8th April,2016 daily exclusive oryza rice e-newsletter by riceplus magazine

FAO Forecasts 2016-17 Global Rice Production at 495.2 Million Tons; Up 1% from Previous Year

Apr 07, 2016

In its April 2016 Cereal Supply and Demand Brief, the UN's Food and Agricultural Organization (FAO) forecasts 2016-17 global rice production at around 495.2 million tons, up about 1% from an estimated 490.3 million tons in 2015-16. "The forecast assumes a return to normal weather patterns in time for main-crop plantings in northern hemisphere Asia, following two consecutive seasons of erratic rains affecting planting activities," says the FAO. It adds that the current forecast implies a third successive season of below-trend growth, reflecting the continuation of the negative impacts of El Nino in the southern hemisphere.

The FAO estimates 2016-17 global rice utilization to increase by 1.4% to around 503.4 million tons, up about 1.5% from an estimated 496.2 million tons in 2015-16. Of this, 405 million tons is expected to be consumed as food. The FAO expects the global capita annual consumption to be steady at around 54.6 kilograms per person.

The FAO estimates 2016 global rice stocks at around 164 million tons, down about 3% from an estimated 168.9 million tons in 2015. The FAO attributes the decline to a fall in the stocks of the major rice exporting countries, amid sustained efforts to trim the size of public reserves and also subdued production growth prospects. The FAO expects the world stocks-to-use ratio at 32%, down from an estimated 33.6% last year.

The FAO estimates 2016 global rice trade at around 44.1 million tons, down from an estimated 44.9 million tons last year due to smaller anticipated imports by African countries, where a combination of good crops and weak local currencies have curbed demand.

 Higher Production Costs Impacting Profit Margins of Brazil Rice Producers, Says USDA Post

Apr 07, 2016

Higher production costs, including electricity, transport and taxes, have been impacting profit margins of Brazilian rice producers in 2015, according to the USDA Post. However, prices have improved during the year, says the Post.

The USDA Post forecasts Brazil MY 2015-16 (April 2016 - March 2017) milled rice production to decline to 8.4 7.8 million tons, down from an estimated 8.465 million tons last year and up from USDA's official estimates of around 7.905 million tons due to a decline in acreage. The production is forecast to further increase to 8.5 million tons in MY 2016-17.

The Post forecasts MY 2015-16 rice area to decline to 2.1 million hectares, down from an estimated 2.295 million hectares and down from the USDA's official estimates of around 2.15 million hectares.

The USDA Post estimates MY 2015-16 imports at 800,000 tons, up from an estimated 450,000 tons last year and up from USDA's official estimates of around 700,000 tons. Brazil imported 376,990 tons of rice in 2015.

It estimates MY 2015-16 rice exports at 800,000 tons, down from an estimated 930,000 tons in the previous year and down from USDA's official estimates of 830,000 tons. Brazil exported 961,540 tons of rice in 2015.

The Post forecasts MY 2015-16 rice consumption to increase slightly to around 7.95 million tons, up from an estimated 7.93 million tons last year and up from USDA's official estimates of around 7.94 million tons.

The Post reports that CONAB is calling on industries, cooperatives and associations to provide their annual assessment of private rice stocks. Last year’s survey showed 116,530 tons of milled rice was held in private stocks. CONAB holds 95,365 tons of public stocks.

Global Rice Quotes

April 8th, 2016

Long grain white rice - high quality

Thailand 100% B grade          380-390           ↔

Vietnam 5% broken    365-375           ↔

India 5% broken         370-380           ↔

Pakistan 5% broken    345-355           ↔

Myanmar 5% broken   415-425           ↔

Cambodia 5% broken             450-460           ↔

U.S. 4% broken           430-440           ↔

Uruguay 5% broken    435-445           ↔

Argentina 5% broken 425-435           ↔

Long grain white rice - low quality

Thailand 25% broken 355-365           ↔

Vietnam 25% broken 355-365           ↔

Pakistan 25% broken 310-320           ↔

Cambodia 25% broken           430-440           ↔

India 25% broken       335-345           ↔

U.S. 15% broken (sacked)      470-480           ↔

Long grain parboiled rice

Thailand parboiled 100% stxd            370-380           ↔

Pakistan parboiled 5% broken stxd    NQ      ↔

India parboiled 5% broken stxd         345-355           ↔

U.S. parboiled 4% broken       480-490           ↔

Brazil parboiled 5% broken    490-510           ↔

Uruguay parboiled 5% broken            NQ      ↔

Long grain fragrant rice

Thailand Hommali 92%          665-675           ↔

Vietnam Jasmine         460-470           ↔

India basmati 2% broken        NQ      ↔

Pakistan basmati 2% broken   NQ      ↔

Cambodia Phka Mails             760-770           ↔

Brokens

Thailand A1 Super      330-340           ↔

Vietnam 100% broken            340-350           ↔

Pakistan 100% broken stxd    285-295           ↔

Cambodia A1 Super   345-355           ↔

India 100% broken stxd         275-285           ↑

Egypt medium grain brokens NQ      ↔

U.S. pet food 315-325           ↔

Brazil half grain          NQ      ↔

All prices USD per ton, FOB vessel, oryza.com

Chinese Supermarkets Start Selling South Korean Rice for First Time

Apr 07, 2016

Chinese supermarkets started selling South Korean rice for the first time in history as China opened its market for the South Korean rice this February, according to Yonhap News.

China's state-run agricultural trading company COFCO Corp. imported around 72 tons of South Korean rice in February and put it on sale in a supermarket in Beijing.

China opened its market for South Korean rice nearly a decade after the Korean government sought for the relaxation of quarantine requirements. In the Korea-China summit meeting in September last year, the Chinese leaders agreed to ease quarantine regulations on South Korean rice.

"Exports of rice represent our efforts to help South Korean agricultural products go overseas. It also marks the first step to strike balance in the rice trade between the two countries," said the Korean Agricultural Minister. He also noted that the government would make efforts to penetrate further into the world's top rice importer. 

The South Korean government is reportedly expecting to export 2,000 tons of rice to China by the end of this year.

OECD Agriculture Ministers to Meet in Paris on April 7-8, 2016 to Discuss New Policies in Global Agriculture

Apr 07, 2016

Agriculture Ministers from the Organisation for Economic Co-operation and Development (OECD) countries and partner economies around the world will meet in Paris on April 7-8, 2016 to discuss "Better Policies to Achieve a Productive, Sustainable and Resilient Global Food System," according to local sources. The meeting will also discuss the future of rice growing sector in the face of growing opportunities and challenges, including climate change and limited resources, such as water. 

Ministers will explore the new policies needed to achieve this widely shared interest, and will exchange on how to ensure that existing policies begin to shift in these directions more quickly.

The Agriculture Ministers of the OECD countries met in February 2010. They are meeting this year after six years to assess whether the policies governments are pursuing are well targeted to address emerging issues and public priorities.

The aim of the meeting is to exchange ideas about policies, in order to best accompany the agricultural sector in responding to the new opportunities and challenges and how to manage the transition to a new policy framework; to deal with the entire food chain, with a strong focus on the knowledge and innovation systems needed to achieve sustainable productivity growth; to discuss how to strengthen global collaboration to that end, including through trade, science and technology, and education and advisory services; to reflect on how the food system can contribute to the overall well-being of local economies.

The meeting will be co-chaired by the U.S. Secretary of Agriculture, and the French Agriculture Minister. In addition to OECD countries, key emerging and developing countries, representatives of civil society and international organisations active in food and agriculture issues will attend the meeting.

Oryza U.S. Rough Rice Recap - Offers Firm in Anticipation of Iraqi Business

Apr 08, 2016

The U.S. cash market was slightly firmer today with offers increasing in anticipation of the U.S. receiving a portion of the Iraqi tender.  However, there were few buyers willing to increase their bids today.

Analysts continue to contend that U.S. will be the most expensive origin offered on the tender; however, some in the industry are still holding out hope that the U.S. will get a least a chunk of the business.

In the meantime, the USDA reported that cumulative net export sales for the week that ended on March 31 totaled 91,200 tons, a considerable increase from the previous week and 638% higher than the prior 4-week average.

Increases were reported for the following destinations:  22,200 tons to South Korea, 22,000 tons to Japan, 17,000 tons to Colombia, 12,000 tons to Haiti, and 11,200 tons to Mexico which were partially offset by 4,800 tons of reduction from unknown destinations.

For 2016/2017, net sales of 11,000 tons were reported for Japan.

U.S. rice exporters shipped 84,300 tons, an increase of 24% from last week and 29% higher than the prior 4-week average.

Increases were reported for the following destinations: 30,000 tons to Venezuela 12,000 tons to Haiti, 10,500 tons to Guatemala, 8,600 tons to South Korea, and 7,500 tons to Canada.

FAO Global Rice Price Index Declines Slightly m/m in March 2016

Apr 07, 2016

The FAO All Rice Price Index increased by one points or 0.5% to around 197 points in March 2016 from around 197 points in the previous month.

According to the FAO, while prices of the Higher quality Indica sub-index remained stable at 180 points, those of the Lower Quality Indica sub-index increased by about 3 points to around 184 points. The Japonica sub-index declined by 2 points or 0.8% to 242 points  and the Aromatic sub-index declined by 6 points or 4% to 148 points.

In January - March 2016, the FAO All Rice Price Index averaged 196 points, down about 11% from around 220 points during the same period last year. Sub-index for higher quality Indica rice prices declined about 5.7% y/y and sub-index for lower quality Indica rice prices declined about 3% y/y. Aromatic rice price sub-index declined about 24.2% y/y, and the sub-index for Japonica rice prices declined by about 12.2% y/y.

According to the FAO, Thai rice prices moved up, supported by a stronger baht and also by the announcement of a G-to-G sale to China. Pakistan rice prices declined on increased supplies. India rice prices increased due to large government procurement purchases. Prices in Vietnam increased amid concerns of tightening of supplies. Prices in the U.S. Argentina, Uruguay and Brazil declined due to on-going harvests.

During March 2016, average export quotations (on fob basis) of Thai 100% broken rice, Thai parboiled rice, Thai 25% rice, and Thai A1 Super rice increased to around $392 per ton, $391 per ton, $375 per ton and $343 per ton respectively. Average export quotations of Thai 5% rice remained stable at $384 per ton and those of Thai fragrant rice declined to around $793 per ton.

Export prices of Vietnam 25% broken rice increased to around $357 per ton. Quotations of India 25% broken rice increased to around $323 per ton and those of Pakistan 25% broken rice declined to around $309 per ton. While U.S. 4% broken rice variety declined to around $452 per ton, U.S. California 4% rice declined to around $745 per ton. Uruguay 5% rice declined to around $435 per ton.

Indian Scientists Discover Diabetic-Friendly Rice

Apr 07, 2016

Scientists from the Indira Gandhi Agricultural University (IGKV) in India's Central state Chhattisgarh has developed a slow sugar releasing variety of rice, called 'Chhattisgarh Madhuraj paddy- 55,' which is suitable for consumption by diabetic type-II patients, according to the Times of India.

IGKV principal scientist reportedly took three years to develop the rice variety. "Type II diabetes is a major chronic disease and its prevalence is increasing, while various studies indicate that choice of carbohydrates, particularly those with low Glycaemic Index (GI) is able to assist in management or prevention of type II diabetes. Hence, objective of this study was to determine the variability in GI of popular improved and traditional varieties of rice and to find the genetic basis of GI," he was quoted as saying.

He noted that the scientists screened 200 varieties if local rice varieties through mouse feeding trials and discovered that a variety called "Chaptigurmatiya" had low GI with 91% of total carbohydrates and it has slow releasing sugar tendencies. It was then renamed as 'Chhattisgarh Madhuraj paddy- 55,' he added.

The scientist added that this variety yields 4.2 tons per hectare and is long-grained white rice. The variety may be released into the market next year.

Vietnam Rice Sellers Lower Some their Quotes Today; Other Asia Rice Quotes Unchanged

Apr 07, 2016  

Vietnam rice sellers lowered their quotes for 5% broken rice and Jasmine rice by about $5 per ton each to around $365-$375 per ton and $460-$470 per ton respectively today. Other Asia rice sellers kept their quotes unchanged.        

5% Broken Rice

Thailand 5% rice is indicated at around $370 - $380 per ton, about $5 per ton premium on Vietnam 5% rice shown at around $365 - $376 per ton. India 5% rice is indicated at around $370 - $380 per ton, about $25 per ton premium on Pakistan 5% rice shown at around $345 - $355 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- $65 per ton. India 25% rice is indicated at around $335- $345 per ton, about $25 per ton premium on Pakistan 25% rice shown at around $310 - $320 per ton.

Parboiled Rice           

Thailand parboiled rice is indicated at around $370 - $380 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 $330 - $340 per ton, about $10 per ton discount to Vietnam 100% broken rice shown at around $340 - $350 per ton. India's 100% broken rice is shown at around $270 - $280 per ton, about $15 per ton discount to Pakistan broken sortexed rice shown at around $285 - $295 per ton.

Oryza CBOT Rough Rice Futures Recap - Chicago Rough Rice Futures Bounce as Recent Spate of Selling Subsides; Wheat Continues to Slip as Crop Conditions Seen Better than Expected

Apr 08, 2016

Chicago rough rice futures for May delivery settled 10.5 cents were cwt (about $2 per ton) higher at $9.850 per cwt (about $217 per ton). The other grains finished the day mostly lower; Soybeans closed about 0.4% lower at $9.0450 per bushel; wheat finished about 1.1% lower at $4.5775 per bushel, and corn finished the day about 1% higher at $3.6150 per bushel.

U.S. stocks traded nearly 1% lower or more Thursday as continued strength in the yen against the U.S. dollar renewed concerns about global growth and the effectiveness of central bank policy. The major averages came well off session lows in early afternoon trade but remained on track for a weekly decline of nearly 1% or more, with the Dow Jones industrial average on pace for its worst week since the one ended Feb. 12. WTI traded more than 2% lower below $37 a barrel as of 1 p.m. ET. U.S. crude oil futures settled higher for a second-straight day on Wednesday, rising 5.2% for its biggest daily gain since March 16. The Fed meeting minutes released Wednesday afternoon highlighted policymakers' concerns about global growth. In a light day of economic reports, weekly jobless claims came in at 267,000. Consumer credit is due in the afternoon. European stocks were more than half a percent lower with bank stocks underperforming. In Asia, the Shanghai composite fell more than 1% while the Nikkei 225 paused a seven-day losing streak with gains of 0.22%. China's foreign exchange reserves rose slightly in March to $3.21 trillion, the central bank said on Thursday, the first monthly increase since November. In afternoon trade, the Dow Jones industrial average declined 140 points, or 0.8%, to 17,575. The S&P 500 declined 19 points, or 0.94%, to 2,047, with financials leading all sectors lower. The Nasdaq composite fell 54 points, or 1.1%, to 4,866. Gold is seen trading about 1.2% higher, crude oil is seen trading about 2.1% lower, and the U.S. dollar is seen trading about 0.1% higher at about  1:00pm Chicago time.

Wednesday, there were 560 contracts traded, down from 1,830 contracts traded on Tuesday. Open interest – the number of contracts outstanding – on Wednesday increased by 98 contracts to 13,111. 

Thailand Rice Exporters Sign MoU to Export 150,000 Tons of Rice to Hong Kong in 2016

Apr 07, 2016

Thai rice exporters have signed a memorandum of understanding (MoU) with seven Hong Kong rice importers to sell 150,000 tons of rice worth 120 million this year, according to Thai PBS.

The MoU was part of the Thai Commerce Minister's visit to Hong Kong between April 5-7 to strengthen trade relations between the two countries. Members of the Thai Rice Exporters Association (TREA) reportedly accompanied the Minister to the Rice Importers Association of Hong Kong marketing and public relations plans to promote the Thai rice in 2016.

The Thai Commerce Ministry is keen on increasing the share of Thai rice in Hong Kong market from the current 57% to 65% in 2016. Thailand exported 189,469 tons and 182,071 tons of rice to Hong Kong in 2015 and 2016 respectively, according to the TREA data. Local sources say, with the current MoU, Thai rice exports to Hong Kong may reach around 200,000 tons this year. The Ministry is planning to increase exports Hong Kong to around 300,000 tons over the next two years.

As part of the visit, the Minister also reportedly discussed plans to export around 10,000 tons of Riceberry to Hong Kong this year and another 100,000 tons next year.

The Thai government is targeting to export 9.5 million tons of rice this year. The Commerce Minister noted that the target would be achieved despite a likely reduction in this year's output due to drought. She said that the government is planning to coordinate more closely with the private sector to increase the rice production capacity in the country. She also assured that the government is trying to increase exports to Singapore, China, ASEAN and the U.S. apart from Hong Kong.

The Minister also noted that the government still holds 12 million tons of rice stocks and is seeking channels to release them. She added that old stocks are holding back prices of rice in the market.