdrew purchases from Guyana, they are receiving  prices in the range of $340 - $400 per ton.

In 2015, Guyana mostly exported rice to countries in North America, Latin America, West Africa, European Union and CARICOM countries, according to the GRDB Head. He noted that the GRDB and other stakeholders are keen on finding new markets for Guyanese rice.

The official noted that Guyana's 2015 paddy rice production increased about 8% to around 1.06 million tons (around 687,784 tons, basis milled) from around 977,289 tons (around 635,238 tons, basis milled) in 2014.

The agency is striving to help farmers boost production through developing stronger and resilient varieties of rice, according to the official.

USDA Post Forecasts Indonesia to Import 1.15 Million Tons of Rice in MY 2015-16, Down 15% from Previous Year

Jan 08, 2016

The USDA Post forecasts Indonesia to import around 1.15 million tons in MY 2015-16 (January - December 2016), down 15% from around 1.35 million tons in MY 2014-15 and down from USDA's official estimates of around 1.6 million tons.

Bulog needs to maintain year-end stocks of around 2.5 million tons in 2015, but the stocks stood at around 1.7 million tons at the end of September. Bulog stocks are expected to fall by about 950,000 tons based on the government's decision to double the distribution of Raskin rice between September and November.

So as to meet the MY 2014-15 ending stock target, the government authorized BULOG to

import 1.5 million tons of rice in October 2015. Around 750,000 tons of the 1.5 tons have been delivered in 2015. The Post expects the balance 750,000 tons to arrive before

March 2016 as Indonesian regulations restrict rice imports one month prior to, during, and two months after the main harvest period (expected to last from March to May 2016).

The Post estimates Indonesia's rice production at around 36.35 million tons (basis, milled) in MY 2015-16, down from around 35.56 million tons last year and up from USDA's official estimates of 36.3 million tons. The Post expects the country’s MY 2015-16 first main harvest, which should normally take place between February and April, is not expected until March-May due to delayed plantings.

USDA Post Forecasts Pakistan MY 2015-16 Milled Rice Production at 6.9 Million Tons

Jan 08, 2016

The USDA Post forecasts Pakistan's MY 2015-16 milled rice production at around 6.9 million tons, unchanged from USDA's official estimates.

The Post reports that harvesting of the 2015-16 rice crop is complete. Based on data from the Pakistan Bureau of Statistics (PBS), the Post reports that Pakistan exported around 4.1 million tons in MY 2014-15 (November 2014-October 2015), up from USDA's official estimates of around 4 million tons.

Indonesia signed a memorandum of understanding (MoU) with Pakistan on December 8, 2015 to import 1 million tons of milled rice from 2016 to 2019. If successful, the deal could help to support Pakistan’s exports of non-Basmati rice, says the Post.

India Winter Crop Rice Acreage Continues to Lag Behind Last Year as of January 8, 2016

Jan 08, 2016

India 2015-16 winter/rabi rice (November - May) planting area has reached around 1.707 million hectares as of January 8, 2016, down about 9% from around 1.863 million hectares planted during the same period in 2014-15, according to a press release by the Ministry of Agriculture.

The decline is due to scanty rains and low moisture in some of the rice growing regions. Last week, the Director of the Indian Meteorological Department reportedly stated that warmer easterly winds in December and January due to the El Nino phenomenon also impacted rabi rice sowing to some extent. Based on the pace of sowing so far, analysts are expecting a decline in the rabi rice crop yield.

The total rabi rice planting of all crops stood at around 56.5 million hectares as on January 8, 2015, down about 3% from last year's 58.25 million hectares.

In 2014-15, the rabi rice acreage reached around 4 million hectares, down about 9% from around 4.488 million hectares in 2013-14.

Thailand Rice Sellers Increase Some of Their Quotes Today; Other Asia Rice Quotes Unchanged

Jan 08, 2016

Thailand rice sellers increased their quotes for 25% broken rice by about $5 per ton to about $340-$350 per ton today. Other Asia rice sellers kept their quotes unchanged today .                     

5% Broken Rice

Thailand 5% rice is indicated at around $350 - $360 per ton, on par with Vietnam 5% rice shown at around $350 - $360 per ton. India 5% rice is indicated at around $355 - $365 per ton, about $25 per ton premium on Pakistan 5% rice shown at around $330 - $340 per ton.

25% Broken Rice

Thailand 25% rice is indicated at around $340 - $350 per ton, on par with Vietnam 25% rice shown at around $340- $350 per ton. India 25% rice is indicated at around $325 - $335 per ton, about $20 per ton premium on Pakistan 25% rice shown at around $305 - $315 per ton.

Parboiled Rice           

Thailand parboiled rice is indicated at around $355 - $365 per ton. India parboiled rice is indicated at around $345 - $355 per ton, about $60 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 $315 - $325 per ton, about $20 per ton discount to Vietnam 100% broken rice shown at around $335 - $345 per ton. India's 100% broken rice is shown at around $265 - $275 per ton, about $20 per ton discount to Pakistan broken sortexed rice shown at around $285 - $295 per ton.

USDA Post Forecasts Philippines MY 2015-16 Rice Imports at 2.1 Million Tons, Up 17% from Previous Year

Jan 08, 2016

The USDA Post forecasts the Philippines MY 2015-16 (May 2015 - April 2016) rice imports at around 2.1 million tons, up about 17% from around 1.8 million tons in MY 2014-15 and USDA's official estimates of around 1.8 million tons.

The increase in imports forecast is based on the government's earlier estimations that 1.3 million tons of milled rice needs to be imported in 2016 to cover losses from Typhoon Koppu and to strengthen stocks as the El Nino dry spell is expected to intensify through mid-2016.

The Post forecasts MY 2015-16 paddy rice production at around 18.298 million tons, down from around 18.913 million tons last year and up from USDA's official estimates of around 17.857 million tons. It forecasts paddy rice area at around 4.665 million hectares, down from around 4.7 million hectares last year and up from USDA's official estimates of 4.35 million hectares. 

USDA Post Forecasts Italy MY 2015-16 Rice Production to Increase 7.5% y/y on Higher Acreage, Yields

Jan 08, 2016

The USDA Post forecasts Italy's MY 2015-16 rice production at around 1.5 million tons, up about 7.5% from around 1.4 million tons in MY 2014-15 based on the latest figures from the Italian Rice Association (Enterisi).

The increase in output is attributed to an increase in rice planted area to around 227,329 hectares in MY 2015-16 from around 219,532 hectares in MY 2014-15. The Post also estimates Italy's yield to increase to around 6.68 tons per hectare in MY 2015-16 from around 6.45 tons per hectare in MY 2014-15.

The Post estimates Long-A, Long-B, and Round paddy productions at around 820,765 tons, 247,825 tons, and 404,209 tons, respectively. Long-A, Long-B, and Round paddy areas are forecast at around 135,338 hectares, 35,044 hectares, and 56,946 hectares, respectively. Long-A, Long-B, and Round paddy yields are forecast at around 6.26 tons per hectare, 7.3 tons per hectare, and 7.3 tons per hectare, respectively.