4.5 million tonnes of vietnamese rice exported in eight months

Vietnam has exported 4.5 million tonnes of rice worth US$1.78 billion in the first eight months of 2009, including 250,000 tonnes in August alone, reported the Vietnam Food Association (VFA).

Currently, farmers in provinces of the Cuu Long river delta are harvesting the summer-autumn crop and around 400,000 tonnes of rice have been collected for reserve.

BGA opposes paddy's indicative price

Basmati Growers Association (BGA) has strongly opposed the indicative price of paddy as determined by the Ministry of Food and Agriculture (Minfa), official sources told Business Recorder on Monday. BGA President Chaudhry Hamid Malhi has written a strongly-worded letter to Minfa Secretary Zia-ur-Rehman, saying that the recommendations of Agriculture Policy Institute (API) and the so-called Agri Task Force had not been taken into consideration and the lot of the farmers, already under pressure, would worsen as a consequence.

He added that there was no check on under-invoicing of rice export and hence the export parity prices did not adequately portray actual prices and were, therefore, of no relevance. "The farmers have conveyed their views time and again but to no avail. Without a clear-cut policy of intervention through the Passco and the inability of Minfa to induct the TCP, the whole calculation is based on a false premise," Malhi added.

The minimum export price (MEP) was abolished on all rice exports from August 2008. India's basmati rice price was above 1,300 dollars, which declined to 1,100 dollars in January 2009 and was further lowered to 800 dollars per ton a week ago. Taking 1,100 dollars as an average bench mark at the rate of Rs 82 per dollar, the export parity comes to Rs 3,600. Taking Basmati paddy to produce 50 percent of export quality rice, the price comes to Rs 1,800, after deducting Rs 300 per 40 kilogram for all processing expenses and profits.

Therefore, the rate of Rs 1,500 for Super Basmati is justified, he said, and added that any reduction in intervention price would not be acceptable to the farmers. "Is this the reward for earning one billion-dollar foreign exchange and also making the country self-sufficient in Basmati rice?" Malhi questioned.

The present recommendations are detrimental to the interests of the rice farmer and will discourage input application leading to low productivity and ultimately lower exports, he concluded. The association, in its letter to the Minfa Secretary, demanded that Passco and the TCP should be involved in procuring rice from the farmers official sources told Business Recorder on Monday.

BGA President Chaudhry Hamid Malhi has written a strongly-worded letter to Minfa Secretary Zia-ur-Rehman, saying that the recommendations of Agriculture Policy Institute (API) and the so-called Agri Task Force had not been taken into consideration and the lot of the farmers, already under pressure, would worsen as a consequence.

Brazil's Best-Selling Rice on Arab Tables

Josapar group, the leading packer and distributor of rice in Latin America, which is based in the Brazilian southern state of Rio Grande do Sul, is increasing sales of rice to the Arab market. The group started selling to Saudi Arabia, the United Arab Emirates and Algeria.

They were already exported rice brand Tio João to Lebanon and Palestine since 2004, and the company is now negotiating with an importer from Jordan.

"Those are countries with very high consumption rates, and in which the quality of Brazilian rice is becoming known. In spite of proximity to Thailand and Vietnam, many sales opportunities arise," says Luciano Targa Ferreira, a sales and export director with Josapar.

"We intend to develop the Arab market further. Consumers are aware of opportunities to buy a differentiated product. We participated in a trade show in Dubai (Gulfood) in February, and the receptiveness was great," he stated.

"Presently, Brazil is the leading rice producing and consuming country in the Western world, and Josapar is proud of contributing to it," he adds. According to him, the variety of the Brazilian grain is a strong differential. Furthermore, the long thin rice, which is the variety that bears the most resemblance to the rice produced in other parts of the world, has more volume, looks better and is less sticky when cooked.

"Brazilian rice does not stick together after it is cooked. The aspect and color are also better, because our seeds are developed by the Brazilian Agricultural Research Corporation (Embrapa)," explains the director.

Brazil was never a large rice exporting country. The country consumes 14 million tons per year and produces approximately 12.5 million tons, so it ends up importing around 1 million tons from neighboring Argentina and Uruguay. "Exporting rice from Brazil requires lots of market development," says Ferreira.

Last year, for example, the world was faced with a strong scarcity of rice that led prices to rocket. "It went from US$ 400 to US$ 1,000 from March to May, and that created space for Brazilian rice," he explains.

"Exporting is good because it regularizes the market and creates alternatives for selling. Constant exporting demands investment in the development of partnerships and differentiated packaging, so as to attract the attention of consumers, as well as very high quality in order to win the loyalty of clients," he asserts.

Founded in 1933 in the city of Pelotas, in the state of Rio Grande do Sul, the Josapar group has its flagship in rice brand Tio João, which has been the market leader in Brazil for 30 years now. The Josapar group produces 35,000 tons of rice per month. Foreign sales account for 3% to 4% or production and go to more than 20 different countries. The largest markets are Angola, the United States, the Caribbean and Europe.

Lower MEP may push basmati rice exports

India's basmati rice exports are expected to surge by 33 per cent during the season starting from October following the government's decision to reduce the minimum export price (MEP).

"Basmati rice exports may increase to 2 million tonnes from 1.5 million tonnes in the last season," Former President of All India Rice Exporters Association Vijay Sethia said. According to official data, India's export of basmati rice was Rs 11,162 crore in 2008-09 fiscal.

Welcoming the reduction in MEP, he said this will ensure reasonable price to farmers and competitive environment in international markets.

The government has lowered MEP to USD 800 per tonne from the present level of USD 1,100 per tonne, Food and Agriculture Minister Sharad Pawar said last week.

However, the Commerce Ministry is yet to notify the cut in MEP

Trade sources said India can import 3-4 tonnes of non-basmati rice and about 6-7 tonnes of wheat by exporting one tonne of basmati rice at the current price level.

The average price of basmati rice contracted by Indian exporters last year was about USD 1,200 per tonne. Whereas the current global price of wheat is about USD 180 per tonne, while rice in Myanmar is available at about USD 325 per tonne, traders said.

Monsoon update

A further slowdown in the monsoon activity during the week ending August 5 has increased the possibility of a major drought, with several state governments already announcing 167 of the total 626 districts as drought-hit. Major crops likely to be affected are rice, peanut, and sugarcane.

India could become rice importer by 2020 at current growth rate

An industry chamber today warned that India could become a net importer of rice by 2020 if it did not raise growth rate to 1.75 per cent and maintained it for next ten years.

Underlining the need to accelerate current growth rate of 1.18 per cent to 1.75 per cent consistently for a decade, Assocham said India's rice production would reach 108 million tonnes by 2020 against requirement of 118 million tonnes, turning the country into a net importer.

Situation is likely to worsen if faster growth in consumption over production continues in the future, warned Assocham president Sajjan Jindal while releasing the Rice Report 2009.

Quoting findings of the report, he said if remedial measures are not taken in a timely and targeted manner, it will challenge the country's self-sufficiency in rice. "Yield growth is likely to slowdown if the new high yielding varieties are not introduced in a time bound manner and efforts to improve the irrigation facilities are delayed." The report projected consumption of rice to grow at a rapid pace in view of the rise in population growth even if there is a slight decline in per capita consumption. A pronounced slowdown in growth will inevitably lead to insecurity and deficiency on food front, it added.

The findings said even if population growth declined to 1.6 per cent in the next decade and per capita consumption remained steady at current 78.5 kg per year, India will still require about 109 million tonnes of rice in 2020.

And if paddy acreage remained stagnant in the next decade and the country sustained the past decade's average rice yield growth of 1.18 per cent in the coming decade as well, rice production would grow to about 108 million tonnes.

Union Food and Agriculture Minister Sharad Pawar said on Wednesday that domestic rice production this year is likely to fall by 10 million tonnes on account drought conditions in 246 districts, covering nearly half of the country. Deficient monsoon may result in shortfall in area coverage of paddy by about 5.7 million hectares as compared with last year and production of rice may be reduced by 10 million tonnes, he added.

Vietnam's Rice Exports May Surge to Record

Rice exports from Vietnam, the second-largest shipper, may rise to a record 6 million metric tons in 2009 aided by lower prices, narrowing the gap with bigger rival Thailand, according to U.S. forecasts.

The price of Vietnam's 5 percent broken-grain variety fell to about $398 per ton this month, $163 a ton cheaper than Thailand's competing grade, the U.S. Agriculture Department said. That compares with Vietnam's price in April of $460 a ton, which was $112 less than Thailand's, it said.

Global rice prices surged to a record last year amid rising demand and temporary trade curbs by some growers including Vietnam, which wanted to safeguard local supplies. Do Huu Hao, a deputy minister of trade and industry, forecast this month that Vietnam may ship 7 million tons after a "good harvest."

"Vietnam's price quotes are well below Thailand's price quotes, making Vietnam a very competitive supplier," Nathan Childs and Katherine Baldwin of the U.S. Agriculture Department wrote in an Aug. 13 report.

The lower prices may push Vietnam's exports this year 29 percent higher than the level in 2008 and surpass 2005's record 5.2 million tons. Thailand will probably ship 8.5 million tons this year, down 15 percent from 2008 and the lowest level in three years, the U.S. forecast.

Food Crisis

Rice futures in Chicago peaked at $25.07 a hundred pounds in April 2008, fuelling concerns that there may be a worldwide food crisis marked by civil unrest and shortages for the poorest. The most-active contract on the Chicago Board of Trade, for November delivery, closed yesterday at $13.44.

Vietnam's shipments "may put some dampener on the price in the region," Ben Barber, a futures adviser at Bell Commodities Ltd., said from Melbourne today. Still, "in the grand scheme of things, a couple of million tons extra is not that big."

Increased exports from Vietnam may not be enough to offset lower supplies from India after rice acreage in the second- largest producer fell because of drought, Barber said. The U.S. Department of Agriculture this month cut its forecast for India's exports to 1.5 million tons from July's prediction of 4 million tons.

Vietnam's rice exports are benefiting from an "excellent harvest," competitive prices and "ample" stockpiles, the United Nations' Food and Agriculture Organization said last month. The Vietnamese government is encouraging more rice exports amid weakened demand for the country's goods because of the global economic downturn, the agency said in a report.

Increased Exports

Rice shipments from Vietnam jumped 46 percent by volume in the seven months through July to 4.28 million tons, according to the General Statistics Office in Hanoi.

Vietnam exported 4.65 million tons in all of 2008, according to the U.S. Foreign Agricultural Service, which cited the Southeast Asian country's "aggressive export pace" in raising its forecast this month for 2009 shipments.

Vietnam's government was aiming to ramp up the volume of rice shipments this year to make up for a decline in prices, according to Deputy Minister of Trade and Industry Hao on Aug. 6. Exports so far totaled about 5 million tons, Hao said then.

Overseas demand for Thai white rice "remains quiet, as Vietnamese prices are $150 per metric ton cheaper," Ponnarong Prasertsri, an agricultural specialist at the U.S. Embassy in Bangkok, wrote in a report dated Aug. 5.

Vietnam to barter rice for corn

Vietnam would buy between 500,000 and 800,000 tons of corn from the Philippines in exchange for Vietnamese rice from the world's largest importer of the grain, a Vietnamese industry official said Thursday.

"The Philippines has been buying millions of tons of rice from Vietnam so in exchange we would buy corn under a trade deal between ASEAN members," said Nguyen Tho Tri, deputy chairman of the Vietnam Food Association.

Tri said the industry body had also cut the floor on rice export prices by 7-12.5 percent to boost exports.

Philippines plan no further rice imort this year

THE COUNTRY will not import rice beyond what has already been committed this year, the Agriculture chief said yesterday, denying claims of Vietnam and local traders of an agreement in principle for additional shipments.

"We are done, no more imports of rice this year," Agriculture Secretary Arthur C. Yap said in a phone interview yesterday.

The Philippines, the world's biggest importer of rice, has so far imported 1.775 million metric tons of rice — 1.575 million MT by the government and 200,000 MT by the private sector — this year.

The government's Inter-Agency Committee on Rice and Corn had given the National Food Authority (NFA) standby authority to import as much as 2.4 million MT this year, down from the 2.7 million MT option last year. However, Mr. Yap said "we will not reach it."

India Rice Purchase Price Hike To Swell Govt Stocks

India's government increased minimum support prices for rice by INR100 per 100 kilograms, hoping to buy more from farmers to build stocks and cushion the impact of drought across large parts of the country.

 

The move is aimed at supporting farmers and encourage them to sell their produce to official agencies, but would lead to higher prices for consumers who are shelling out over 40 per cent more for pulses than they did in June.

The MSP for common variety of paddy has been hiked to Rs 950 from Rs 850 per quintal and for the A-grade to Rs 980 from Rs 880 per quintal for 2009-10 season.

The decision to increase the support prices for paddy, toor, moong and sesame was taken by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan Singh.

Fragrance in rice originated in Japan, not India

Basmati literally means 'mother of all aroma' and Basmati rice has been synonymous with India. But now the results of a study by a team of scientists from Cornell University in the US and International Rice Research Institute (IRRI) in the Philippines may dent this national pride.

The scientists say their research has reconfirmed the finding by previous workers that genetically, Basmati rice does not fall under Indica subgroup of rice varieties grown in southern Asia. It belongs to the Japonica subgroup, grown mostly in Japan.

More important, they claim to have shown for the first time that fragrance in rice originated within the Japonica group and the trait was then transferred to Indica rice by a natural process called 'introgression'.

Their results which challenge the traditional assumption that the fragrance trait arose in the Indica group have been published in the latest issue of the Proceedings of the National Academy of Sciences of the US.

Cultivated rice plant (Oryza sativa) consists of two subspecies, Japonica and Indica. Japonica rice is round and sticky when cooked, while Indica rice has long grains that get fluffy on cooking.

Earlier genetic investigations had led scientists to establish that a gene called BADH2 is responsible for fragrance in rice. 'The predominant allele or variant of this gene called badh2.1 is found in virtually all fragrant rice varieties today, including Basmati and Jasmine types, but the origin and evolution of this allele had remained unclear so far,' the researchers said in their report.

Given that an identical badh2.1 allele was detected in both the Japonica and Indica groups, the Cornell-IRRI team set out to determine in which group it had originated.

To do this they examined 242 different rice types from 38 countries across Asia and used what is called 'a haplotype approach', Susan McCouch, Cornell University researcher and one of the authors, said in an e-mail interview.

She said the haplotype analysis allowed the team to demonstrate that the badh2.1 allele -- responsible for fragrance -- arose within the Japonica group in a 'Basmati-like ancestor' and was transferred to fragrant Indica varieties, including the Jasmine varieties from Thailand.

The authors said the transfer of the fragrance gene would have occurred 'between the rice subpopulations through the process of introgressive hybridisation, facilitated by population expansion and human migration throughout Asia'.

Over 100 volatile compounds have been detected in fragrant rice varieties, but the major compound responsible for the characteristic aroma is 2-acetyl-1-pyrroline (2AP). Basmati grains contain 0.09 parts per million of 2AP which is about 12 times more concentration than un-scented rice varieties.

E.A. Siddiq, a renowned rice scientist and former deputy chief of the Indian Council of Agricultural Research, says the reported finding is purely of academic interest and has no commercial value.

'It makes no difference where Basmati derived its aroma from,' Siddiq told IANS. 'The most important trait of Basmati is elongation -- on cooking the grain length increases by as much as two-and-half times.'

Govt cuts minimum export price for basmati by $300/tn

The government has decided to cut the minimum export price (MEP) for basmati, Finance Secretary Ashok Chawla said today.

He said the decision to reduce the export floor price of the premium long grain rice was taken at the meeting of empowered Group of Ministers on food security late on Monday.

A senior government official had on Monday said that the ministers' panel had decided to accede to the industry's demand and cut the minimum export price of basmati to $800 a tonne from $1,100 tonne.

He had said lowering the basmati MEP would enable export of only premium rice varieties, and not impact prices or availability of common and more widely consumed varieties of rice.

India to release food from reserves

India said Wednesday it would step up its food distribution programme for the poor as a widening drought threatened to cut rice production by 10 percent and sharply reduce sugar supplies.

Agriculture and Food Minister Sharad Pawar also said the government would consider releasing wheat and rice from its reserves into the open market if their prices, which have already shot higher, increase further.

The monsoon rains, which sweep the country from June to September, are running at 29 percent below normal.

In Thailand Price Insurance to Replace Mortgage Scheme

This year the program reportedly benefited only 20 percent of all rice farmers despite higher participation (up to 30 percent participation in the current MY2008/09 program which set intervention prices at record levels set in the previous year) (Table 1). Around 60 percent of farmers participating in the program are in irrigated areas in the lower north and the central plain which account for a third of total rice cultivation. A study by the Thailand Development and Research Institute (TDRI) indicates that farmers derived 40 percent of the total program benefits but that poor farmers received little benefit from the programs (Table 2). The program benefited rice exporters, accounting for around 24 percent of the total benefit generated from the mortgage scheme. In addition, the resulting price distortion reportedly brought forward greater production of low-quality rice over the past five years as farmers used fast-growing rice varieties to maximize crop sales to the mortgage program.
The price insurance scheme will replace the mortgage scheme in MY2009/10 intervention program of major crops, including rice, corn, and tapioca. Insured prices will be based on production costs (including transportation cost from farm to the mills of buyers) with profit margin of 20-25 percent. Eligible tonnage will be based on average cultivation and yield of each crop and will be limited. This scheme is designed to benefit all farmers, particularly small-scale farmers. The program will pay the difference between insured prices and market prices at the end of contracts which are based on harvest pattern. The Bank for Agriculture and Agricultural Cooperatives (BAAC) will be responsible for the program administration. The Government will absorb the insurance premium until the program is fully implemented in the future. The scheme will enable farmers to manage the risk of price fluctuation, particularly during the beginning of the harvest.
Price Insurance Scheme for Rice will be finalized in early August
At the Cabinet meeting on July 21, 2009, the Government agreed with the framework of MY2009/10 rice policy to replace conventional mortgage scheme with price insurance scheme. The insured prices will be based on average production costs with profit margin. On July 29, the National Rice Policy Committee agreed to set insured prices of main-crop white rice paddy at 10,000 baht/ton ($296/MT), based on average production cost with profit margin of 30-40 percent. Meanwhile, the eligible tonnage will likely be limited at 20 tons/farmer, based on an average farm size of 40 rai (6.4 hectares) with average yield of 400 kg./rai (2.5 tons/hectare). The Ministry of Agriculture and Cooperatives (MOAC) is reviewing insured prices of fragrant rice paddy and glutinous rice paddy which are expected to be lower than 13,000 baht/ton ($413/MT)

Weekly Rice Price Update

Domestic and export prices for white rice increased slightly as the government's plan to release white rice paddy for parboiled rice production were canceled. Meanwhile, export prices for fragrant rice increased significantly due to better-than-expected bidding results.

Monsoon Deficit Narrows in India's Grain Bowl Region

Monsoon deficit in drought-struck northwest Indian states narrowed after rains returned to the country's biggest grain and sugar cane growing region after a two-week lull, a weather bureau official said.
Showers in the region were 40 percent below average on Aug. 16, down from 43 percent on Aug. 12, said S. Kaur, director at India Meteorological Department in New Delhi. The shortfall in the region, which includes Uttar Pradesh, Punjab, Haryana and Rajasthan, was as high as 50 percent on July 8.
The monsoon season, which brings about three-quarters of the nation's annual rain, may be the driest in seven years, the weather bureau said last week, paring farm output in the world's No.2 producer of rice, wheat and sugar. The revival may improve prospects for crops already planted.
"We need to see sustained and well distributed rains over the next three weeks to ensure that crops, which have survived the lack of rains, fare well," said Ashwini Bansod, a senior analyst at MF Global Commodities India Pvt. in Mumbai. "Most crops are at the grain formation and reproductive stage."
Shares of companies whose fortunes track rural incomes and the domestic economy paced a recovery in the benchmark Sensitive Index, ending a two-day 4.7 percent loss, on optimism a revival in the monsoons may limit the likely drop in incomes of the 742 million people living in villages. Hindustan Lever Ltd., the top consumer company, advanced the most in more than a month, and lenders including ICICI Bank Ltd., the second-biggest, gained.
Rice, the nation's biggest monsoon-sown crop, has been the worst hit: the crop area has fallen 19 percent from a year ago to 24.7 million hectares on Aug. 12, the farm ministry said.
In Bihar, which grows five percent of the country's food grains, farmers planted 40 percent of total area with rice and corn, Chief Minister Nitish Kumar said in New Delhi today. The eastern state typically plants rice on 3.5 million hectares and corn to 350,000 hectares, he said.
Karnataka Farmers
Farmers in Karnataka couldn't plant about 26 percent of the planned 7.2 million hectare area as rains in the southern state since July 1 have been the lowest in 40 years, Chief Minister B.S. Yediyurappa told reporters in New Delhi today.
Rains were 28 percent below the long-period average for the country as a whole on Aug. 16, compared with 29 percent on Aug. 12, weather bureau's Kaur said today. The nation received 434.6 millimeters of rain, compared with an average 602.1 millimeters between 1941 and 1990. Falls in June were the lowest in 83 years.
"The strain created by the overall deficiency in the early part of the monsoon is bound to remain and affect yield," MF Global's Banson said.
Monsoon has been active in the northeast, helping ease the region's rain deficit to 32 percent from 36 percent on Aug. 12. A shortfall in the central states, including Madhya Pradesh, the biggest soybean producer, widened to 21 percent from 19 percent on Aug. 12, the weather office said.

Export norms for Basmati rice relaxed

The government has decided to relax norms for export of Basmati rice, which is a premium variety of the grain and is not widely consumed in the domestic market.
The minimum export price (MEP) of Basmati rice has been lowered, Finance Secretary Ashok Chawla told reporters here today.
The decision was taken by the Empowered Group of Ministers (EGoM) on food management, headed by Finance Minister Pranab Mukherjee, which met yesterday. The EGoM is also believed to have taken some decisions on offloading wheat and rice in the open market.
While Chawla did not indicate the new MEP for Basmati rice, trade sources said that MEP has been reduced to USD 800 a tonne against the present level of USD 1,100 per tonne. The Commerce Ministry had proposed the threshold of USD 750 a tonne.
Sources said that the ministry was in favour of reducing the MEP in the backdrop of a sharp contraction in country's overall exports. It argued if India continues with higher MEP, it would give edge to rival Pakistan in the global market.
Pakistan, which is the other producing country, is contracting to export Basmati rice at USD 700-800 a tonne, exporters said.
The export of non-basmati rice is banned in India along with wheat in the wake of high food prices. India exported about 1.8 million tonnes of Basmati rice in 2007-08 season.

India's lower rice production to hit world output

The US has downsized world's rice production by 15 million tonnes following an estimated decline in output of an equal quantity of the grain in India possibly due to drought.

In July the US Department of Agriculture (USDA) had projected India's rice output to be at 99.5 million tonnes for 2009-10 season. It has now downsized it to 84 million tonnes.

The world's rice production has been estimated to be at 433.46 million tonnes, which the USDA had earlier pegged at 448.98 million tonnes in July.

Experts said there is no possibility of any increase output in any other rice producing country such as Indonesia and Thailand after fall in India. They said as many as 177 out of 626 districts in India are in the grip of drought. The rainfall deficit is about 29 per cent so far. These factors would definitely have an adverse impact on rice crop.

The USDA has kept its forecast unchanged for leading rice exporters Indonesia, Vietnam and Thailand, which are expected to harvest 81.40 million tonnes in 2009-10.

While Indonesia is expected to produce less rice than last year, Vietnam and Thailand might see a marginal increase in their output.

China, the world's largest rice producer, is expected to contribute 135.10 million tonnes to the world's total rice production. It had produced 134.33 million tonnes last year. - PTI

Thai Weekly Rice Price Update

Domestic and export prices of white rice and parboiled rice declined 3-6 percent as the current MY2008/09 intervention program ended. Market prices will likely continue to trend downward in anticipation of the government stock release.

Poor Monsoon Impact on Agricultural Production

According to most recent reports, progressive rice planting is currently lagging behind last year's level by over six million hectares, which would translate into a production loss of at least 12 million tons. Lower rice yields due to late and erratic monsoon rains in several states would also result in additional production losses. As the window of opportunity for planting of rice will be over soon, farmers will start shifting to less irrigation intensive short duration pulses and coarse grains. Although the government would make all out efforts to reduce losses by providing various incentives and input subsidies to farmers, devising contingency plans to increase kharif rice production and rice production during the rabi (winter) season, an overall loss of at least 11 million tons in MY 2009/10 rice production appears likely. In a worst case scenario, the losses could be as high as 15 million tons from last year's record production of 99.15 million tons (revised). However, a clearer picture will emerge only by end-August, when the government receives detailed reports from various drought affected states.
Despite a likely significant decline in rice production this year, the overall supply situation for staple grains would remain stable following record procurement of wheat (25.1 million tons) and rice (31.6 million tons) by the government from the record 2008/09 crop, resulting in a larger than normal build up of government-held stocks. Government-held grain stocks on July 1, 2009, were 52.5 million tons (19.6 million tons of rice and 32.9 million tons of wheat) which is more than adequate to meet the shortfall in production this year. Thus there won't be a need to import wheat or rice this year.
As a precautionary measure, the government has decided not to permit exports of non-basmati rice and wheat indefinitely, even on a government-to-government basis for humanitarian purposes.

Brazilian rice report

Rice exports in the first half of 2009 continued to be strong. A traditional importer of rice, Brazil has become an exporter of rice in the past few years. Producers express optimism in assuming the role of one of the top second-tier exporters. While Brazil can't compete with top exporting countries such as Thailand or Vietnam, producers use exports as a hedge in price risk management. Brazil became the 8th largest exporter in 2008 with 511,000 tons and for the first half of the year sales have reached a record volume 280,000 tons, an increase of 80% compared to 2008.
Brazil exports principally in African countries such as Nigeria, South Africa and Senegal. The African countries account for 65% of imports. In spite of the strong increase in shipments the first half of the year, shipments are not expected to reach 2008 levels. In 2008, the majority of shipment occurred in the second half of the year which is not expected to be repeated in 2009 as the local currency has strengthened considerably in the past few months.

Punjab reports normal paddy sowing

The deficient rainfall in irrigation-rich Punjab has not affected the area under paddy cultivation. Though some of the state's districts have reported more than 50 per cent rainfall deficit, officials say sowing has been done in 27.15 lakh hectares (as on August 10) against the target of 26 lakh hectares. However, they admit that the deficit in rainfall will increase the input cost of farmers.

Says B S Sidhu, the state government's Director, Agriculture: "In seven districts of the state – Ferozepur, Amritsar, Fatehgarh Sahib, Muktsar, Tarn Taran, Mansa and Patiala — the deficit is more than 50 per cent. Although the area under paddy cultivation has gone up against the designated area, the deficient rainfall will increase the input cost."

Only about 25 per cent area under paddy cultivation in the state is fed by the canal irrigation system; the rest is dependent on tubewells. The state has more than 1.2 million tubewell connections. As electricity cuts are rampant in the state, farmers have to rely on diesel to run their tubewells. This will result in higher input costs.

According to officials, the area under basmati cultivation is likely to increase by 50,000 hectares this season, as compared to the corresponding period last year. This year, the total area under basmati cultivation is likely to touch 3.5 lakh hectares, as compared to 3 lakh hectares last year.

Korean rice gains ground overseas

On the morning of Aug. 6, a refrigerated truck pulled up to the Seo Andong Nonghyup Rice Processing Complex in the town of Pungsan, Andong, North Gyeongsang. The front yard of the facility was crammed with about 500 20-kilogram (44-pound) bags of Yangban Rice, which had been processed and packed there. Yangban Rice is the brand of rice developed by Seo Andong Nonghyup.

The bags of rice, each of which had a label written in both English and Arabic, were ready for shipping and bound for Qatar. The 20-foot truck, which had arrived to pick the bags up and transport them to Busan Port, was decorated with a sign that read: ¡°Celebrating the first shipment of Andong Yangban Rice to Qatar.¡±

¡°We¡¯ve exported 260 tons of rice worth 550 million won [$437,195] to foreign markets since we started exporting Yangban Rice late last year,¡± Kim Mun-ho, director of Seo Andong Nonghyup, said. ¡°Our overseas markets range from North America, including the United States and Canada, to Russia, Australia, New Zealand and Qatar.¡±

In describing the export process, Kim said, ¡°The process has effectively been divided among three parties: We produce the high-quality rice, the Andong city government provides an export subsidy and NH Trading [a subsidiary of Nonghyup] is in charge of finding markets overseas.¡±

As seen with the case of Yangban Rice, Korea is now positioning itself as a rice exporter.

Korean rice exporters initially targeted Korean residents in foreign countries, but there is now a large demand for Korean rice among non-Koreans in foreign countries, particularly among sushi restaurants looking for high-quality rice. Korea exported 1,434 tons of rice in the first half of the year, a 12-fold increase from the same period a year ago, when 106 tons were exported. That translates into sales of $2.44 million this year, from $300,000 last year.

While the country¡¯s total rice exports for this year are estimated to be between 2,500 and 3,000 tons, industry officials say that the figure is encouraging considering that Korean rice is a latecomer in foreign markets.

Korea began exporting rice just two years ago.

In the period following the country¡¯s liberation from Japanese colonial rule in 1945 through the early 1970s, the exportation of rice was unthinkable due to continued fears of food shortages. The Korean War (1950-53) and the years that followed were particularly difficult. Most Koreans remember this period as the ¡°barley hump,¡± a time in the 1960s when food was scarce and people had very little to eat.

The severe food shortages of the post-war years began to dissipate with the rapid increase in rice production spurred by the introduction of Tongil rice in 1971. The new rice variety, which was developed to improve the country¡¯s self-sufficiency in food, boosted rice production by 50 percent.

Still, the Korean government continued to ban rice exports, citing concerns about food production.

It wasn¡¯t until 1996, when the Grain Management Law was revised, that a legal provision for the exportation of rice was established. However, there were lingering concerns within the government that exporting rice would have an adverse effect on negotiations with other countries once the domestic rice market opened. The concern within the international community was that Korea would not import enough rice to accommodate local farmers.

It wasn¡¯t until May 2007 that negotiations on the opening of the domestic rice market were concluded and restrictions on rice exports were lifted.

For the next seven months, Korea¡¯s rice exports amounted to 566 tons, or $1.37 million.

Australia was the largest buyer of Korean rice, importing 747 tons of rice in the first half of the year, and it accounted for more than half (52 percent) of Korea¡¯s total rice exports. Australia was followed by the United States (221 tons), New Zealand (139 tons), Canada (49 tons), Singapore (47 tons), Germany (44 tons) and Qatar (40 tons).



¡°Australia was a big exporter of rice in the past, but it has become an importer in recent years,¡± said Hwang Yang-hun, 45, head of Jini Trading in Sydney, Australia. Hwang has been involved in the import business for 13 years. ¡°The main reason [for the change] was that low-priced American rice and continued droughts and crop failures in Australia decreased domestic rice production there.¡±

But with the price of American rice having risen to 53 Australian dollars per 50-pound bag, sales of Korean rice, which sells for 49 Australian dollars per 20-kilogram bag, have expanded, Hwang said.

What makes Korean rice so competitive is its high quality and low price, he added.

¡°We began supplying [Korean] rice to Sushi World, which operates about 40 sushi restaurant chains in Sydney, and the reaction has been good,¡± Hwang said. ¡°We plan to make inroads to large local supermarket chains like Woolworths and Coles with smaller bags of rice [1-2 kilograms] when we get this year¡¯s crop.¡±

The number of restaurants importing Korean rice is also increasing in the United States, Chang Chul-dong, 51, head of New York-based Hansung Food Co., said.

¡°Although Korean restaurants in the United States were more likely to use American rice in the past, those using rice from Korea are increasing in number, so now we are focusing on trading in Korean rice to meet the demand,¡± Chang said.



However, it will still be difficult for Korean rice to gain a foothold in the U.S. retail market because of its relatively high price, he said.

¡°American rice sells for about $1.32 per kilogram at large retail outlets, while Korean rice sells for around $2.25 in supermarkets run by Koreans. Because of the price difference, people who buy Korean rice are still mostly Koreans who want a taste of home,¡± Chang said.

In Europe, however, Korean rice appeals to locals as much as it does to Korean residents, industry sources say.

¡°We have exported 44 tons of rice to Germany so far this year, most of which we have sold to Japanese markets there,¡± Kim Yong-jae, a NH Trading official, said.



¡°Korean rice is very much in demand among Japanese sushi restaurants in Europe because it is cheaper than Japanese rice but similar in quality to Japanese rice,¡± he added.

Monsoon Revival Boosts India's Sugar Cane, Rice Crops

A revival in India's monsoon rains is helping ease dry weather that's caused drought in a third of the nation's districts and dented sowing of rice and sugar cane, a weather bureau official said.
Prime Minister Manmohan Singh today said that there was "no need to panic" as the nation has "adequate stock of wheat and rice" to face the drought.
Uttar Pradesh, the country's biggest cane grower, Madhya Pradesh, the largest soybeans producer, and Bihar, a top grower of rice and corn, received "good rain" over the past few days, said Ajit Tyagi, director general of the India Meteorological Department, from New Delhi today.
The monsoon season, which brings about three-quarters of the nation's annual rainfall, may be the driest in seven years, Tyagi said last week, curbing farm output in the world's second- biggest producer of rice, wheat and sugar. As many as 209 of 626 districts have declared drought, the farm ministry said.
"A lot of paddy crop has been saved in Punjab, Haryana and Andhra Pradesh because of irrigation," Cabinet Secretary K.M. Chandrashekhar told reporters in New Delhi earlier today before a meeting of chief ministers with Singh to discuss the drought. Recent rains may have helped the crops, he said.
Rice, the nation's biggest monsoon-sown crops, has been the worst hit: the crop area has fallen 19 percent from a year ago to 24.7 million hectares as of Aug. 12, the farm ministry said. Cane has been planted to 4.25 million hectares, compared with 4.38 million hectares a year earlier.

MEP reduced for Indian Basmati?

Indian traders have announced MEP reduced to 800 $/t. To be confirmed from official sources.

Cancelled bidding hits Thai parboiled rice export

The government's recent cancellation of planned paddy-rice bidding has damaged export opportunities for parboiled rice, which is produced from unhusked rice.
Thai rice exporters expressed their disappointment at the cancellation.
A source at the Commerce Ministry said yesterday that the decision had been taken after it encountered a technical problem.
"Although there is export demand for paddy rice, the government cannot release it as our stocks have already passed quality-improvement processes such as drying, which means they can no longer be turned into parboiled rice," said the source.

Commerce Minister Porntiva Nakasai had previously announced plans to release about 600,000 tonnes of paddy rice via auction, as demand for this kind of rice was high following India's export ban.
India is one of the Kingdom's major export rivals for parboiled rice.
The source explained that producing parboiled rice requires paddy rice that has not been through any quality adjustment. In addition, it needs to be hard rather than soft paddy rice.
Chookiat Ophaswongse, president of the Thai Rice Exporters Association, yesterday said the government should release its paddy rice, for which demand is increasing.
He also said the government had to maintain its rice stockpile for longer, due to the current market demand for parboiled rice.
Moreover, the wide price gap between Thailand and Vietnam will result in export problems for the Kingdom, he added.
Thai rice is being quoted at US$548 (Bt18,700) a tonne, much higher than Vietnam's $400, he said.
Sombat Chalermwutinan, president of Asia Golden Rice - Thailand's second-largest rice exporter - said overseas demand for parboiled rice had reached between 200,000 and 300,000 tonnes a month.
"Thailand now exports about 600,000 tonnes of rice a month, half of which is parboiled," he said.
He said that due to the second-crop harvest season having started, and with the expectation of about 2 million tonnes of rice entering the market, Thai exporters should not face any difficulty purchasing paddy rice from the market - despite the government's cancellation of the release of paddy from its stockpiles. 

Vietnamese Exporters told to desist from slashing rice prices

The Vietnam Food Association asked local businesses to stop lowering rice prices in international markets saying it is hurting the country's exports.
Low prices offered by the association's members were causing difficulties for others in dealing with importers and leading to serious effects on inter-governmental relations, said the association's Deputy Chairman Nguyen Tho Tri.
Tri told the press on Monday the association has set a pricing framework that its members were to follow but many have broken it as they jostled to push out others and win import contracts.
The ceiling prices that exporters should not sell under were US$400-430 per ton but many local businesses including association members were offering lower prices, Tri said.
He said this practice would not benefit the country's exports, given that world demand for food was not falling.

Vietnam government to buy 400,000 tons of rice

The government will purchase 400,000 tons of the summer-autumn rice crops in a bid to keep prices in check while ensuring farmers make a profit on the rice sold.

The rice will be added to the national rice fund which was set up expressly to stabilize prices on the domestic market, said the Vietnam Food Association (VFA)'s vice chairman Nguyen Tri Tho last week.

He said the move came after the summer-autumn crop was late to harvest last month, perhaps pushing farmers to sell quickly and lowering the price of sold rice.

Clipped output nixes basmati export price cut

Chances of an empowered group of ministers (EGoM) cutting basmati export floor price (MEP) to $750-800/tonne from the current $1100/tonne seem slim now against projections of a 10% drop in rice production this kharif and a 60-lakh hectare drop in paddy acreage.

India's Rain to Be Weakest Since 2002 Drought

India's monsoon season, which brings 73 percent of the nation's annual rainfall, may be the driest in seven years, a weather bureau official said, paring farm output in the world's biggest producer of sugar, rice and wheat.
"It's going to be more like 2002 situation," said Ajit Tyagi, director general at the India Meteorological Department, referring to the year when the nation faced its worst drought in 15 years. Rains were 19.2 below average that year.
Lower farm output may erode incomes of 742 million people living in the villages, hurting Prime Minster Manmohan Singh's efforts to push growth back to a 9 percent pace. The drought in 2002 cut economic growth to 3.8 percent, the lowest in 11 years.
"Recent experience suggests that as rain deficiency moves beyond the threshold range of 10-to-15 percent, the incremental damage to agriculture is much more than proportionate," said Siddhartha Sanyal and Dipti Saletore, economists at Edelweiss Securities Ltd. in a note yesterday. "We seem to be approaching that tipping point."
Inadequate rain may shave as much as one percentage point off the nation's economic growth this year, said Raghuram Rajan, an adviser to Prime Minister Manmohan Singh. A 20 percent rain shortfall may chop 2 percentage points off the economic growth, Philip Wyatt, a senior economist at UBS AG in Hong Kong, said.
The deficit since the start of this season on June 1 has widened to 29 percent as of Aug. 12, from 25 percent a week ago, Tyagi said from Pune today. Falls were 43 percent below average in the northwest region, which include the top grain producing states of Uttar Pradesh, Punjab and Haryana, while the shortfall was 23 percent in peninsular India, which includes Maharashtra, the top grower of sugar cane and cotton, the bureau said today.

Indian acreage of paddy is lower than last year

India's rice production, hit by erratic monsoon, is facing another crisis with official data revealing that acreage of paddy is lower than last year.

'Acreage of paddy and oilseeds is lower,' an agriculture ministry statement here said.

According to the data, as on Aug 6, the area under paddy cultivation was 228.19 lakh hectares, down from 285.94 lakh hectares in 2008.

In gloom, Punjab paints a pretty paddy picture

Paddy plantation is coming to an end across the state and till date 27.15 lakh hectares of land has been sown under paddy. Last year the total area under paddy cultivation was 27.35 lakh hectares. "Despite deficient rains, we are not likely to register a fall of more than 10,000 hectares in the area under paddy as compared to last year," said Director, Agriculture, Punjab, BS Sidhu.

"Even though the rainfall during the kharif season was 70 per cent less than normal during May and June, and about 50 per cent in July, the targeted area under paddy, maize and cotton had been sown by the farmers, who had irrigated their fields by using diesel engines and generators," he added.

The area under basmati cultivation has gone up from 3.25 lakh hectares last year to almost five lakh hectares this year. "This is mainly due to the delayed monsoon and also because basmati fetched an attractive price last year," said Sidhu.

Iran emerges as favourite for Indian basmati exporters

Over the last couple of seasons, Iran, along with neighbour Iraq, has emerged prime favourite with Indian basmati exporters for several reasons. One, Iranians buy large quantities of parboiled Pusa 1121. With its own farming in doldrums, Iran is increasingly dependent on the world market to supply it long grain aromatic rice. With India at its doorstep willing to export 3 mn tonnes basmati, Iran has shifted its custom to us.

In the new season starting October 1, almost half of the 2.5 million tonnes labeled basmati leaving India will reach Iran finally.

 

Second, Iran pays top-notch prices beyond India's wildest dreams. Whoever imagined that the variety Pusa 1121, which entered the basmati family with the skin of its teeth, will be the most expensive one, fetching $1500/t or Rs 70/kg in Isfahan.

But it does. Chiefly because Iranians are used to paying over-the-top prices for their local aromatic Domsiah rice in chronic short supply, and since rice is not a staple, it doesn't bother any one too much to pay exorbitantly for Pusa 1121 that comes closest to Domsiah. This has led to a scramble among Indian companies and farmers to produce and export more and more quantities of only this variety. Haryana is rapidly hurtling towards virtually a monoculture of Pusa 1121.

Moreover, Iranian buyers don't like to hold large stocks and begin importing only when a short supply is clearly visible. This just-in-time inventory management means they gain on low carrying costs but lose on bargaining power with India. Nothing could be better news for exporters who are pocketing record margins for parboiled 1121.
Third, Iranians make quick payments.

 

When you need rice shipped urgently, you can't afford to play fast and lose with suppliers because they tend to have long memories. This is manna from heaven for cash-strapped Indian exporters. The entire payment cycle, from the time they get an order to buy paddy and parboil it to shipping and cash in hand, takes less than four weeks. In the basmati business, this is unprecedented.

Lastly, the Iranians have effectively and swiftly undercut the Saudis, who controlled international basmati market for over a decade, much to the delight of Indian exporters. Though Saudi Arabia still buys up to 750,000 tonnes basmati from India, it is a tough bargainer.

 

As there are only a handful of Saudi importers and always hold a year's supply in stocks, they would quote rock bottom prices. As all Indian and Pakistani exporters wanted to desperately sell to them, Saudis would do deals on their own terms. Not any more. With the Iranians buying larger quantities at higher prices, exporters need not queue out side Saudi offices and hotel rooms any more.

 

Thai rice export outlook improves

Thailand's rice exports are expected to exceed the target of 8.5 million tonnes this year, as some rival countries are likely to bar exports until next year because of weak monsoon rains.

"We are closely monitoring the world rice market environment and foresee a higher chance to export rice beyond the target, as certain producers are now facing a poor monsoon," said Chutima Bunyapraphasara, director-general of the Foreign Trade Department at the Commerce Ministry.

India, in particular, is facing increasing pressure from poor rainfall, as monsoon rains, the main source of irrigation for its 235 million farmers, have been 25% below average so far this season.

As a result, monsoon paddy planting acreage has been reduced by 28% this year because of water supply in the main growing regions.

Lower crop output is expected to prompt India to delay exports of non-basmati rice.

India banned non-basmati rice exports last year to stave off shortages at home, but a bumper harvest later encouraged it to resume sales to some countries.

In January, it scrapped the export tax on basmati rice and reduced the floor price for shipments.

Higher supplies allowed Delhi to export 1 million tonnes of non-basmati rice by state firms, but only for government-to-government deals.

India shipped about 2.9 million tonnes last year. The shipments represented a significant decline from its usual annual exports of 5-6 million tonnes, roughly divided among basmati, parboiled and white rice.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said India's plans were critical for Thailand's rice outlook.

"It is highly likely that India would not be able to resume its exports of non-basmati rice within this year due to insufficient rain," he said.

"We are thus feeling upbeat about achieving shipments of 8.5 million to 8.7 million tonnes of rice by year-end."

According to Mr Chookiat, rice shipments by Vietnam, the world's second largest rice exporter behind Thailand, are also unlikely to be active for the remaining months.

Hanoi has signed futures contracts to sell 5.2 million tonnes of rice and is about to achieve its target of 6 million.

The Thai government is estimated to have milled rice stockpiles of about 7 million tonnes, the highest ever.

The government said last month it planned to sell 500,000 tonnes of milled rice and 600,000 tonnes of paddy rice from its stocks this month, but no details have been set yet.

In a related development, the government yesterday called a bid for 300,000 tonnes of grade-B 100% Hom Mali rice from state stocks via the Agricultural Futures Exchange of Thailand (Afet).

The bid drew overwhelming interest from 45 bidders and was conducted on a "basis auction" method whereby Afet rice futures would be used as the reference. Deliveries were set for September, October and November.

Afet's largest-ever auction came after the National Rice Policy Committee ruled on July 17 that officials could release a total of 763,920 tonnes of milled rice bought during the 2008-09 main-crop season for sale via the exchange.

Pak growing Indian basmati under different name

The government said world's longest basmati rice variety Pusa-1121, developed by Indian scientists, is being grown in Pakistan under a
different name.

"As per reports available, it (Pusa-1121) is being grown in Pakistan, but not in a major way," minister of state for agriculture K V Thomas said in a written reply in the Rajya Sabha on Friday.

Pusa-1121 is being marketed under the 'Kayanat' or 'Kianat' label, though the Pakistan government has not registered the variety in that trade name so far, he said.

"Media reports and traders' advertisements on the Internet suggest the existence of generic/trade names like 1121 (Kayanat), Kianat and 1121-Kiyanat-Pussa in Pakistan," Thomas said.

Thai rice update

Domestic and export prices declined by 3-5 percent as the Government will begin a series of stock releases next week. Despite a sharp contraction of domestic prices of white rice this week, prices of white rice will likely fluctuate as supplies of white rice paddy remain tight.

Parboiled rice export demand remains strong as the removal of Indian rice export ban is reportedly postponed.

Japan Rice Output May Drop to Six-Year Low

Japanese rice production may decline 6.9 percent this year to the lowest level in six years as cool and rainy summer weather curbs yield, a research institute said.

 

Japan, the world's largest grain importer, is self- sufficient in rice as the government protects growers from foreign competition with a 778 percent tariff on imports. The nation imported 1.1 million tons of rice in the year ended March 31, 1994 and an additional 1.5 million tons in the following year after a cool, rainy summer damaged crops in 1993.

 

"Rice output will probably fall short of consumption this year, but given large stockpiles of old crops, overall supply will be sufficient to meet domestic demand," Takahashi said.

Saudi-based partners launch Africa rice farming plan

A group of Saudi-based investors, including the Islamic Development Bank (IDB), will launch later this year a seven-year plan worth $1 billion in Africa to reduce dependency on rice imports and supply the Middle East region.

 

"We are looking at three to four countries: Mali, Senegal and may be Sudan and Uganda," said Salim Lalani, head of investments at Foras International Investment Company, one of the partners in the project.

 

 

Afet will open rice bidding to solve supply shortage

Agricultural Futures Exchange of Thailand (Afet) will open bidding a big lot of rice 763,920 tonnes including jasmine rice and 5 per cent rice on August 6.

The auction comes under the National Rice Policy Committee approval to bring the government rice stockpile under the Commerce Ministry's rice pledging programme.

India’s Wettest Month to Get More Rain Than Forecast

India received more rainfall this month than forecast by the weather bureau, helping ease a dry spell that's affected sowing of crops in the world's second- biggest producer of rice, wheat and sugar.

The monsoon has strengthened since July 8, helping narrow the rain deficit to 19 percent so far this season from as high as 52 percent in June. High farm output will help Prime Minister Manmohan Singh push economic growth back to a 9 percent pace and to meet a poll promise of ensuring food security for the poor.

Agricultural output may not drop if plantings gather pace during next week in the northern states, the biggest growers of grain, sugar cane and lentils, Crisil Ltd., the Indian unit of Standard & Poor's said in a report yesterday.

"Empirical evidence shows that whenever poor rainfall in June is compensated by good rains in July and August, agricultural performance was normal," the rating agency said. "June rain, though relevant from the sowing perspective, is not a critical determinant of agricultural performance."

The nation, which has bought a record 30 million metric tons of rice and 25.1 million tons of wheat from farmers this year, may not face any shortage of food grain this year, Sonia Gandhi, chief of the ruling Congress Party, said today.

"We're assured by the fact that we have adequate buffer stocks" to cope with shortages, she told party lawmakers.