#Oryza June 2014 #Rice Market #Review 08.07.2014 CHART The Oryza White Rice Index, a weighted average of global white rice export quotes, ended the month of June at $461 per ton, up $1 per ton from a month ago and down $13 per ton from a year ago. Asian quotes remained fairly stable in June. Only in Thailand did rice quotes have some momentum, due to temporary suspension of rice sales from government stocks. The IGC has estimated 2014 world rice trade at a record 40 million tons, up about 5% from 38 million tons in 2013 due to increased imports by Far East Asian and African countries. The IGC estimates 2013-14 global rice production at about 476 million tons, up about 1% from about 472 million tons in 2012-13 mainly due to improved harvests in India, Vietnam and Pakistan. And world rice ending stocks in 2013-14 is expected to decline to about 109 million tons from about 110 million tons in the previous year, according to the IGC. Thailand Thailand 5% broken rice ended the month of June at about $385 per ton, up about 1% from a month ago and down about 20% from a year ago. Thailand’s general election may be held October 2015 and interim cabinet is expected by September 2014, Thailand military government announced at end of June. Separately, the Bank of Agriculture and Agricultural Cooperatives in Thailand has completed all the outstanding payments to rice farmers five days ahead of the scheduled date of June 22, 2014, according to local sources. The bank had paid about 90 billion baht (about ($2.8 billion) to about 800,000 farmers, who pledged paddy rice from the 2013-14 main crop (October 2013 - February 2014) since the military junta has taken over on May 22 and prioritized payments to rice farmers. The Thai military government has announced cultivation subsidy and soft loans as measures to help rice farmers after recently abandoning the populist rice pledging scheme, according to local sources. The Bank of Agriculture and Agricultural Cooperatives has also offered about 137 billion baht (about $4 billion) loans to rice farmers as a part of the military governments plans to provide measures such as cultivation subsidy and soft loans to help rice farmers. Meanwhile, the Thai Rice Exporters Association expected that Thailand will export about 9 million tons rice in 2014. Thailand paddy rice production is estimated to reach about 38.8 million tons in crop year 2014-15 (January 2014 - December 2014), slightly more than the estimated 38.79 million tons in 2013-14, despite a 1% decline in planted area this year, according to data from the Office of Agricultural Economics . In beginning of the month, Thailands National Anti-Corruption Commission will probe assets and liabilities of the former Prime Minister, Yingluck Shinawatra, two of her former Commerce Ministers and two of her Deputy Commerce Ministers who were involved in framing policy for rice pledging scheme as well as sale of rice stocks, according to local sources. India India 5% broken rice ended the month of June at about $435 per ton, up about 1% from a month ago and down about 2% from a year ago. India’s rice stocks in the central pool as of June 1, 2014 were about 28.03 million tons (including a milled equivalent of about 11.361 million tons of paddy), down about 16% from about 33.306 million tons recorded during the same time last year and double the required buffer and strategic reserve norms of about 14.2 million tons for this time of the year, according to data from the Food Corporation of India. Meanwhile, India exported a total of 10.78 million tons of rice in fiscal year 2013-14 (April 1, 2013 - March 31, 2014), up about 6% from about 10.15 million tons exported in FY 2012-13, according to data from the Agricultural and Processed Food Products Export Development Authority (APEDA) in India. The Indian government is planning to release about 5 million tons of rice from central reserves into the open markets, to prevent rice price hikes due to likely El Nino-triggered poor monsoons, according to sources. Separately, the Indian government has increased the minimum support price (MSP) for paddy rice to about Rs.1,360 per quintal ($226 per ton), up about 3.8% from about Rs.1,310 per quintal (about $218 per ton) for common grade paddy and the MSP for Grade A paddy to about Rs.1,400 per quintal (about $233 per ton), up about 4% from about Rs.1,345 per quintal (about $223 per ton), for the 2014-15 crop year (October - September). Meanwhile, some analysts are expecting India wholesale rice prices to remain stable in 2014 despite below-normal monsoon as predicted by the Indian Meteorological Department, as the government has enough rice stocks. Separately, the Indian Meteorological Department has predicted a 60% probability of El Nino occurring this monsoon season (June - September). However, The Indian government is ready with contingency plans for dealing with El Nino triggered poor monsoon rains, according to the Indian Agriculture Minister. The Indian state of Punjab, the largest producer of basmati rice in the country, has proposed to double area under basmati to one million hectares from the current 500,000 hectares, and cut-down area under non-basmati paddy by about 120,000 hectares over the next couple of years, because some new high-yielding basmati variety will require less irrigation than common rice, according to local sources. Vietnam Vietnam 5% broken rice ended the month of June at about $410 per ton, up about 1% from a month ago and up about 11% from a year ago. Vietnam exported about 3 million tons of rice in first half of the year 2014, down about 14% from about 3.5 million tons of rice exported during same time last year, according to data from the Vietnam Food Association (VFA). The average rice export price so far in this year stands at about $432 per ton (FOB), up about $1 per ton from about $431 per ton recorded during same time in last year. The Vietnam government has issued a blueprint to develop domestic rice market as well as expand trade promotion activities to increase Vietnamese rice exports, according to local sources. In this plan the government will study the current and past rice export situation and will recommends solutions to expand exports in the future. They will also work towards striking a balance between the domestic markets supply and demand for commercial rice and exports markets. Pakistan Pakistan 5% broken rice ended the month of June at about $445 per ton, down about 3%from a month ago and up about 5% from a year ago. According to the FAO, Pakistan is expected to export about 3.3 million tons of rice in 2014, up about 5% from last year. The FAO estimates that Pakistan will produce about 9.8 million tons paddy in 2014, up about 2% from last year. Meanwhile, The National Space Agency of Pakistan (SUPARCO) has estimated Pakistan FY 2013-14 (July - June) milled rice production at about 7 million tons from an estimated area of about 2.879 million hectares and an estimated yield of about 2.5 tons per hectare. Separately, Pakistans opposition party, also urged the government to fix minimum support price (MSP) for basmati rice at Rs.3,000 per 40-kilogram bag, or Rs.75,000 (about $755) per ton to help rice farmers and exporters become more competitive versus Indian and Thai exporters, according to local sources. The party leader also urged the government to fix the MSP for non-basmati IRRI rice at Rs.1,500 per 40-kilogram bag, or Rs.37,500 (about $378) per ton. Meanwhile, Pakistan rice sector has been ignored in the recently announced budget despite it being the second largest foreign exchange earner. The Pakistan Agricultural Storage and Services Corporation is planning to re-open tender to sell about 201,000 tons of rice, as the previous tender fetched too low price, according to local sources. Cambodia Cambodia 5% broken rice ended the month of June at about $445 per ton, up about 1% from a month ago. Cambodia has joined hands with Thailand to build a state-of-the art rice milling and refining factory with an estimated investment of about $50 million according to some local sources. The factory will be operational by the first quarter of 2015 and will be capable of processing about 300,000 tons of rice annually. Separately, Cambodia rice exporters fear that the Indian governments decision to release 5 million tons of rice in the open market to control price hikes may have a spillover effect on global rice exports, according to local sources. Meanwhile, the Acting Secretary of the Cambodian Rice Federation told local media sources though it is immediately difficult to assess the impact of Indias move on Cambodias exports; he expressed concern that the move will affect global rice prices. Brazil According to CONAB, Brazil paddy rice production is expected to reach at about 12.25 million tons, up about 4% from about 11.82 million tons produced in last year. Meanwhile, Brazil has exported about 557,063 tons of rice in January - May 2014, up about 35% from about 412,639 tons exported during the same period last year, according to data released by the Rice Institute of Rio Grande do Sul (IRGA). U.S. U.S. 4% broken rice ended the month of June at about $575 per ton, down about 2% from a month ago and down about 7% from a year ago. The U.S. International Trade Commission, an independent, nonpartisan, fact-finding federal agency, has launched an investigation to study global competitiveness of the U.S. rice industry, on request from the U.S. Trade Representative, the House Committee on Ways and Means. The agency will hold a public hearing as part of the study on September 10, 2014, and will also encourage written submissions related to the study before December 9, 2014, which would be made available for public inspection. The agency will focus its study during the period 2009 - 2013 and will submit its findings to the Committee by April 14, 2015. China According to the FAO, Chinas paddy rice production is expected to reach at about 207.440 million tons in 2014, up about 2% from last year due to higher plating area expected favorable weather conditions and continued government support to the rice sector. Meanwhile according to data from China Customs General Administration, China has imported about 1.08 million tons rice in January-May, 2014, down about 7% during the same period in last year and exported about 63,771 tons of rice in January - May 2014, down about 75% from about 256,623 tons exported during the same period in 2013. Philippines Total rice stocks in the Philippines as of May 1, 2014 reached at about 2.52 million tons, up about 16% from about 2.18 million tons recorded in April 2014, and down about 3% from about 2.61 million tons recorded in May 2013, according to the Philippines Bureau of Agricultural Statistics. In beginning of the month, the Philippines government unveiled the road map for its new rice sufficiency program, under which it targets to produce about 19.07 million tons of paddy rice in 2014, up about 3.4% from about 18.44 million tons produced in 2013, according to local sources. Separately, the Philippines is set to import another 250,000 tons of rice in 2014 supplementing the 800,000 tons of rice already being imported from Vietnam to boost the current buffer stock and control increasing prices, according to local sources. The World Trade Organization Committee on Trade and Goods (WTO-CTG) has allowed the Philippines to continue imposing quantitative restrictions (QRs) on rice imports until 2017, which expired in June 2012; the Philippines Agriculture Secretary was quoted as saying in a media briefing. The Philippines has also reduced tariffs on rice imported under the Minimum Access Volume (MAV) to 35% from the previous 40%, according to local sources. Europe European Union milled rice production is expected to decline to about 1.78 million tons in the MY2013-14 (September 2013 - August 2014), down about 6% from about 1.89 million tons produced in MY 2012-13, according to the latest balance sheet published by the EU Directorate General for Agriculture and Rural Development. Meanwhile, the European Union has imported about 820,438 tons of milled rice in September 1, 2013 - June 17, 2014, up about 17% from about 701,855 tons imported during the same period last year, according to the EU data. Separately, in an attempt to support national rice growing sector, Italy is against duty free import of rice by the European Union from Cambodia. Other Markets The Japan International Cooperation Agency (JICA), which is assisting the Nigerian government toward achieving self-sufficiency in rice production and banning rice imports by 2015, is currently focusing on providing access to quality rice seeds of improved rice varieties to Nigerian farmers, according to local sources. The JICA said that a good rice seed sector is important for Nigeria to achieve its target. Rwanda has increased tariffs on rice imported from outside the East African Community (EAC), of which Rwanda is a member, to 45% from the current 30% to protect local farmers, according to local sources. Rice industry officials and analysts are expecting Indonesia to more than double its rice imports to about 1.5 million tons in 2014 from an estimated 700,000 tons imported in 2013 ahead of a general election and El Nino, according to some local sources. Analysts expect that the outgoing administration could ease its rice sufficiency-targets and import about 1.5 million tons of rice to prevent food inflation and social unrest in the country. Meanwhile, the IRRI said, there are lapses in the rice strategy of Indonesia, according to local sources. It added that Indonesia is the worlds third largest rice producer but it needs to import rice every year due to increasing consumption and inefficient production techniques. The IRRI said that Indonesia needs to focus on increasing production in line with growing consumption needs and become self-sufficient in rice production. Separately, the Indonesian government has decided to amend its Rice for the Poor program (Raskin) based on recommendations by the Corruption Eradication Commission (KPK), according to local sources. South Korea may have to reduce its own rice production this year as the country is likely to face a rice surplus, thanks to increase in imports and a decline in the countrys rice consumption, as the countrys self-sufficiency rate for rice may touch 92% this year, crossing the 90% mark of the last four years, according to some local sources. Meanwhile, South Korea has excluded rice and other rice related products from the Korea-Colombia Free Trade Agreement. Separately, a survey conducted in a South Korea showed that nearly 83.2% of respondents preferred locally produced rice to imported rice, 2.2% of them consumed imported rice occasionally or regularly, and 4.1% of them liked to consume imported rice in near future. Separately, South Korea will also announce its stance on rice import market liberalization before the end of July 2014 as the countrys current import quotas expire at the end of this year and it has to specify to the World Trade Organization whether it would continue with the quotas or would liberalize the rice sector imposing high tariffs before September 2014. Australias paddy rice production in MY 2013-14 (April 2013 - March 2014) is estimated to decline to about 825,000 tons, down about 29% from about 1.161 million tons produced in MY 2012-13, according to data from the Australian Bureau of Agricultural and Resource Economics and Sciences. FAO estimates that Sri Lanka will produce about 3.9 million tons paddy in 2014, down about 16% from about 4.62 million tons produced in 2013, due to significant reduction in the output from the 2013-14 Maha crop, which contributes to over 60% of the countrys annual paddy rice production. Meanwhile, according to the government sources, Sri Lanka will import about 100,000 tons of rice to meet the requisite demand and curb price increases in the domestic market. According to the Bangladesh Food Ministry, the country imported about 374,560 tons of rice in FY 2013-14 (July 2013 - June 2014) as on June 5, 2014, up about 13 times from about 28,812 tons imported during the same period in FY 2012-13. Separately, the Bangladesh Rice Research Institute has introduced Food Yield Gap Minimization projects to boost Bangladesh paddy production by 7.3 million tons, according to local sources. Bangladesh has also extended the ongoing ban on non-fragrant rice exports to the fiscal year 2014-15 (July 1, 2014 - June 30, 2015) in order to ensure supplies and control price hikes in the local market, according to a gazette notification issued by the Commerce Ministry last week, local sources report. oryza/reports/monthly-review/oryza-june-2014-rice-market-review
Posted on: Wed, 09 Jul 2014 14:37:26 +0000
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