16th april,2015 daily exclusive oryza rice e newsletter by rice

Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com

1

Daily Exclusive ORYZA Rice

Newsletter

Volume 5, Issue I

April 16, 2015


2

Ending Levy Rice System will Have Negative

Repercussions on Indian Farmers and

Consumers, Warn Experts

Apr 15, 2015

The government of India's decision to end the levy rice procurement system from the 2015-16

kharif marketing season (October - September) is likely to negatively impact rice farmers and

consumers significantly, experts have warned, according to local sources.

The government felt the need to abolish the levy rice procurement as there was no proper

supervision system and the millers were often not paying Minimum Support Price (MSP) to the

farmers and were selling the better-quality grain in the open market. The decision was mainly

meant to ensure fair prices to farmers.However, experts say with the absence of levy rice

procurement system, farmers have to depend on government agencies and traders and millers to

sell their paddy. Most of the times, traders and millers avoid paying minimum purchase price

(MSP) to farmers, they say. In KMS 2013-14, most of the traders paid less than Rs.1,200 per

quintal against the prescribed MSP of Rs.1,360 per quintal and Rs.1,400 per quintal of common

and grade A paddy respectively, says a field officer overseeing procurement in Telangana.


3

They say consumers will also have to bear consequences of this decision in the form of high

prices. “Denial of MSP to farmers by traders and millers, however, will not provide any respite

to the end-consumers. Millers will have the freedom to sell the rice stocks anywhere and resort to

hoarding to create artificial shortage and increase the price heavily,” sources in the Civil

Supplies Department were quoted as saying.Under the levy rice procurement system, millers

purchase paddy from farmers at MSP and the state governments in turn procure milled rice from

millers to meet their public distribution needs. Percentage of levy rice procured from millers

differs from state to state and used to be in the range of 30-75% of total procurement in

respective states. However, in August 2014, the government of India capped the levy rice

procurement from millers at 25% for the 2014-15 procurement season.

Japan May Cut Down Rice Purchases from

Thailand if TPP with U.S. Materializes, Say

Experts

Apr 15, 2015

Japan may cut down rice imports from Thailand and increase rice imports from the U.S. if the

Trans-Pacific Partnership (TPP) Agreement between Japan and the U.S. materializes, according


4

to local sources.General Manager at the Norinchukin Research Institute in Tokyo told local

sources that if Japan-U.S. TPP goes through, Japan may prefer to import more rice from the U.S.

rather than from non-TPP countries.

Japan reportedly imported around 330,000 tons of rice from Thailand and around 60,000 tons

from China in FY 2014-15 (April - March), according to data from the Japan Agriculture

Ministry.Experts are expecting Japan to propose to the U.S. about increasing tariff-free rice

imports from Japan in order to take forward the TPP negotiations that have stalled due to an

impasse between the two countries over access to Japan's farm markets. Japan is likely to

increase imports from the U.S. by about 100,000 tons annually. The Japanese Premier is likely to

visit the U.S. shortly as part of efforts to conclude the TPP talks.

Japan is keen on protecting its major farm products, including rice, wheat, barley, beef, port,

dairy products, sugar and starch from foreign competition.Currently, Japan imports about

770,000 tons of rice under the annual minimum market access (MMA) quota as per the World

Trade Organization (WTO) obligations. The WTO regulations require Japan to import half of the

mandatory 770,000 tons from the U.S. The rice imports above the MMA quota carry a

prohibitive import tariff of around 778%.USDA estimates Japan to produce around 7.7 million

tons of rice and import around 700,000 tons of rice in MY 2014-15 (November - October) to

meet annual consumption needs of around 8.2 million tons.

Brazil Exports 262,471 Tons of Rice in First

Three Months of 2015

Apr 15, 2015

Brazil has exported around 262,471 tons of rice in the first three months of 2015, according to

data released by the Rice Institute of Rio Grande do Sul (IRGA).In March 2015, Brazil exported

around 142,643 tons of rice, nearly three times more than 49,915 tons exported in February

2014.Iraq remained the largest importer of Brazilian rice in March 2015 with around 61,765

tons, or about 43% of Brazil's total rice exports during the month. Senegal accounted for around

38,676 tons (about 27% of Brazil's total exports during the month); Netherlands accounted for

around 14,751 (about 10% of Brazil's total exports during the month); Sierra Leone accounted

for 9,191 tons (about 6% of Brazil's total exports during the month); and the Bolivia and Peru

accounted for 4% and 2.5% of Brazil’s total rice exports during March 2015 with around 5,938

tons and around 3,635 tons respectively.


5

Cuba (225 tons), U.S. (1,572 tons), Chile (839 tons), Cape Verde (1,911 tons), Trinidad and

Tobago (178 tons), Canada (635 tons), Angola (557 tons), Belgium (662 tons), Saudi Arabia

(364 tons), and others (1,924 tons) accounted for the remaining 6% of Brazil's total rice exports

in March 2015.Brazil exported around 1.24 million tons of rice in 2014, up about 2.4% from

around 1.209 million tons exported in 2013, according to data from IRGA.

Oryza U.S. Rough Rice Recap - Prices

Unchanged as Farmers Plant Crops

Apr 15, 2015

The U.S. cash market was unchanged today with little to trading to report as farmers focus on

getting their crop in the ground amid prices that look lackluster to those with crop left to

sell.Analysts note that the potential for new Iraq business could give the market what it needs to

move prices higher however some are concerned the addition of origins that were previously

excluded (Pakistan, Cambodia, India) may decrease the chances for the U.S. to be awarded some

of the business.


6

USDA Post Forecasts Dominican Republic's

MY 2015-16 Paddy Rice Production at

776,000 Tons, Down 2% from Last Year

Apr 15, 2015

USDA Post forecasts Dominican Republic's paddy rice production to decline about 2% to around

776,000 tons (around 520,000 tons, basis milled) in MY 2015-16 (January - December 2015)

from around 793,000 tons (around 531,000 tons, basis milled) in the previous year due to a slight

decline in paddy rice acreage.The Post forecasts the country's paddy rice acreage at around

160,000 hectares, down about 1% from around 162,000 hectares last year. Rice is grown in two

cycles in the country with 75% crop grown in the main season and 25% crop grown in the

secondary season.

The average yield has been varying between 4 and 5 tons per hectare over the last ten year. The

Post expects no change in yields due to lack of improvements in irrigation facilities and

production technologies as well as lack of development of new varieties.

The Post estimates the country's milled rice consumption to slightly decline to around 533,000

tons in MY 2015-16 from around 538,000 tons in the previous year due to relatively higher

prices.USDA Post reports that both imports and exports by the Dominican Republic are limited


7

as the country has been self-sufficient in rice production for the last fe years. The country

imported about 13,000 tons in 2014, of which about 92% came from the U.S. It exported around

8,000 tons of rice last year.

Dominican Republic has placed rice in Basket V of the The Dominican Republic-Central

America FTA (CAFTA-DR) and agreed for a tariff-reduction period of 20 years as well as

establishing a 99% out-of-quota tariff rate. The out-of-quota tariff rate will remain unchanged

during the first 10 years of the Agreement, until 2015. From 2016 to 2020 the out-of-quota tariff

rate will be reduced by 8% annually, and from years 2021 to 2025 by 12% annually. The country

also negotiated a special safeguard with an additional tariff rate, which can be applied until the

end of the tariff reduction period.

The Post forecasts Dominican Republic's MY 2015-16 stocks to decline to around 195,000 tons,

down about 4% from last year.

Vietnam Rice Seller Lower Some of Their

Quotes Today; Other Asia Rice Quotes

Unchanged

Apr 15, 2015

Vietnam rice sellers lowered their quotes for 25% broken rice by about $5 per ton to around $335 - $345

per ton today. Thailand rice sellers are out today due to national holiday. India and Pakistan rice quotes

are unchanged today.

5% Broken Rice

Thailand 5% rice was last indicated at around $385 - $395 per ton, about a $25 per ton premium

on Vietnam 5% rice shown at around $360 - $370 per ton. India 5% rice is indicated at around

$370 - $380 per ton, about a $5 per ton discount to Pakistan 5% rice shown at around $375 -

$385 per ton.

25% Broken Rice

Thailand 25% rice was last shown at around $355 - $365 per ton, about a $20 per ton premium

on Vietnam 25% rice shown at around $335- $345 per ton, down about $5 per ton from

yesterday. India 25% rice is indicated at around $345 - $355, about a $15 per ton premium on

Pakistan 25% rice shown at around $330 - $340 per ton.


8

Parboiled Rice

Thailand parboiled rice was last indicated at around $385 - $395 per ton. India parboiled rice is

indicated at around $365 - $375 per ton, about a $15 per ton discount to Pakistan parboiled rice

shown at around $380 - $390 per ton.

100% Broken Rice

Thailand broken rice, A1 Super, was last indicated at around $320 - $330 per ton, about a $10

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

100% broken rice is shown at around $275 - $285 per ton, about a $10 per ton discount

to Pakistan broken sortexed rice shown at around $285 - $295 per ton.

Vietnam Enterprises Buy 99% of Targeted

One Million Tons Rice Under 2015

Stockpiling Plan as on April 13, 2015

Apr 15, 2015


9

Vietnam enterprises have bought about 99.4% or around 994,294 tons of targeted one-million

tons of winter-spring rice under the government-approved stock piling plan from March 1 - April

13, 2015, Bloomberg quoted local sources as saying. The scheme is understood to close

today.The government had approved the stockpiling plan to prevent prices from falling during

the harvest of the winter-spring crop. The government has been assisting businesses with 100%

soft loans for four months to buy rice under the program. This is the sixth consecutive year that

the government of Vietnam has approved the rice stockpiling program during the harvest time of

the country's largest winter-spring crop. The Mekong Delta region is expected to harvest about

6.34 million tons of winter-spring crop.

The stockpiling program coupled with the Philippines contract to supply 300,000 tons of rice are

expected to push up prices considerably.According to data from UN's Food and Agriculture

Organization (FAO), wholesale prices of 25% broken rice in the Dong Thap province of the

Mekong Delta region increased to around 7 million Dong (around $330) per ton in March 2015

from around 6.7 million Dong (around $310) per ton in February 2015. Similarly, wholesale

prices of 20% broken rice increased to around 6.9 million Dong (around $320) per ton in March

2015 from around 6.65 million Dong (around $310) per ton last month.

Generally, the past experience shows that the government approved stockpiling plans were not

that effective in controlling price falls. Lack of proper storage facilities is cited as the main

reason for enterprises not showing interest in buying rice under the program. However, this time,

the program is said to have been conducted more effectively due to improved connections among

Mekong Delta provinces and cities.

Oryza Overnight Recap – Chicago Rough

Rice Futures Slightly Lower, Market

Attempts to Recover from Recent Losses

Apr 15, 2015

Chicago rough rice futures for May delivery are currently noted 0.2 cents per cwt (about $0.44

per ton) lower at $10.190 per cwt (about $225 per ton) ahead of floor trading in Chicago. The

other grains are seen trading mostly higher overnight: soybeans are currently seen about 0.2%

higher, wheat is listed about 0.6% higher and corn is currently noted about 0.6% lower.

U.S. stock index futures indicated a higher open on Wednesday, amid more first quarter financial

earnings and a swathe of economic data. Financial company earnings are expected to grow by


10

12%, in what is seen being a down quarter for the S&P 500, according to Thomson Reuters.

Mortgage applications decreased 2.3% from the prior week as interest rates ticked up slightly,

according to the Mortgage Bankers Association. Meanwhile, the Empire Manufacturing survey

for April Manufacturing activity showed growth in New York State unexpectedly contracted in

April, weakening for a third straight month as the pace of new orders fell to a multi-year low, a

New York Federal Reserve survey showed on Wednesday.

The index showed a decline of 1.19 in April versus March's 6.90 read. There will be a flurry of

Fed speakers, including Vice Chairman Stanley Fischer, who is part of a panel discussing

macroprudential tools at 10:30 a.m. the International Monetary Fund's spring meeting. In

Europe, equities continued to hold higher on Wednesday as the European Central Bank

announced it would not change rates. Gold is currently trading about 0.3% higher, crude oil is

seen trading about 1.8% higher, and the U.S. dollar is currently trading about 0.1% higher at

8:30am Chicago time.

Philippines Intends to Expand Rice Import

Origins

Apr 15, 2015

The Philippines procurement agency is exploring ways to import rice from different countries

such as Pakistan, Myanmar, and India in order to diversify rice import origins, dominated by

Vietnam and Thailand. The nation is one of the biggest importers of rice in the world. Last year

the Philippines imported about 1.2 million tons of rice and it is estimated to import about 1.6

million tons this year, according to USDA data.

With the availability of other possible sources for rice, the country can better manage the costs

and have other alternatives in case of natural disasters and typhoons that regularly ravage its

agriculture. Philippine National Food Authority (NFA) officials are working with the trade

missions of Pakistan, India, and Myanmar to obtain Memorandums of Agreement (MOA) similar

to what the country has with Vietnam, Thailand and Cambodia.The Philippines uses a Minimum

Access Volume (MVA) structure wherein local businesses are permitted to import 755,000 tons

of rice, subject to a 35% tariff, which is different from state-owned NFA tenders. The NFA

Council hasn’t opened the MAV route this year and unconfirmed reports suggest that the

government is considering removing tariffs on rice imports, according to local sources.


11

Ending Levy Rice System will Have Negative

Repercussions on Indian Farmers and

Consumers, Warn Experts

Apr 15, 2015

The government of India's decision to end the levy rice procurement system from the 2015-16

kharif marketing season (October - September) is likely to negatively impact rice farmers and

consumers significantly, experts have warned, according to local sources.The government felt

the need to abolish the levy rice procurement as there was no proper supervision system and the

millers were often not paying Minimum Support Price (MSP) to the farmers and were selling the

better-quality grain in the open market. The decision was mainly meant to ensure fair prices to

farmers.

However, experts say with the absence of levy rice procurement system, farmers have to depend

on government agencies and traders and millers to sell their paddy. Most of the times, traders

and millers avoid paying minimum purchase price (MSP) to farmers, they say. In KMS 2013-14,

most of the traders paid less than Rs.1,200 per quintal against the prescribed MSP of Rs.1,360


12

per quintal and Rs.1,400 per quintal of common and grade A paddy respectively, says a field

officer overseeing procurement in Telangana.

They say consumers will also have to bear consequences of this decision in the form of high

prices. “Denial of MSP to farmers by traders and millers, however, will not provide any respite

to the end-consumers. Millers will have the freedom to sell the rice stocks anywhere and resort to

hoarding to create artificial shortage and increase the price heavily,” sources in the Civil

Supplies Department were quoted as saying.

Under the levy rice procurement system, millers purchase paddy from farmers at MSP and the

state governments in turn procure milled rice from millers to meet their public distribution needs.

Percentage of levy rice procured from millers differs from state to state and used to be in the

range of 30-75% of total procurement in respective states. However, in August 2014, the

government of India capped the levy rice procurement from millers at 25% for the 2014-15

procurement season.

Global Rice Quotes

April 16th, 2015

Long grain white rice - high quality

Thailand 100% B grade 395-405 ↔

Vietnam 5% broken 360-370 ↔

India 5% broken 370-380 ↔

Pakistan 5% broken 375-385 ↔

Myanmar 5% broken 410-420 ↔

Cambodia 5% broken 435-445 ↔

U.S. 4% broken 480-490 ↔

Uruguay 5% broken 575-585 ↔

Argentina 5% broken 565-575 ↔

Long grain white rice - low quality

Thailand 25% broken 355-365 ↔



13

Pakistan 25% broken 330-340 ↔

Cambodia 25% broken 410-420 ↔

India 25% broken 345-355 ↔

U.S. 15% broken 470-480 ↔

Long grain parboiled rice

Thailand parboiled 100% stxd 380-390 ↓

Pakistan parboiled 5% broken stxd 380-390 ↔

India parboiled 5% broken stxd 365-375 ↔

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% 890-900 ↔

Vietnam Jasmine 475-485 ↔

India basmati 2% broken NQ ↔

Pakistan basmati 2% broken NQ ↔

Cambodia Phka Mails 810-820 ↔

Brokens

Thailand A1 Super 320-330 ↔


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 370-380 ↔

Brazil half grain NQ ↔

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

Documents

16th april,2015 daily exclusive oryza rice e newsletter by rice