18th june,2015 daily exclusive oryza e rice newsletter by riceplus magazine

1 Daily Exclusive ORYZA Rice E-Newsletter by Riceplus Magazine |

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June 18 ,2015




About 30% of North Korean Paddy Rice

Acreage Dried Up Due to Drought, Says

KCNA

Jun 17, 2015

North Korea is experiencing worst drought conditions in a century and about 30% of the

country's rice land has dried up, the official Korean Central News Agency (KCNA) reported on

June 16."Water level of reservoirs stands at the lowest, while rivers and streams (are) getting

dry," said the report. Official sources are predicting the production of rice to decline by about

20% of the average production if the shortage of water continues till July.USDA estimates North




Korea's 2015 milled rice production at around 1.7 million tons, down about 10% from around

1.88 million tons in 2014.

Asia Rice Quotes Unchanged Today

Jun 17, 2015

Asia rice sellers kept their quotes mostly unchanged today.

5% Broken Rice

Thailand 5% rice is indicated at around $355 - $365 per ton, about a $10 per ton premium on

Vietnam 5% rice shown at around $345 - $355 per ton. India 5% rice is indicated at around $365

- $375 per ton, about $15 per ton discount to Pakistan 5% rice shown at around $380 - $390 per

ton.

25% Broken Rice

Thailand 25% rice is shown at around $340 - $350 per ton, about a $10 per ton premium on

Vietnam 25% rice shown at around $330- $340 per ton. India 25% rice is indicated at around

$350 - $360, about $15 per ton premium on Pakistan 25% rice shown at around $335 - $345per

ton.

Parboiled Rice

Thailand parboiled rice is indicated at around $360 - $370 per ton. India parboiled rice is

indicated at around $355 - $365 per ton, about a $45 per ton discount to Pakistan parboiled rice

shown at around $400 - $410 per ton.

100% Broken Rice

Thailand broken rice, A1 Super, is indicated at around $315 - $325 per ton, about $5 per ton

premium on Vietnam 100% broken rice shown at around $310 - $320 per ton. India's 100%

broken rice is shown at around $280 - $290 per ton, about a $15 per ton discount to Pakistan

broken sortexed rice shown at around $295 - $305 per ton.




About Half of Rice Land in Central Region

Will Not Be Affected by Reduced Water

Supplies, Says Thai Agriculture Ministry

Jun 17, 2015

Thailand's Agriculture and Cooperatives Ministry has announced that about 3.4 million rai

(around 544,000 hectares) of rice land, or 46% of the total rice land in the Central region will not

be affected by the government's decision to cut water supplies from the Chao Praya River basin

to irrigated lands, according to local sources.The Agriculture Minister noted that the drought was

most severe in 22 provinces of the Central region, where about 7.4 million rai (around 1.184

million hectares) of rice land receive an irrigated water supply from the Chao Praya River. It




advised the rice farmers in about 4 million rai (around 640,000 hectares) land to wait until there

is sufficient rain at the end of next month. He urged the farmers to understand the situation and

follow the government advice to delay planting until the water levels in the reservoirs improve.

Separately, the Prime Minister told local sources that the government has instructed

the Department of Royal Artificial Rain-making and Agricultural Aviation to monitor the

weather conditions and accordingly create artificial rain in areas with reservoirs in order to

increase the supply.Meanwhile the Thai Rice Mill Association (TRMA) President expressed

concern that the prolonged low rice price in Thailand may force many rice millers to shut their

operations. He told local sources that more than 100 mill operators are affected by the falling rice

prices.

Currently, the price of 15% moisture content rice is ruling at about 7,500 – 7,700 baht per ton

(around $222 - $228) down from the previous 8,000 – 8,500 baht per ton (around $237 - $252).

Average farm price of paddy is at around 6,700 – 7,000 baht per ton (around $199 - $208), he

said.

Bangladesh's Boro Rice Procurement Drive

Fails to Provide Respite to Farmers

Jun 18, 2015

The boro paddy and rice (January – May) procurement drive has not provided the expected

respite to farmers in terms of prices, according to local sources.Despite the ongoing procurement

drive, farmers are forced to sell their paddy at almost half of their production costs. They are

currently selling freshly harvested boro rice between Tk 480 - 500 per 40 kilograms (around

$146-$162 per ton) against the government's estimated production cost of around Tk 800 per 40

kilograms (around $260 per ton).

The government began the procurement of one million tons of 2015 boro paddy and 100,000

tons of boro rice from May 1, 2015. The procurement drive will continue till August 31, 2015. It

has fixed the procurement price for paddy at Tk 22 per kilogram (around $283 per ton) and that

for rice at Tk 32 per kilogram (around $412 per ton).

However, local sources say the government is currently procuring milled rice from millers rather

than paddy from farmers. It has already procured around 313,000 tons of milled rice from the




millers. Due to this stance by the government, farmers are at a loss as they are not receiving the

government set price of $283 per ton, and are forced to sell to millers and traders at much lower

prices. Traders and miller s on the other hand are not offering decent prices to farmers as the

market is flooded with low quality rice imports from India.Farmers are worried as they are

unable to recover their production costs and also they are not in a position to hold their output

until the government starts procuring paddy from them.

The government imposed a duty of 10% on rice imports in May this year to curb increasing

imports from India. Though this action by the government increased boro paddy price by about

20%, farmers had not benefitted out of it. Most of the farmers reportedly sold their output from

the boro harvest season even before the duty imposition and were not left with any stocks to take

advantage of the increased prices. According to local sources, this decision was also meant to

benefit millers who stocked enough paddy from the ongoing harvest.Either way, farmers stand at

a loss, according to local sources.The government is estimating the output from the 2014-15

ongoing boro crop at around 19 million tons.




USDA estimates Bangladesh’s MY 2014-15 (July 2014 – June 2015) milled rice production to

slightly increase to about 34.5 million tons from an estimated 34.39 million tons in MY 2013-14.

It estimates Bangladesh to import 1.1 million tons of rice in 2015.

EU Seeks Aromatic Rice Import Deal from

Myanmar

Jun 18, 2015

The European Union (EU) is considering to import aromatic rice from Myanmar as the demand

for aromatic rice in the region is increasing, according to local sources.A delegation from the

European Commission (EC) had met with the representatives of the Myanmar Rice Federation

(MRF) on June 17 to discuss the country's ability to export fragrant rice to the EU in the mid- to




long-term. The General Secretary of the MRF reportedly told the delegation that Myanmar can

produce both short and long grain aromatic rice and can meet the EU demand through the

contract farming system. Myanmar produces two types of fragrant rice - Lone Thwal Hmwe and

Paw San.

The MRF Vice-Chairman told local sources that exporting fragrant rice to the EU will help

Myanmar rice farmers to diversify their market but they need to increase the aromatic rice

production if they have to export it to the EU as the current production is sufficient only to meet

the local demand. He also noted that since the local price of Paw San is quite high, most of the

farmers do not want to export. He added that the export price of Paw San would be in the range

of $900 per ton.According to the MRF data, Myanmar exported around 100,000 tons of rice to

the EU in 2014 and the government is targeting to export 200,000 tons this year.The EU statistics

show that Myanmar's rice exports (both milled and semi-milled) to the EU increased about 120%

to around 45,240 tons during September 2014 - April 2015 from around 20,848 tons during the

same period last year. The EU imports rice from Myanmar under the Everything But Arms

(EBA) agreement at zero percent import duty."An export deal with Myanmar on aromatic rice

strains would “create a win-win situation, as we don’t produce them and we want and eat them,”

a member of the EU delegation was quoted as saying.Separately, Myanmar rice exporters are

planning to attend an exhibition in Milan next month as part of efforts to promote Myanmar rice

in Italy and other EU markets. So far, China is the largest export market for Myanmar rice, but

the government is keen on diversifying its export market and reduce too much dependence on

China.

Government of Guyana Seeks to Extend

PetroCaribe Deal with Venezuela

Jun 18, 2015

The government of Guyana is preparing for bilateral talks with the government of Venezuela to

extend the oil-for-rice PetroCaribe deal, which is to expire this year, according to local sources.

Under the deal Venezuela buys rice from Guyana and sells oil to Guyana.Under the existing

agreement, Guyana is expected to sell about 210,000 tons of paddy and polished rice annually to

Venezuela. The value of this supply is reportedly $130 million.According to the Minister of

State, the government is seeking to extend the PetroCaribe deal with Venezuela at a time when




other South American countries are eyeing a major share in the Venezuelan rice market.

However, he expressed confidence that the deal could be extended given the long-standing

relationship of Guyana with Venezuela. "We believe that because of the length of time that we

have been shipping rice to Venezuela market they might have become accustomed to Guyana's

rice and we stand a better chance of being able to negotiate a longer term arrangement," he was

quoted as saying.

He also noted that the Foreign

Affairs Minister will deal this

matter with the support of other

Ministers.At home, stakeholders of

the rice market have been

complaining of the government's

lethargy in making payments to the

farmers. They blame the

government for mostly focusing on

finding markets for private rice

exporters and negotiating prices

overlooking internal

problems.Recently, there was an

uproar about mismanagement of

the PetroCaribe fund. The Minister of State noted that the fund was empty and the government

needs to arrange about $15 million to pay farmers.The deal is very important for Guyana as it

had helped Guyana's rice industry develop significantly with increasing production and exports.

It has been providing higher prices compared to other countries' offers. The deal also helped to

achieve food security in the Caribbean region.

Guyana produced around 633,000 tons of rice in 2014, up about 18% from around 535,212 tons

from 2013; and exported around 501,208 tons of rice in 2014, up about 27% from around

394,000 tons exported in 2013, according to the Agriculture Minister. The Caribbean nation aims

to produce about 618,000 tons of milled rice and export around 521,000 tons in 2015.USDA

estimates Guyana to produce 650,000 tons of milled rice in the MY 2015-16(January 2015 -

December 2015) and export about 500,000 tons in 2015. The FAO estimates Guyana to produce

570,000 tons of milled rice and export around 460,000 tons in 2015.

Global Rice Quotes




June 18th, 2015

Long grain white rice - high quality

Thailand 100% B grade 365-375 ↔

Vietnam 5% broken 345-355 ↔

India 5% broken 365-375 ↔

Pakistan 5% broken 380-390 ↔

Myanmar 5% broken 415-425 ↔

Cambodia 5% broken 430-440 ↔

U.S. 4% broken 450-460 ↔

Uruguay 5% broken 565-575 ↔

Argentina 5% broken 555-565 ↔

Long grain white rice - low quality

Thailand 25% broken 340-350 ↔

Vietnam 25% broken 325-335 ↓

Pakistan 25% broken 335-345 ↔

Cambodia 25% broken 410-420 ↔

India 25% broken 350-360 ↔

U.S. 15% broken 440-450 ↔

Long grain parboiled rice

Thailand parboiled 100% stxd 360-370 ↔




Pakistan parboiled 5% broken stxd 400-410 ↔

India parboiled 5% broken stxd 360-370 ↑

U.S. parboiled 4% broken 555-565 ↔

Brazil parboiled 5% broken 570-580 ↔

Uruguay parboiled 5% broken NQ ↔

Long grain fragrant rice

Thailand Hommali 92% 840-850 ↔

Vietnam Jasmine 465-475 ↓

India basmati 2% broken NQ ↔

Pakistan basmati 2% broken NQ ↔

Cambodia Phka Mails 820-830 ↔

Brokens

Thailand A1 Super 315-325 ↔

Vietnam 100% broken 310-320 ↔

Pakistan 100% broken stxd 295-305 ↔

Cambodia A1 Super 350-360 ↔

India 100% broken stxd 280-290 ↔

Egypt medium grain brokens NQ ↔

U.S. pet food 350-360 ↔

Brazil half grain NQ ↔




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

Government of India Increases 2015-16

Paddy MSP by About 3.6% to $220 per Ton

Jun 17, 2015

The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal by the

Commission for Agricultural Costs and Prices (CACP) to increase the minimum support price

(MSP) for common paddy during the 2015-16 kharif marketing season (October - September) by

about Rs.50 per quintal (around $7.8 per ton) or about 3.6% to around Rs.1,410 per quintal

(around $220 per ton), according to local sources.The CCEA has also increased the MSP for

Grade A/superior paddy by about Rs.50 per quintal (around $7.8 per ton) or about 3.6% to

around Rs.1,450 per quintal (around $226 per ton).

For the 2014-15 kharif marketing season, the government increased the MSP for common grade

paddy by about 3.8% to around Rs.1,310 per quintal (around $218 per ton) and increased the




MSP for Grade 'A' paddy by about 4% to around Rs.1,345 per quintal (around $223 per

ton).Analysts say percentage wise, there has been a steady decline in the paddy MSP hike over

the last few years, except for the crop year 2011 when there was no hike. In 2012-13 Kharif

marketing season, the government increased the paddy MSP by 15.74%.Meanwhile, amid fears

of lower rainfall due to an El Nino weather pattern, the government is reportedly preparing to

deal with exigencies which are likely to arise due to a deficient monsoon. The major rice

growing states such as Punjab, Haryana, Andhra Pradesh, Telangana, Chhattisgarh and Odisha

have so far received excess or normal rainfall since the beginning of the monsoon season on June

1.

USDA estimates India's MY 2015-16 (October - September) milled rice production at 104

million tons, up about 1.5% from an estimated 102.5 million tons in MY 2014-15. It expects

India to export around 10.2 million tons of rice during 2015, slightly up from an estimated 10.15

million tons in 2014.

Oryza Afternoon Recap - Chicago Rough

Rice Futures Fail to Maintain Morning

Momentum and Slide into the Close

Jun 17, 2015

Chicago rough rice futures for Jul delivery settled 7 cents per cwt (about $2 per ton) lower at

$9.730 per cwt (about $215 per ton). After trading higher overnight and for the majority of the

day session rough rice futures reversed direction and closed lower. The market once again failed

at nearby overhead resistance noted around the $9.900 per cwt (about $218 per ton) level and

now look poised to trade lower towards the bottom of the current $9.400-$10.000 per cwt (about

$207-$220 per ton) trading range. The other grains continued higher today, with impressive

gains noted in both the soy and corn pits for the second consecutive day; Soybeans closed about

1.2% higher at $9.6900 per bushel; wheat finished about 0.5% higher at $4.9125 per bushel, and

corn finished the day about 1.5% higher at $3.5925 per bushel.

U.S. stocks traded mostly lower on Wednesday as investors digested the Federal Reserve

statement. The Federal Open Market Committee concluded its two-day meeting in the afternoon.

The statement was due at 2:00 p.m. ET and Fed Chair Janet Yellen is scheduled to hold a press

conference at 2:30 p.m. Stocks reversed opening gains to trade lower ahead of the statement




release. With consensus for a September rate hike, most investors do not expect major policy

changes from the central bank's announcement. U.S. stocks closed higher on Tuesday as the Fed

began its two-day meeting and investors attempted to shake off worries about Greece debt talks,

which reached an impasse over the weekend. The Dow Jones Industrial Average traded down 48

points, or 0.27%, at 17,854. The S&P 500 traded down 6 points, or 0.28%, at 2,090, with

telecommunications leading all 10 sectors lower. The Nasdaq traded down 8 points, or 0.15%, at

5,047. Gold is trading about 0.2% lower, crude oil is seen trading about 1.5% lower, and the U.S.

dollar is seen trading about 0.1% lower at about 1:00pm Chicago time.Tuesday, there were

2,162 contracts traded, up from 1,825 contracts traded on Monday. Open interest – the number of

contracts outstanding – on Tuesday decreased by 31 contracts to 11,101.

Oryza Overnight Recap – Chicago Rough

Rice Futures Capture Overnight Support

from Firmer Grain Complex and Weaker

Dollar

Jun 17, 2015

Chicago rough rice futures for Jul delivery are currently seen trading 3 cent per cwt (about $1 per

ton) higher at $9.830 per cwt (about $217 per ton) ahead of floor trading in Chicago. The other

grains are seen trading higher; soybeans are currently seen trading about 0.6% higher, wheat is

listed about 1.5% higher and corn is currently noted about 0.6% higher.U.S. stock futures

pointed to a flat to slightly higher open on Wednesday, with the spotlight shifting from the crisis

in Greece to the Federal Reserve. The U.S. central bank concludes a two-meeting with a

statement and new economic and interest rate forecasts at 2 p.m. ET.

Fed chief Janet Yellen holds a 2:30 p.m. press briefing amid talk that the Fed is gearing up for a

September interest rate rise as the economy recovers. U.S. stock futures pared early gains, with

Dow Jones industrial average futures trading more than 15 points higher during the European

morning session. Wall Street shares closed higher on Tuesday as the Fed began its two-day

meeting and investors attempted to shake off worries about the Greece debt talks. Later on

Wednesday, the European Central Bank is expected to hold a meeting to review emergency

funds, known as the Emergency Liquidity Assistance (ELA). Greek banks are reliant on this

funding and analysts warn that if the central bank curbs this liquidity, Greece may have no




option but to impose capital controls. Gold is currently trading about 0.3% lower, crude oil is

seen trading about 1.9% higher, and the U.S. dollar is currently trading about 0.2% lower

at 8:30am Chicago time.

Oryza U.S. Rough Rice Recap - Prices Slip as

Window to Market Old Crop Narrows

Jun 17, 2015

The U.S. cash market was slightly weaker today as buyer interest remains limited while those

with rice left to sell see their window to market their crop narrow as new crop in South Louisiana

approaches harvest late next month.Analysts contend that export demand will have to increase

substantially to help make room for new crop and stabilize prices; however, most doubt that

tomorrow’s USDA exports sales report will show a significant increase from the last two weeks'

sales figures which were tepid, at best.

Thailand, Vietnam Rice Sellers Lower Some

of Their Quotes; India Rice Sellers Increase

Some of Their Quotes Today

Jun 18, 2015

Thailand rice sellers lowered their quotes for 5% broken rice by about $5 per ton to around $350-

$360 per ton today. Vietnam rice sellers lowered their quotes for 25% broken rice and Jasmine

rice by about $5 per ton and about $10 per ton to around $325-$335 and $465-$475 per ton,

respectively. India rice sellers increased their quotes for parboiled rice by about $5 per ton to

around $360-$370 per ton. Pakistan rice sellers kept their quotes mostly unchanged today.

5% Broken Rice

Thailand 5% rice is indicated at around $350 - $360 per ton, down about a $5 per ton from

yesterday and about a $5 per ton premium on Vietnam 5% rice shown at around $345 - $355 per

ton. India 5% rice is indicated at around $365 - $375 per ton, about $15 per ton discount to

Pakistan 5% rice shown at around $380 - $390 per ton.




25% Broken Rice

Thailand 25% rice is shown at around $340 - $350 per ton, about a $15 per ton premium on

Vietnam 25% rice shown at around $325- $335 per ton, down about a $5 per ton from yesterday.

India 25% rice is indicated at around $350 - $360, about $15 per ton premium on Pakistan 25%

rice shown at around $335 - $345 per ton.

Parboiled Rice

Thailand parboiled rice is indicated at around $360 - $370 per ton. India parboiled rice is

indicated at around $360 - $370 per ton, up about a $5 per ton from yesterday and about a $40

per ton discount to Pakistan parboiled rice shown at around $400 - $410 per ton.

100% Broken Rice

Thailand broken rice, A1 Super, is indicated at around $315 - $325 per ton, about $5 per ton

premium on Vietnam 100% broken rice shown at around $310 - $320 per ton. India's 100%

broken rice is shown at around $280 - $290 per ton, about a $15 per ton discount to Pakistan

broken sortexed rice shown at around $295 - $305 per ton.

What Are India's Options for Rice Straw

Disposal?

Jun 17, 2015

India, the second largest rice producer in the world, produces nearly 130 million tons of rice

straw annually. While half of it is used as cattle feed, farmers want economically viable means of

disposing the other half, according to an article published in a UK magazine.Unable to find

economically lucrative methods, most farmers burn the straw in their fields to quickly get rid of

it before the new season begins. However, burning of rice straw is not environmentally safe

process as it releases gases such as gases like carbon dioxide, methane, carbon monoxide,

nitrogen oxide, sulphur oxide and large amount of particulate matters, which adversely affect

human health as well as the environment.




Farmers are yet to realize the importance of rice straw as a form of manure and as a profitable

raw material for various industries. In the major rice growing states of Punjab and Haryana,

farmers have tried various means of disposing the rice straw while earning them some

income.Brick manufacturing companies, power companies, and paper and packaging industries

use rice straw as a raw material. But farmers say those industries don't offer decent prices, and

considering all rice production costs, they are not sure of assured returns.

Some agricultural specialists have devised a composting technique, which can convert huge piles

of rice straw into organically rice soil. However, since the whole process takes about 45 days,

farmers have found it very labor-intensive. Similarly, another method called "mulching" was also

suggested. In this process, straw is spread across the soil surface and allowed to decompose

naturally into the soil by the activity of worms and other organisms. Though some farmers have

adopted this process, it has not become very popular.In this backdrop, the author says farmers

want quick and easy solutions and they are very much aware of the multiple options available for

managing agro-waste. But they will give up burning rice straw only if they receive lucrative




returns. The author suggests that the governments could convince farmers to stop burning rice

straw and help them earn lucrative returns through international carbon trading.

Philippines May Import 100,000 Tons of Rice

at Higher Price from Vietnam

Jun 17, 2015




The National Food Authority (NFA) of the Philippines may consider to import

100,000 tons of 25% broken well-milled long grain white rice from Vietnam at a

higher price than its reference price of $408.14 after receiving higher bids twice in

the June 16 government-to-government (G2G) tender, according to local

sources.On June 16, when the NFA invited bids for the remaining 100,000 tons of

the June 5 tender, Thailand offered to sell 100,000 tons at $418 per ton, Vietnam

and Cambodia offered at $417 per ton and $464 per ton respectively. The NFA

rejected all the bids and asked the bidders to submit revised bids by 07.00 GMT.

However, Thailand backed out of the bidding as the reference price set by the NFA

was too low compared to the global prices. On the other hand Vietnam revised its

bid to supply 100,000 tons of rice at $416 per ton and Cambodia revised its bid to

supply 50,000 tons of rice at $455.5 per ton. Both the bids were still higher than

the reference price set by the NFA. However, the NFA is reportedly considering to

import rice at the lowest bid rate, which is from Vietnam.Since the NFA has no

authority to accept bids that are higher than the reference price, the matter has been

referred to the NFA Council, which has set the terms of reference for G2G

contracts, according to the Presidential Adviser on Food Security and

Modernization (PAFSAM), noted that the decision on imports is pending. He noted

that the NFA Council will meet on Wednesday to decide on the matter.

The imports are meant to maintain buffer stocks during the lean season (July -

December). The NFA currently holds a buffer stock of 750,000 tons of rice, which

is expected to last for 24 days. Since the NFA has to maintain a 30-day buffer

stock during lean months, it is dependent on the 100,000 tons imports.

“It’s just that we need to beef up and increase our buffer stock for the lean months

in line with our commitment to the government policy that every July 1 we should

have at least 30 days. We need to be compliant with our commitment to good

governance,” the NFA Deputy Administrator was quoted as saying.







Documents

18th june,2015 daily exclusive oryza e rice newsletter by riceplus magazine