Mar 21, 2016 Daily Exclusive ORYZA Rice E-Newsletter by Riceplus Magazine

European Commission Proposes New Rules for Fertilizer Manufacture, Trading in EU

Mar 18, 2016

The European Commission (EC) has proposed new rules for fertilizer manufacturing and trading across the EU, according to local sources. The new rules focus on a more sustainable farming and boosting the use of organic and waste-based fertilisers. The new proposal is part of the Circular Economy Package (CEP) adopted in December 2015, which aims to create a stronger and more circular economy where resources are used in a more sustainable way. The reuse of raw materials that are now disposed as waste is one of the key principles of the CEP.

The European Structural & Investment Funds (ESIF) has agreed to provide financial support of around 5.5 billion euros (around $6.2 billion) for waste management; and an EU funding programme for research and innovation called Horizon 2020 will provide a support of around 650 million euros (around $733 million) for the project.

The new regulation sets out common rules on converting bio-waste into raw materials that can be used to manufacture fertilising products. It defines safety, quality and labelling requirements that all fertilising products need to comply with to be traded freely across the EU. Producers will have to demonstrate that their products meet those requirements, as well as declare limits for organic contaminants, microbial contaminants and physical impurities before affixing the CE-mark that will allow them to trade freely across the EU. The new rules will apply to all types of fertilisers to guarantee the highest levels of soil protection. The Regulation introduces strict limits for cadmium in phosphate fertilisers. The limits will be tightened from 60 mg/kg to 40 mg/kg after 3 years, and to 20 mg/kg after 12 years, reducing the risks for health and environment.

The existing Fertilisers Regulation from 2003 ensures free movement on the single market mainly for conventional, non-organic fertilisers, typically extracted from mines or produced chemically. These processes are both energy consuming and CO2-intensive. Innovative fertilising products produced from organic materials are outside of the scope of the current Fertilisers Regulation. Their access to the single market is therefore depending on mutual recognition between Member States, and due to diverging national rules often difficult. The existing Fertilisers Regulation also fails to address environmental concerns arising from contamination by fertilisers of soil, inland waters, sea waters, and ultimately food.

Whereas, the proposed regulation is expected to significantly ease the access of organic and waste-based fertilisers in the EU, by bringing them on a level playing field with traditional, non-organic fertilisers. This is also expected to create new market opportunities for innovative companies while at the same time reducing waste, energy consumption and environmental damage.

The market opportunities for companies producing organic fertiliser products are likely to increase with the new regulation. Presently, only 5% of bio-wastes are recycled, but according to estimates they could replace up to 30 % of non-organic fertilisers. Currently, the EU imports around 5 million tons of phosphates annually, but with the new regulation, 30% of this can be replaced by the extraction from sewage sludge, biodegradable waste, meat and bone meal or manure.

The draft Regulation will now be sent to the European Parliament and Council for adoption. Once adopted, it will be directly applicable, without the need for transposition into national law, after a transitional period allowing companies and public authorities to prepare for the new rules.

Oryza Weekly: Rice Prices Increase on High Export Demand, Low Production Prospects

Mar 19, 2016

The Oryza White Rice Index (WRI), a weighted average of global white rice export quotes, ended the week at about $389 per ton, up about $4 per ton from a week ago, up about $6 per ton from a month ago and down about $27 per ton from a year ago.

In its March 2016 Rice Outlook report, the USDA forecasts 2015-16 global rice production (milled basis) at around 471.09 million tons, a decrease of about 2% from last year due to an expected decline in acreage and average yields, which are likely to be affected by adverse weather conditions in key growing areas.  The USDA forecasts 2015-16 global rice acreage at 157.7 million hectares, down slightly from last  year.  The USDA forecasts 2016 global rice trade to be around 41.7 million tons, down about 2% from in 2015 but up about 100,000 tons from last month’s forecast.

Thailand

Thailand 5% broken rice is today quoted at about $375 per ton, up about $10 per ton from a week and a month ago and down about $15 per ton from a year ago.

Exports during the first quarter of 2016 are likely to be sluggish due to low demand from traditional markets and increasing competition from India, Vietnam, and Pakistan, according to the Honorary President of the Thai Rice Exporters Association.

The government plans to sell about 641,000 tons of stockpiled rice on March 30 and 31.

A number of research institutes in Thailand are interested in investing in the country’s rice research activities to help the government increase the competitiveness of Thai rice and rice products in the global market.

Vietnam

Vietnam 5% broken rice is today quoted at about $380 per ton, up about $10 per ton from a week ago, up about $25 per ton from a month ago and up about $10 per ton from a year ago.

Vietnam’s rice exports more than doubled since last year with 856,219 tons exported during the first two months of 2016, an increase of about 56% y/y.

A rice expert is urging the Vietnamese government to focus on formulating new production and exports in order to cope with increasing competition from Thailand and Cambodia.

Vietnam rice exporters have shipped around 150,500 tons of rice from Saigon port.

The Agriculture Ministry says the government needs about 34 trillion dong (about $1.515 billion) to cope with damages from drought and salinity, and the Minister confirmed that about 10% of 1.5 million hectares of rice planted in winter-spring crop in Mekong delta has been hurt by drought.

China has agreed to release water from its Jinghong Hydropower Station reservoir into the lower Mekong River to help Vietnam deal with drought and salinity in a number of provinces.  The Vietnam Prime Minister has asked several government agencies to send diplomatic notes to countries in the Mekong upriver asking for their cooperation with combating Vietnam’s drought.

Cambodia & Myanmar

Cambodia 5% broken rice is today quoted at about $425 per ton, up about $10 per ton from a week ago, down about $5 per ton from a month and a year ago. Members of the Cambodian Rice Federation (CRF) are considering to develop a price-support mechanism for the country's rice exports

Myanmar 5% broken rice is today quoted at about $425 per ton, unchanged from a week ago, up about $5 per ton a month and a year ago. The UN’s FAO says that Myanmar’s average domestic rice prices increased about 37% in February due to tighter domestic supplies.

India

India 5% broken rice is today quoted at about $370 per ton, unchanged from a week ago, up about $5 per ton from a month ago, and down about $25 per ton from a year ago.

As of March 1, rice stocks in the central pool stood at around 29.234 million tons, up about 23% from during the same period last year.  The increase is attributed to higher than expected paddy procurement in KMS 2015-16 (October-September).

About 320 rice mills in India's western state West Bengal have closed down their operations due to mounting losses. Lack of demand for parboiled rice, falling prices and shrinking exports, especially to Bangladesh are said to be the main reasons for their deteriorating financial conditions.

Pakistan

Pakistan 5% broken rice is today quoted at about $340 per ton, unchanged from a week ago, down about $5 per ton from a month ago and down about $10 per ton from a year ago.

The Rice Exporters Association of Pakistan has urged the country’s Central Bank to extend the payback period for the export refinance loans to 360 days from the current 180 days in order to help exporters cope with the falling global rice prices.

Pakistan basmati rice export prices have increased for the third consecutive month in February 2016, after declining continuously for three months from September 2015.

Central & South America

Five percent broken rice from Uruguay and Argentina is today quoted at about $440 per ton, unchanged from a week and a  month ago and down about $140 per ton from a year ago. Iraq has purchased 30,000 tons of rice from Argentina at $468 per ton (c&f free out), the lowest quote received.

Rice stocks in Brazil stood at around 92,260 tons in February, down about 16% from in January and down about 32% from in February 2015.

The USDA Post forecasts Mexico’s MY 2015-16 (October-September) rice imports to be around 690,000 tons, down slightly from last year.  It also forecasts Mexico’s MY 2016-17 imports to increase to 750,000 tons.

U.S.

U.S. 4% broken rice is today quoted at about $445 per ton, unchanged from a week ago, down about $20 per ton from a  month ago and down about $40 per ton from a year ago.

Chicago rough rice futures for May delivery were slightly bullish this week, ranging from $10.210 per cwt (about $225 per ton) to $10.690 per cwt (about $236 per ton) and closing the week at $10.475 per cwt (about $231 per ton).

The U.S. cash market firmed slightly this week, despite news that the IGB purchased 30,000 tons from Argentina and that last week was the worst weekly export sales this marketing year.

Other Markets

The National Food Authority of the Philippines has deferred plans to import an additional 500,000 tons of rice due to adequate supplies.  However, the Philippines rice stocks declined in February after increasing for the previous three months.  Total rice stocks as of February 1 were around 2.94 million tons, up about 25% from the same period last year. Halal certification by the Islamic Da’wah Council of the Philippines has opened more export markets for the country’s rice in the Middle East.

The government of Indonesia has launched a paddy rice purchase program to stabilize paddy prices at the farmers’ level. Rice farmers in Indonesia’s main rice growing area Bali hope to benefit from the province’s crop insurance program, launched in October, to protect farmers from crop failures caused by disasters such as drought, flooding, or pest attacks.

The government of Bangladesh procured only 194,000 tons of 2015-16 Aman (July-December) rice against the targeted 200,000 tons.

The government of Brunei is working to develop high-yielding rice varieties that can produce about 12 tons per hectare to achieve self-sufficiency in rice production.

Farmers in Malaysia's main rice growing area of Kedah and Perlis are delaying planting for the 2016 crop due to absence of rains and severe water shortages.

USDA Post forecasts Saudi Arabia's MY 2015-16 (January - December 2016) rice imports at around 1.48 million tons, up about 4% from an estimated 1.42 million tons in MY 2014-15, and up about 2% from USDA's official estimates of around 1.45 million tons due to population growth and increased number of foreign visitors to Makkah for performing Hajj and Umrah rituals.  

Rice imports by the European Union have increased sharply since the beginning of the crop year 2015-16 (September-August).  During the period September 1-March 8 the EU imported about 656,430 tons of rice, an increase of about 19% from the same period last year.During the period September 1-March 8 the EU exported about 119,116 tons of rice, down about 18% from the same period last year. The European Commission has postponed the voting on the new authorization for glyphosate for another fifteen years after some member states, including Italy, expressed concern over the use of this herbicide on human health. European paddy quotes mostly declined or remained stable during the week March 1-8. The European Commission (EC) has proposed new rules for fertilizer manufacturing and trading across the EU, according to local sources. The new rules focus on a more sustainable farming and boosting the use of organic and waste-based fertilisers. The Ente Nazionale Risi, the National Agency for Rice in Italy, expects overall Italian rice growing area to increase in 2016.  Acreage for japonica paddy varieties have increased about 3% y/y, while indica paddy acreage declined about 6% y/y.

The USDA Post forecasts Egypt’s MY 2015-16 (October-September) rice exports at around 250,000 tons, unchanged from the previous year, but down from the USDA’s official estimates of around 400,000 tons. The government of Egypt has launched a crackdown on firms it believes are hoarding rice in expectation of getting better prices.  The rice hoarding has led to severe rice shortages and surging prices.

The government of Mali forecasts MY 2016-17 (May-April) paddy rice output to be around 2.712 million tons, an increase of about 11% from in 2015-16.  The country plans to invest around 51 billion CFA francs (about $86.23 million) during the year in order to boost paddy rice production, including purchasing fertilizer and improving irrigation facilities.

The government of Nigeria has assured that it will stabilize the price of rice from April in order to make it more affordable to everyone in the country, according to the Agriculture Ministry.

Scientists Develop Nutrient-Enriched Genetically Modified Rice

Mar 18, 2016

Scientists from Colombia, the Philippines, Indonesia, the United States, Australia and Japan have developed a new genetically modified variety of rice with high contents of iron and zinc, according to Latin American Herald Tribune citing Agro-Bio, a Bogota-based association for the promotion of biotechnology.

The project is overseen by the International Rice Research Institute (IRRI). Researchers combined rice and soy-ferritin genes to produce rice content with high content of micro-nutrients. They implanted the modified genes in the most commonly grown rice in Asia.

It may take about four years for the new variety to receive regulatory approvals, according to the Agro-Bio. "The new rice is a step forward in efforts to fight the lack of micronutrients or hidden hunger," the association said.

“Foods derived from transgenic crops and scientific innovations in agriculture contribute to food security and they can improve the diet of populations who now suffer nutrient deficiencies,” said the Director of Agro-Bio.

Oryza CBOT Rough Rice Futures Recap - Chicago Rough Rice Futures End the Day Lower but the Week with the First Gain in Four Weeks

Mar 19, 2016

Chicago rough rice futures for May delivery settled 9.5 cents were cwt (about $2 per ton) lower at $10.450 per cwt (about $230 per ton). The other grains finished the day with mixed results; Soybeans closed slightly lower at $8.9750 per bushel; wheat finished about 0.1% higher at $4.6300 per bushel, and corn finished the day about 0.4% lower at $3.6700 per bushel.

U.S. stocks traded higher Friday, extending the rally that followed the Federal Reserve's accommodative policy decision earlier in the week. U.S. crude oil futures for April delivery settled down 76 cents, or 1.89%, at $39.44 a barrel. Oil briefly topped $41 a barrel in morning trade. The U.S. oil rig count showed a rise of one rig according to Baker Hughes. The Federal Reserve on Wednesday lowered its projections for the number of hikes in 2016 to two from four. The drop was larger than most expected but many market participants still expect just one hike this year. The Fed news followed the Bank of Japan's decision to keep rates unchanged earlier in the week and the European Central Bank's package of stimulus measures, including a rate cut, last week. In afternoon trade, the Dow Jones industrial average rose 87 points, or 0.49%, to 17,569. The S&P 500 gained 5 points, or 0.24%, to 2,045, with health care leading three sectors higher and telecommunications the greatest laggard. The Nasdaq composite added 10 points, or 0.22%, to 4,785. Gold is seen trading about 0.8% lower, crude oil is seen trading about 1.5% lower, and the U.S. dollar is seen trading about 0.3% higher at about  2:00pm Chicago time.

Thursday, there were 709 contracts traded, up from 557 contracts traded on Wednesday. Open interest – the number of contracts outstanding – on Thursday increased by 110 contracts to 12,494. 

Cambodia Exporters Consider Price-Support Mechanism for Rice Exports

Mar 18, 2016

Members of the Cambodian Rice Federation (CRF) are considering to develop a price-support mechanism for the country's rice exports, according to the Cambodia Daily.

In a meeting with the Ministry of Commerce on March 17, they discussed policies for strengthening the country's ailing sector and unveiled a plan to develop a price-support mechanism for rice exports. The CRF President told reporters that government officials will soon discuss a policy agenda. “An inter-ministerial meeting chaired by Deputy Prime Minister [Keat Chhon] will consider a $20 million to $30 million special budget [for the rice sector]. The meeting will help support the industry facing the illegal imports of rice from Vietnam,” he said.

The CRF Secretary-General added that the Federation had suggested a long-term strategy to support rice millers and exporters, which included plans to create a consortium of millers and exporters to manage Cambodia’s rice export price. “The biggest members from the CRF will be chosen to be ‘consortium partners’ to manage and set one export price,” he said.

The official noted that: "the proposed consortium would control the export price of rice by regulating supply, benefiting the country’s entire rice supply chain. If exporters get a good price, rice millers and farmers will benefit too as it will allow them to sell at higher prices."

However, the Secretary of State at the Commerce Ministry noted that it was too early to discuss the viability of the planned consortium. “A report of the meeting this morning is being prepared to send to the prime minister. First, we have to solve the immediate problems including preventing the inflow of rice from Vietnam and credit support to millers,” he said.

An independent economist expressed doubts with the working of the consortium and the price-support mechanism.

Separately, the Deputy Prime Minister and Minister for the Office of Council of Ministers told the newly-appointed Ambassador of the European Union (EU) that Cambodia needs more investment from the EU to maintain growth in the economy. “The EU should encourage more firms and other industries to come and buy rubber and rice from Cambodia. We can produce rice and rubber, but we need more markets for those products,” he was reported to have told the EU official.

Over 300 Rice Mills in Indian State West Bengal Shut Down on Mounting Losses

Mar 18, 2016

About 320 rice mills in India's western state West Bengal have closed down their operations due to mounting losses, according to Business Standard.

There are about 1,200 rice mills in the state. The state mainly produces parboiled rice. According to the President of the Bengal Rice Mills Association, about 200-250 rice mills in the state owe about Rs.250-300 crore (around $38-$45 million) to the banks. Lack of demand for parboiled rice, falling prices and shrinking exports, especially to Bangladesh are said to be the main reasons for their deteriorating financial conditions. Most of the rice mills are operating at only one-fourth of their capacity, according to the official.

Also higher rice distribution to families below poverty line under the public distribution system has also reduced local demand for parboiled rice, say millers. The number of beneficiaries receiving food grains at Rs.2 per kilogram (around $30 per ton) increased from nearly 32 million to over 80 million in West Bengal in the last five years, according to the government data.

West Bengal produces around 15 million tons of rice annually, and of this, the government procures about 4.5 million tons through the levy mechanism (under which the government procures paddy from farmers and gives it to registered millers for milling). Millers have expressed concern that the Rs.20 per quintal (around $3 per ton) paid by the government for milling is far below the cost of milling of around Rs.80 per quintal (around $12 per ton). They also complain they incur around Rs.2,100 per quintal (around $315 per ton) for producing one quintal of milled rice, but the market price is only Rs.1,700 per quintal (around $255 per ton). Thus, they have been incurring a loss of around Rs.400 per quintal (around $60 per ton).

West Bengal accounts for about 14% of India's total rice production

Asia Rice Quotes Unchanged Today

Mar 18, 2016

Asia rice sellers kept their quotes unchanged today.                      

5% Broken Rice

Thailand 5% rice is indicated at around $370 - $380 per ton, about $5 per ton discount to Vietnam 5% rice shown at around $375 - $385 per ton. India 5% rice is indicated at around $365 - $375 per ton, about $30 per ton premium on Pakistan 5% rice shown at around $335 - $345 per ton.

25% Broken Rice

Thailand 25% rice is indicated at around $355 - $365 per ton, on par with Vietnam 25% rice shown at around $355- $365 per ton. India 25% rice is indicated at around $335- $345 per ton, about $30 per ton premium on Pakistan 25% rice shown at around $305 - $315 per ton.

Parboiled Rice           

Thailand parboiled rice is indicated at around $375 - $385 per ton. India parboiled rice is indicated at around $350 - $360 per ton, about $55 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 $335 - $345 per ton, about $10 per ton discount to Vietnam 100% broken rice shown at around $345 - $355 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 Saudi Arabia MY 2015-16 Rice Imports to Increase 4% y/y to 1.48 Million Tons Due to Higher Demand

Mar 18, 2016

USDA Post forecasts Saudi Arabia's MY 2015-16 (January - December 2016) rice imports at around 1.48 million tons, up about 4% from an estimated 1.42 million tons in MY 2014-15, and up about 2% from USDA's official estimates of around 1.45 million tons due to population growth and increased number of foreign visitors to Makkah for performing Hajj and Umrah rituals.  

In MY 2014-15, Saudi Arabia imported about 1.42 million tons of rice, up by about 4% from a year

earlier. Saudi Arabia mainly imports rice from India, Pakistan, Thailand and the U.S. In MY 2014-15, India remained the dominant rice supplier to the Saudi market accounting for about 80% market share. The main factors that have kept the Indian dominance in the Saudi rice market are its capabilities to supply various varieties and grades of rice that are affordable to consumers of all income levels, says the Post.

The Post forecasts imports in MY 2016-17 to further grow to around 1.53 million tons.Saudi Arabia does not produce any rice locally and depends fully on imports to meet its rice consumption demand. The Post  forecasts Saudi Arabia's MY 2015-16 rice consumption demand at around 1.45 million tons, up about 4% from an estimated 1.39 million tons in MY 2014-15, and slightly down from USDA's official estimates of around 1.46 million tons due to an increase in tourists.

The Post reports that rice prices at Saudi retail outlets vary depending on different rice varieties, brand names and quality. In February 2016, retail prices of several Indian rice varieties declined by more than 20%, compared to the same period in the year before.

News have been shared with permission of  ORYZA.COM