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Central Rice Research Institute, rice millers on average derive 22 kg of rice husk, 8 kg of rice bran and 2 kg of broken rice from 100 kg of paddy. And over the years, the market for these by-products has become even more lucrative than for rice.With by-products like thesePaddy by-products find applications in a wide range of industries: power generation, solvent plants, pharmaceuticals, brick kilns and breweries. While rice bran yields oil, cattle and poultry feed, rice husk is used to generate power and its further by product – rice husk ash – has numerous industrial uses including the production of pharmaceutical-grade silica.Rice husk ash produced after using rice husks for bricks. Credit: chiefdulia/FlickrGoing by the average price these by-products fetch in the market, the rice miller on average rakes in an extra Rs. 169 per 100 kg of paddy – over and above the Rs 87 he earns from the government. Since millions of tons of rice are processed every year, many top-notch millers are developing stand-alone by-products units for a sustainable stream of revenue catering to both the domestic and export markets.And as the earnings of these private companies mount, so does the loss caused to government in terms of revenue it could have earned if only it put in place a proper pricing policy.Although the market for these by-products is huge, lucrative and well documented, government agencies treat them as ‘worthless’ and refuse to claim any right over their further processing and sale. No wonder, then, that an evaluation of their market worth is never done. Instead, the contracts and agreements between the government agencies and rice millers give the latter unconditional ‘property rights’ over these by-products.In its audit report, the CAG criticises the government for its faulty policy of giving millers sole rights over the by-products of paddy. How can rice by-products, which are supposed to be the property of the state, be handed over to mill owners without any compensation, asks the CAG. Of particular cause for concern is the fact that successive governments – led by Atal Bihari Vajpayee, Manmohan Singh and Narendra Modi –persisted with a milling policy that deprives the nation of enormous revenue despite knowing the reality.The estimates of revenue loss to the government arrived at by the CAG in its audit report stand at more than Rs. 10,000 crore every year. If we calculate the cumulative losses since 2003 – when the current milling policy was formalised – the figures stand at more than a staggering Rs. 1 lakh crore.Even if government is not bothered about the loss of revenue caused by assigning zero-value to paddy by-products, what is inexplicable is its failure to even tax the additional income that millers earn from the sale of these by-products. Most millers do not show any sales proceeds in their balance sheets; those who do, tend to underreport the value. There are many instances where rice millers have either concealed sales or shown a price well below the market value. For example, while government agencies sell rice bran at Rs. 10 a kg, private rice millers show the selling price at Rs 1–5 per kg. The loss in tax revenue is likely to run into hundreds of crores of rupees. The CAG has not quantified this as it falls under revenue auditing, which is outside its accounting domain.Whistleblower’s efforts Rice husk mounds produced by a rice milling unit in Thailand. Credit: IRRIThe rice milling scam would have never been brought to light but for an Orissa-based whistleblower Gauri Shankar Jain who relentlessly pursued the case for almost five years. Thanks mostly to his efforts, the Tariff Commission – the nodal agency under the Ministry of Commerce and Industry mandated with setting prices on the basis of referrals from ministries and departments concerned – began working on a new price mechanism in 2012. Earlier this year, the Prime Minister’s Office also forwarded Jain’s complaint to the
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Daily Exclusive ORYZA Rice E-Newsletter
www.ricepluss.com,www.riceplusmagazine.blogspot.com
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Contact: Mujahid Ali [email protected]
All Contents are published with written permission of ORYZA.com with thanks
Daily Global Rice e-Newsletter October 05,2015 Vol 5 ,Issue XV
www.ricepluss.com www.riceplusmagazine.blogspot.com
November 26,2015 Vol 5,Issue XI
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Happy Thanksgiving from Oryza!
Nov 26, 2015
Oryza editorial team is working limited hours for the rest of this week and will be back in full force
Monday. Our best wishes to you and your families
Asian Rice Quotes Mixed Today
Nov 25, 2015
Thailand rice sellers lowered their quotes for Hom Mali rice by about $5 per ton to around $700
- $710 per ton today. They also increased their quotes for fragrant A1 Super rice by about $5 per
ton to around $350 - $360 per ton. Vietnam rice sellers increased their quotes for 5% broken rice
and 15% broken rice by about $5 per ton each to around $370 - $380 per ton and $365 - $375 per
ton respectively; and increased their quotes for glutinous rice variety by about $10 per ton to
around $465 - $475 per ton. Pakistan rice sellers increased their quotes for 5% broken , 25%
broken and 100% broken rice varieties by $5 per ton each to around $320 - $330 per ton, $395 -
$305 per ton and $285 - $295 per ton respectively. Other Asian rice sellers kept their quotes
unchanged from yesterday.
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5% Broken Rice
Thailand 5% rice is indicated at around $350 - $360 per ton about $20 per ton discount on
Vietnam 5% rice shown at around $370 - $380 per ton. India 5% rice is indicated at around $345
- $355 per ton, about $25 per ton premium on Pakistan 5% rice shown at around $320 - $330 per
ton.
25% Broken Rice
Thailand 25% rice is indicated at around $335 - $345 per ton, about $20 per ton discount on
Vietnam 25% rice shown at around $355- $365 per ton. India 25% rice is indicated at around
$325 - $335 per ton, about $30 per ton premium on Pakistan 25% rice shown at around $295 -
$305 per ton.
Parboiled Rice
Thailand parboiled rice is indicated at around $350 - $360 per ton. India parboiled rice is
indicated at around $340 - $350 per ton, about $65 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 $325 - $335 per ton, about $5 per ton
discount to Vietnam 100% broken rice shown at around $330 - $340 per ton. India's 100%
broken rice is shown at around $285 - $295 per ton, on par with Pakistan broken sortexed rice
shown at around $285 - $295 per ton.
Thanks and Regards,
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.
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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.
Bangladesh Millers Urge Government to
Triple Duty on Rice Imports
Nov 25, 2015
Bangladesh rice millers are urging the government to increase the duty on rice imports to 30%
from the existing 10% to protect the interest of local farmers and traders, according to local
sources.
They also urged the government to recognize the rice milling sector as agro-based industry and
provide low-interest loans and tax sops accordingly. They also requested the government to stop
issuing licenses to new milling establishments as the sector is already saturated.
The millers put forth their demands at the annual general meeting (AGM) of Bangladesh Auto
Major and Husking Mills Owners Association.
In the same meeting, the Food Minister hinted that the government is considering increasing the
rice import duty to 20%. The Minister assured the millers that a circular would be issued shortly
in this regard. He also assured them that he would take forward their demand to declare rice mills
as agro-based industry.
The government will reportedly procure 200,000 tons of 2015 Aman rice from millers at Tk 31
per kilogram (around $388.5 per ton) between December 15, 2015 and March 15, 2016 to protect
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prices in the domestic market. However, farmers are urging the government to increasing the
procurement target stop price falls.
The Bangladesh government imposed a duty of 10% on rice imports in May 2015 after rice
imports by private traders surged significantly due to low global prices. Bangladesh traders
imported over 1.4 million tons of rice in FY 2014-15 (July - June) compared to only 374,560
tons imported in the whole year of 2013-14.
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.
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.
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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
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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.
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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
Global Rice Quotes
November 25th, 2015
Long grain white rice - high quality
Thailand 100% B grade 360-370 ↔
Vietnam 5% broken 370-380 ↑
India 5% broken 345-355 ↔
Pakistan 5% broken 320-330 ↑
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Myanmar 5% broken 405-415 ↔
Cambodia 5% broken 415-425 ↔
U.S. 4% broken 485-495 ↓
Uruguay 5% broken 535-545 ↔
Argentina 5% broken 530-540 ↔
Long grain white rice - low quality
Thailand 25% broken 335-345 ↔
Vietnam 25% broken 355-365 ↔
Pakistan 25% broken 295-305 ↑
Cambodia 25% broken 400-410 ↔
India 25% broken 325-335 ↔
U.S. 15% broken 515-525 ↑
Long grain parboiled rice
Thailand parboiled 100% stxd 350-360 ↔ Pakistan parboiled 5% broken stxd 405-415 ↔ India parboiled 5% broken stxd 340-350 ↔ U.S. parboiled 4% broken 590-610 ↔ Brazil parboiled 5% broken 545-555 ↔ Uruguay parboiled 5% broken NQ ↔ Long grain fragrant rice Thailand Hommali 92% 700-710 ↓ Vietnam Jasmine 445-455 ↔ India basmati 2% broken NQ ↔ Pakistan basmati 2% broken NQ ↔ Cambodia Phka Mails 830-840 ↔ Brokens Thailand A1 Super 325-335 ↔ Vietnam 100% broken 330-340 ↔ Pakistan 100% broken stxd 285-295 ↑ Cambodia A1 Super 355-365 ↔ India 100% broken stxd 285-295 ↔ Egypt medium grain brokens NQ ↔ U.S. pet food 330-340 ↔ Brazil half grain NQ ↔ All prices USD per ton, FOB vessel, oryza.com
