22nd june 2015 daily exclusive oryza e rice newsletter by riceplus magazine

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June 22 ,2015




Nepal Plans to Launch Three-Year Paddy

Mission to Boost Production, Cut Down

Imports

Jun 19, 2015

The government of Nepal plans to launch the first paddy mission from the fiscal year 2015-16

(August 2015 – July 2016) to boost output and help the country become self-sufficient in rice

production, according to local sources.A three-year time frame has been set to implement the

mission in about 670,000 hectares in 13 Tarai districts. The total planned area will be divided

into five cluster areas—Jhapa, Sunsari and Morang; Bara, Sarlahi and Parsa; Rupandehi and

Kapilvastu; Dang, Banke and Bardia and Kailali Kanchanpur.




The government aims to increase the average yield to around 3.43 tons per hectare in the first

year (i.e, 2015-16) from the current 3.17 tons, and further increase to 3.57 tons per hectare and

3.66 tons per hectare in the subsequent two years respectively. It also aims to increase the paddy

output from the current 4.78 million tons to around 4.94 million tons, 5.22 million tons and 5.4

million tons respectively in the three years.

The Nepalese government is planning to reduce the imports to around 277,000 tons in the first

year, 96,000 in the second year and become self-reliant in rice or be able to export about 10,000

tons of rice in the third year. Currently, Nepal currently imports about 530,000 tons of rice

annually.It has allocated around Rs.100 million (around $983,478) for the three-year project, but

the actual requirement for the project has to be assessed, the Assistant Spokesperson of the

Ministry of Agricultural Development was quoted. He noted that the targets are not too

ambitious and can be achieved. He added that the government is also planning to launch ―chaite

dhan‖ scheme under which it would plant paddy from mid-March to mid-April, in areas where

there are irrigation facilities.

The official also noted that the government would support farmers by providing improved

varieties of paddy seeds and subsidies on farm machinery, irrigation and other tools in the

selected areas. It would also train farmers in these areas.The Agriculture Ministry estimates

Paddy production in 2014-15 to decline about 5.71% to around 4.78 million tons from around

5.04 million tons in 2013-14 due to a late monsoon and untimely rainfall.USDA estimates

Nepal’s MY 2014-15 (October 2014 – September 2015) paddy rice production to decline to

about 4.655 million tons (around 3.1 million tons, basis milled) from an estimated 5 million tons

(around 3.36 million tons, basis milled) in MY 2013-14. It estimates Nepal to import around

350,000 tons of rice in 2015.

Oryza Global Weather Outlook

Jun 19, 2015

In China, heavy rain is expected across South-eastern and South of the Yangtze River, North-

western Guangxi and Southern Gansu on Friday. Thereafter, heavy rain is expected across

eastern Southwest China, northern South of the Yangtze River during the next two days.

Light rain is expected across Thailand during next two days. Thereafter, isolated heavy rain is

expected in many parts of Thailand during Monday to Wednesday.




Scattered showers and thunderstorms are expected across Vietnam on Friday and Saturday.

Heavy rain is expected across west coast in India from Friday to Sunday. Light rain showers are

also expected across plains of northwest India, east and northeast adjoining central India on

Monday and Tuesday.

Weather is expected to remain dry in Pakistan during the next two days.

In Bangladesh, light rain is likely to occur at a few places over Rangpur, Chittagong & Sylhet

divisions and at one or two places over Rajshahi, Dhaka, Khulna & Barisal divisions with

moderately heavy falls at places over Sylhet division.

Scattered showers and thunderstorms are expected across Indonesia on Friday and Saturday.

In the U.S., scattered showers are expected across the north and west portion of Delta during

today and tomorrow.

Oryza Weekly: Increased Demand from

Philippines, On El Niño Concerns, May Push

Up Global Rice Prices

Jun 19, 2015

The Oryza White Rice Index (WRI), a weighted average of global white rice export quotes,

ended the week at about $398 per ton, down about $5 per ton from a week ago, down about $8

per ton from a month ago and down about $62 per ton from a year ago.The USDA forecasts

2015-16 global milled rice production to reach a record high of 481.7 million tons due to higher

acreage (a record 161.8 million hectares). The USDA forecasts global rice trade to decline in

2016 to about 42.4 million tons, down about 2% from 2015.

The National Food Authority Council of the Philippines has decided to import 100,000 tons of

25% long-grain white rice from Vietnam at a higher price than its reference prices of $408.14

after receiving higher bids twice in the June 16 G2G tender. The tender was originally planned

for 250,000 tons and the NFA imported 150,000 tons of rice from Vietnam under government-to-

government (G2G) tender.




The NFA has approved private traders to import up to 805,200 tons of 25% well-milled rice

under the WTO minimum access volume to maintain buffer stocks and avoid potential price

spikes amid fears of an impending El Nino weather pattern.

The agency is authorized to import another 250,000 tons if the El Nino weather pattern

intensifies.A high demand from the Philippines is expected to push up the global rice prices,

which have been subdued since the beginning of this year due to increased supplies and lower

demand.

Thailand




Thailand 5% broken rice is today shown at about $365 per ton, up about $5 per ton from a week

ago, down about $10 per ton from a month ago and down about $20 per ton from a year ago.

Thailand’s Public Warehouse Organization (PWO) has declared about 650,000 tons of rice as

rotten, which is not fit for human and animal consumption or for ethanol production. The rice

can, however, be used as fuel in electricity generation.

Domestic paddy prices are expected to increase by about 10% to 8,500 baht per ton (around

$253) due to reduced supplies from the main crop as well as potential impact of the El Nino,

Bloomberg quoted the Deputy Secretary General of the Office of Agricultural Economics (OAE)

as saying. The OAE is reportedly expecting the paddy output from the 2015 main crop (which

accounts for about 70% of the total output) to drop by 600,000 tons or about 2% to around 26.5

million tons, from around 27.1 million tons from last year. The government has been instructing

famers in 22 provinces of the Central region to delay planting until July for the main rice crop

due to lesser water levels in the reservoirs of the Cho Phraya river basin. It has decided to cut

water supplies to more than half of the rice land in the region.

Thailand’s third auction for about 1.06 million tons of rice this year has attracted less interest

than the first two auctions.

India

India 5% broken rice is today shown at about $370 per ton, down about $10 per ton from a week

ago, down about $5 per ton from month ago, and down about $70 per ton from a year ago.

Planting for India 2015-16 Kharif (main) rice crop (June - December) which began on May 8,

2015 is picking up fast and stands at around 833,000 hectares as of June 19, 2015; up about 1.6%

from around 820,000 hectares planted during the same period last year, and up about 77% from

last week’s 471,000 hectares, according to preliminary data released by the Indian Agriculture

Ministry.

According to Bloomberg, India received 11% above normal rainfall as on June 17, providing

required support to the kharif rice and other crop plantings.

The government of India approved a proposal to raise the minimum support price of paddy for

the 2015-16 kharif marketing season. The new price is about 3.6% higher, bringing it to about

$220 per ton.




Vietnam

Vietnam 5% broken rice is today shown at about $350 per ton, down about $5 per ton from a

week and a month ago and down about $50 per ton from a year ago.

In the period January 1-June 11, Vietnam exported about 2.123 million tons of rice, down about

29.6% from the first half of 2014. Average rice export price so far this year stands at around

$421 per ton (FOB), down about 2.3% per ton from the same time last year.

Pakistan

Pakistan 5% broken rice is today shown at about $380 per ton, down about $5 per ton from a

week ago, down about $20 per ton from a month ago and down about $65 per ton from a year

ago.

Pakistan has exported around 3.71 million tons of rice (around 458,995 tons of basmati and

around 3.25 million tons of non-basmati) in the first eleven months of FY 2014-15 (July 2014 -

June 2015), up about 6% from around 3.49 million tons (around 613,655 tons of basmati and

around 2.88 million tons of non-basmati) exported during the same period in FY 2013-14.

The Rice Dealers Association in Pakistan is urging the government to revive the Rice Board in

order to address various problems faced by the country’s rice sector. The Federation of Pakistan

Chambers of Commerce and Industry (FPCCI) has also urged the government to set up a rice

development board, which can address all the issues related to the rice sector

The government of Pakistan is planning to enact a Geographical Indication Law (GI Law) to

bring international distinction to indigenous Pakistan products, including basmati rice.

Central & South America

Brazil 5% broken rice is today shown at about $550 per ton, unchanged from a week and a

month ago and down about $115 per ton from a year ago.

Brazil’s Conab has forecasted the country’s 2014-15 paddy rice production at around 12.544

million tons, up about 3.5% from 2013-14.




The Brazilian paddy rice index maintained by CEPEA reached around 33.71 real per 50

kilograms as of June 15, 2015, up about 1.6% from around 33.18 real per 50 kilograms recorded

on June 8, 2015.

In terms of USD per ton, the index reached around $217 per ton on June 15, 2015, up about 2%

from around $213 per ton recorded on June 8, 2015.

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

extend the oil-for-rice PetroCaribe deal, which will expire this year. Under this deal, Venezuela

buys rice from Guyana and sells oil to Guyana.

Five percent broken rice from Uruguay and Argentina is today shown at about $565 per ton,

unchanged from a week and a month ago, and down about $60 per ton from a year ago.

U.S.

U.S. 4% broken rice is today shown at about $455 per ton, down about $15 per ton from a week

ago, down about $20 per ton from a month ago and down about $125 per ton from a year ago.

Other Markets

The European Union is considering importing aromatic rice from Myanmar as the demand for

aromatic rice in the region is increasing.

The European Farmers’ Union COPA is opposing a mid-term review of the current EU Common

Agricultural Policy, which was approved in 2014 and is valid until 2020.

The Myanmar Rice Federation (MRF) has confirmed that the country has sufficient rice stocks

to meet the local demand and the rising rice prices are not because of shortage of stocks. The

recent increase in local rice prices is attributed to increased exports and appreciation of the U.S.

dollar against the kyat.

Iraq has invited international tenders to purchase about 30,000 tons of rice from the U.S.,

Uruguay, Argentina, Brazil, and India, with bids due June 28.

The government of Indonesia aims to procure 2 million tons of rice from local farmers during

the dry season (June-mid-December). It has issued a new regulation on basic commodities




prices, which allows the government to anticipate price hikes of certain commodities such as

rice, whose prices peak during the festive seasons

The government of China is taking steps to enhance its grain storage capacity to about 95% of

the total grain output by 2020 in order to ensure grain supply and safety.

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

paddy rice acreage has dried up as a result. Representatives from the UN's Food and Agricultural

Organization (FAO) who visited North Korea to assess the impact of a reported drought on the

country's crop production estimated the country's 2015 paddy production to decline about 12% to

around 2.3 million tons from around 2.6 million tons in 2014.

The boro paddy and rice (January-May) procurement drive in Bangladesh has not provided the

expected respite to farmers in terms of prices. The government is reportedly 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.

The government of Nepal has planned to launch the first paddy mission from the fiscal year

2015-16 (August 2015 – July 2016) to boost output and help the country become self-sufficient

in rice production and cut down imports.

The UN’s FAO estimates Madagascar’s 2015 paddy rice production will be below-average due

to erratic rainfall and dry conditions.

The UN’s FAO has agreed to support the rice sector in Zambia under its technical cooperation

program.

Oryza Afternoon Recap - Chicago Rough

Rice Futures End Week on Bearish Note as

Negative Grains Exert Downward Pressure

Jun 19, 2015




Chicago rough rice futures for Jul delivery settled 9.5 cents per cwt (about $2 per ton) higher at

$9.720 per cwt (about $214 per ton). Rough rice futures erased yesterday’s gains and once again

moved lower, adding to losses sustained earlier in the week. The market remains range bound

and will technically remain so until either support at $9.400 per cwt (about $207 per ton) is

breached or resistance at $10.000 per cwt (about $220 per ton) is taken out. The other grains

finished the day mostly lower, with wheat being the only contract to manage to finish with a

slight gain; Soybeans closed about 0.6% lower at $9.7150 per bushel; wheat finished about 0.1%

higher at $4.8850 per bushel, and corn finished the day about 1.3% lower at $3.5325 per bushel.

U.S. stocks traded mildly lower on Friday following the Nasdaq's record close as investors eyed

developments in the Greece debt talks. At an emergency summit on Monday, euro zone officials

are expected to discuss how to handle a Greek default if no new Greek reform proposals arrive,

Reuters reported.

Athens has said without further aid, it will be unable to make a 1.5 billion euro ($1.7 billion)

debt payment to the International Monetary Fund due on June 30. Meanwhile, large deposit

outflows from Greece have raised concerns that Athens may have to implement capital controls.

The European Central Bank expanded emergency funding for Greek banks as savers pulled out

1.2 billion euros in a single day on Friday, bankers said in a Reuters report, but Prime Minister

Alexis Tsipras insisted the nation's future in the euro was secure. Friday also marks quarterly

expirations, which will likely add some volatility. The major averages remain on track for

weekly gains of about 1% or more. The Dow Jones Industrial Average traded down 57 points or

0.31%, at 18,058. The S&P 500 traded down 7 points, or 0.33%, at 2,114, with energy leading

seven sectors lower and health care leading advancers. The Nasdaq traded down 17 points, or

0.30%, at 5,119. Gold is trading nearly flat, crude oil is seen trading about 2.1% lower, and the

U.S. dollar is seen trading at about even at about 1:00pm Chicago time.Thursday, there were

1,632 contracts traded, down from 2,137 contracts traded on Wednesday. Open interest – the

number of contracts outstanding – on Thursday decreased by 331 contracts to 10,453




Government of Thailand Expects Domestic

Paddy Prices to Increase About 10% Due to

Drought

Jun 19, 2015

The domestic prices of paddy are expected to increase by about 10% to 8,500 baht per ton

(around $253) due to lesser supplies from the main crop as well as potential impact of the El

Nino, Bloomberg quoted the Deputy Secretary General of the Office of Agricultural Economics

(OAE).The OAE is reportedly expecting the paddy output from the 2015 main crop (which

accounts for about 70% of the total output) may drop by 600,000 tons or about 2% to around

26.5 million tons, from around 27.1 million tons from last year. The government has been




instructing famers in 22 provinces of the Central region to delay planting until July for the main

rice crop due to lesser water levels in the reservoirs of the Cho Phraya river basin. It has decided

to cut water supplies to more than half of the rice land in the region.

Of the 1.184 million hectares of rice land in the region, about note that about 4 million rai

(around 640,000 hectares) is reportedly unaffected by the reduction in water supplies.However,

farmers in the affected regions are not happy with the government's instructions since some of

them had already invested in land preparation and other initial work. The Leader of the Farmers

Association noted that since agriculture is livelihood for many of the farmers. He demanded a

compensation of about 3,000 baht per rai (around $557 per hectare) for farmers in the affected 22

provinces, as well as a three-year debt moratorium including interest as farmers will not be able

to earn sufficiently if they are not allowed to grow crops.

Some farmers are also planning to go ahead with their plans and take a risk.USDA estimates

Thailand to produce 28.4 million tons of paddy rice (around 18.75 million tons, milled basis) and

export around 11 million tons of rice in MY 2014-15 (January - December 2015).

Indonesia Issues New Regulation on Basic

Commodities Prices

Jun 19, 2015




The government of Indonesia has issued a new regulation on basic commodities prices, which

allows the government to anticipate price hikes of certain commodities such as rice, whose prices

peak during the festive seasons, according to local sources.The regulation will allow the

government to ensure adequate supplies and regulate the prices of key commodities such as rice,

soy, red chilli, shallots, sugar, cooking oil and flour, as well as livestock including meat, chicken,

eggs and fish, in certain situations where price fluctuations are expected to occur.

It was signed by the President on June 15 in order to ensure adequate supplies during the festive

month of Idul Fitri as well as curb price fluctuations, a Presidential Communications team

member was quoted as saying. Usually demand surges considerably during the month of

Ramadhan.

"This regulation gives the authority to the government to set special prices ahead of, on, or after

religious holidays or during periods of price volatility," said the official. The government is

currently waiting for the price ceiling regulation from the Finance Ministry. The Trade Ministry

is expected to deal with the technical aspects of the regulation implementation, said the

official. It also bans stockpiling of these commodities in times of scarcity and price

fluctuations.Owing to price hikes of important commodities, Indonesia's annual inflation rate

increased to a five-month high of 7.15% in May.

Average rice prices have also been increasing since September 2014 and have reached record

levels in March 2015. However, since April, prices reversed direction due to the government

intervention as well as increased supplies from the 2015 main season rice crop. In June 2015,

average rice prices stood at around 9.894 million Rupiah (around $740) per ton, up about 12%

from their year ago levels.Some analysts noted that the policy is good from the customer point of

view as it aims at maintaining price stability, but seems to be a hugely interventionist policy

from the businesses point of view.Meanwhile, the Head of Distribution and Stockpile at

Agriculture Ministry's Food Sufficiency agency told local sources that Indonesia may have about

10.9 million tons of rice surplus in 2015 according to Bloomberg. He also noted that current rice

stocks would be sufficient for the June-July period of Ramadan and Eid al-Fitr.

Indonesia's new President who took over in October this year is keen on achieving self-

sufficiency in basic food items such as rice, corn and sugar over the next four years. He is

particularly keen on avoiding rice imports. So far, the government has not imported any rice this

year. But analysts say less stocks and lower production due to El Nino weather pattern could

prompt the government to import rice in the second half of the year.USDA estimates Indonesia




to produce around 36.3 million tons of rice, basis milled (around 57.17 million tons, basis

paddy), and import around 1.25 million tons of rice in MY 2014-15 (October - September).

FAO Estimates North Korea’s 2015 Rice

Production to Decline 12% y/y to 2.3 Million

Tons Due to Drought

Jun 19, 2015

Representatives from the UN's Food and Agricultural Organization (FAO) who visited North

Korea to assess the impact of a reported drought on the country's crop production estimated the

country's 2015 paddy production to decline about 12% to around 2.3 million tons from around

2.6 million tons in 2014, according to Reuters.Based on preliminary information gathered from




the government and farmers, the FAO noted that there is a "severe contraction" in the supply of

rice seeds in the country.

They noted that drought conditions coupled with inefficient management of irrigation canals and

other farm infrastructure has been worsening the crop production scenario.The official Korean

Central News Agency (KCNA) reported earlier this week that North Korea is experiencing worst

drought conditions in a century and about 30% of the country's rice land has dried up. According

to the agency, water level of reservoirs is very low and rivers and streams are also drying up.

Official sources have predicted that the production of rice would 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.In May this year, the FAO reported that food insecurity in North Korea is

high and number of hungry people in the country has more than doubled to around 10.5 million

between 1990 and 2014.

K-Pop Fans Donate Rice

Jun 19, 2015




Fans of K-pop (Korean pop) band 2AM recently used rice to show their appreciation for singer

and musical actor Jo Kwon. Kwon is starring in a new musical called Chess, and his fans sent

out many sacks of rice to donate in celebration of the premiere of the play, which starts June

19. The sacks of rice were sent to the Sejong Center Grand Theater in Seoul, where the play will

be showing.

Kwon showed his approval of the act by uploading a photo of the donated rice to his Instagram

account.This isn’t the first time K-pop fans have used rice donations to show their gratitude for

the musicians – fans of band Big Bang rounded up 12.7 tons of rice donations in 2012, and fans

of Super Junior-M donated 1.3 tons of rice earlier this year. These ―fan-rice towers‖ are

common in Korea, where fans donate rice to their favorite musicians who then donate the rice to

charitable institutions.

Image Source: Instagram, @kwon_jo

Pakistan Rice Exports Continue to Decline

for Second Consecutive Month in May 2015

Jun 19, 2015

Pakistan's total exports declined sharply in May 2015, continuing to decline for the second

consecutive month after increasing about 33% m/m in March 2015.Pakistan exported around

263,044 tons of rice (including basmati and non-basmati) in May 2015, down about 27% from

around 360,446 tons exported in April 2015, according to provisional data from the Pakistan

Bureau of Statistics (PBS). In terms of value, Pakistan's rice export earnings declined about 16%

to around $152 million in May 2015 from around $180 million earned in April 2015.

Year-on-year, Pakistan’s exports increased about 11% from around 236,843 tons exported in

May 2014. In terms of value, they declined about 7% from around $163 million in May

2014.Pakistan exported around 30,944 tons of basmati rice in May 2015, down about 10% from

around 34,568 tons exported in April 2015, and down about 57% from around 72,573 tons

exported in May 2014. In terms of value, Pakistan's basmati rice exports earned $38.3 million in

May 2015, down about 10% from around $42.5 million earned in April 2015, and down about

57% from around $88 million earned in May 2014.




Pakistan exported around 232,100 tons of non-basmati rice in May 2015, down about 29% from

around 325,878 tons exported in May 2015 and up about 41% from around 164,270 tons in May

2014. In terms of value, Pakistan's non-basmati rice exports earned $114 million in May 2015,

down about 17% from around $137.5 million earned in April 2015, and up about 53% from

around $74.63 million earned in May 2014.

Pakistan has exported around 3.71 million tons of rice (around 458,995 tons of basmati and

around 3.25 million tons of non-basmati) in the first eleven months of FY 2014-15 (July 2014 -

June 2015), up about 6% from around 3.49 million tons (around 613,655 tons of basmati and

around 2.88 million tons of non-basmati) exported during the same period in FY 2013-14. In

terms of value, Pakistan's exports earned around $1,902 million (around $487 million from

basmati and around $1,415 million from non-basmati) in July 2014 - May 2015, down about

5.5% from around $2,013 million (around $703 million from basmati and around $1,310 million

from non-basmati) earned during the same period in 2013-14.

22nd june 2015 daily exclusive oryza e rice newsletter by riceplus magazine

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