Bids for India rice import tenders extended

India's three state-run trading firms, which recently floated global tenders to import 30,000 tonne of rice have extended the validity of bids received for their import tenders, agency reports said.

State Trading Corp of India (STC), MMTC Ltd and PEC Ltd on Monday received 18 bids, mostly from international trading firms, including Louis Dreyfus and Ameropa. The bids, which ranged from $373 to $599 per tonne, were valid until Thursday.

"We have extended the bids until Nov 17," Reuters news agency reported quoting a unnamed government official.

Confirming the move, another government official, who is directly involved in the process, said the three firms were in the process of informing the suppliers. "We have been informed of the government decision to extend the deadline," Reuters said quoting an unnamed Mumbai-based trader with the Indian arm of a global trading firm.

MMTC chairman and managing director Sanjiv Batra on Wednesday said his firm was unlikely to place an order due to high prices quoted in the bids.

The decision by the world's largest rice importer :country-region Philippines :place to buy 600,000 tonne of the grain in December, its largest ever single buy, has pushed prices up.

Monday, PEC received seven bids, MMTC got six and STC received five bids to import rice. The bidders have offered rice varieties from Pakistan, Thailand, Vietnam and Myanmar.

The import was necessary following an around 15 million tonne fall in rice production during the kharif sowing because of drought in several parts of the country.

As per government estimates, India's rice production during the kharif season this year is expected to be around 69 million tonne, down from almost 85 million tonnes last year.

Thursday, the International Grains Council (IGC), estimated that India 's total rice production during the kharif and rabi season might go down by 14% to around 85 million tonnes in 2009-10 due to drought and floods. Though production shortages are also seen in Pakistan, Bangladesh, Vietnam, Indonesia and Philippines, the sharpest fall in output is expected to be in India , the report said.

The London-based global grain body pointed out that the production fall in India might also bring down the world's rice output by two per cent to 435.1 million tonne this year.

Rice output in neighboring countries Bangladesh and Pakistan may decline by 2.6% each to 30 million tonne and 6.2 million tonne, respectively in 2009-10, the report said. In Vietnam, the staple food grain output may drop by 2.2%, while both Indonesia and Philippines are likely to see a marginal slump during this season, the report said.

Thailand prics to go up

Rice farmers and the government will soon enjoy better prices due to higher global demand and a shortage in India.

The Commerce Ministry yesterday released the new reference prices for rice for November 16-30 trading.

They are considerably higher than for the first half of the month because of increased demand.

The reference price for paddy white rice is set at Bt8,914 a tonne, against Bt8,389 in the previous round.

"The government will have to pay for a lower gap between the guaranteed price and the reference price, as market prices are rising," said the ministry's permanent secretary, Yanyong Phuangrach.

Under the government's guaranteed-income project, when farmers receive less than the guaranteed price from selling their crops, it will pay the difference between the guaranteed and reference prices.

With the guaranteed price for paddy white rice at Bt10,000, the government will have to pay only Bt1,086 per tonne to farmers under the new reference price.

The reference price for paddy Pathum Thani rice is Bt10,501 a tonne. The government will not however have to make up any shortfall, as this is higher than the guaranteed price of Bt10,000.

However, the reference price for jasmine rice has been lowered from Bt14,840 to Bt13,002 a tonne for the second half of this month, due to higher supply during the current main harvest season.

The guaranteed price for jasmine rice is Bt15,300, meaning the government will have to pay Bt2,298 a tonne to farmers.

However, the price of jasmine rice is likely to increase considerably following higher global demand, said Yanyong.

India has turned from a world supplier to a buyer of rice in order to maintain stocks of about 10 million tonnes. It will announce bidding for more batches in the near future to compensate for the loss of 10 million tonnes due to drought this year.

Usually, India keeps 30 million tonnes of rice in storage to ensure food security.

The natural disasters that have hit many rice-exporting countries have directly damaged their production, while world consumption of the staple is increasing.

Japan and the Philippines have staged rice auctions and China plans to import more rice soon.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the price of jasmine rice had fallen due to supply increasing during the current harvest season by 15-20 per cent from last year.

High jasmine-rice prices over the past two years persuaded farmers to grow more of the commodity.

Production of paddy jasmine rice is expected to reach 6.5 million-7 million tonnes this year.

Chookiat added that the higher price for paddy white rice was also due to the Philippines opening an auction for 600,000 tonnes of imports next month.

Thailan weekly report

Domestic and export prices continued to increase by 3-5 percent in anticipation of an additional Philippine tender to buy 600,000 tons of 25% grade white rice on December 1, 2009 for February – May, 2010 delivery. The Philippines had just finalized a tender on November 6, 2009 for 250,000 tons of 25% grade white rice of Vietnamese and Thai origin at $470-480/MT C&F. Thai exporters expect that India will likely need to import 1.0 – 3.0 million tons of rice. These unusual imports are results from crop failures due to typhoon and drought damage.

Parboiled rice prices also increased $20-30/MT from the previous week. Exporters are currently fulfilling pending shipments of 200,000 tons to African countries, mostly to Nigeria. The shipments are scheduled to arrive before mid-December, 2009.

Presently, domestic prices have increased above benchmark prices for the first time since the implementation of the insurance program took effect on October 1. Farmers selling paddy in this period will receive higher income than the established insurance prices. This week's price increases are the result of additional government measures implemented last week to stabilize domestic prices, which are the direct purchase of 2.0 million tons of white rice and on-farm mortgage of 2.0 million tons of fragrant rice at benchmark prices.

Philippines should brace for rice supply problem next year

The Philippines needs to brace for another possible rice supply shortage in the first half of 2010, triggered by a host of factors including the two typhoons that recently hit the country, an agriculture expert said Wednesday here on the sidelines of a press conference on the environment.

Achim Dobermann, deputy director general for research of the Laguna-based International Rice Research Institute (IRRI) also said that the supply problem would cause rice prices to go up next year, reminiscent of the 2008 global rice crisis.

"It is quite likely we will see another problem because of Ondoy and Pepeng," Dobermann said.

He said that before the two typhoons struck, there was already a tight supply situation in India, a major rice-exporting country, because of a new government policy that provides rice subsidies to marginalized sectors.

"With India not being able to export and the Philippines with a tight supply problem, definitely, there is a very tight situation," Dobermann said.

Vietnam, too, he added, is also experiencing rice supply problems because of the two typhoons that struck the Southeast Asian country after hitting Manila.

"If you take all these factors together, then you will have a very tight market and prices will rise," Dobermann said, adding that this could happen "in the first half of next year."

Despite the looming rice supply problem, Dobermann said Filipinos should not panic.

"Filipinos should not panic. Don't stock up on rice because it creates anxiety," he said.

Dobermann also said "Thailand is a great stability factor" because it can export large quantities of rice on the back of a government incentive to farmers to plant huge volumes of the staple.

The Philippine government, for its part, is buying 600,000 tons of rice in a Dec. 1 tender, the country's biggest ever. The huge order will guard against potential supply shortfalls caused by the recent storms.

The storms damaged prime agricultural lands just before the start of the harvest season. 

The winning rice seller would bring in the shipment between February and May next year, agriculture officials have said.

No panic, but rice price pressure building: IRRI

Ample supplies mean the rice market does not need to panic about rising demand from the Philippines, India and Africa or the El Nino threat to production, an industry expert said on Friday.

"The Philippines is the first big blow to the market, and secondly, what makes people a little twitchy is India importing," Robert Zeigler, director general at the International Rice Research Institute, told Reuters in a phone interview.

"I don't think we'll have shortages but what will happen is we'll just have higher prices," said Zeigler.

Typhoon-hit Philippines, the world's largest rice buyer, has been the most aggressive so far in securing supplies, as it tenders for a record 600,000 tonnes next month, after contracting to buy 250,000 tonnes last week.

India, normally a major exporter, has also been in the market to buy rice to prevent possible shortages after severe weather ravaged rice fields this year. But Indian state firms have yet to place orders due to high prices offered.

El Nino, which can bring drought and weaker monsoons in Asia, is also a threat to rice production.

"Clearly there's upward pressure on prices, but I don't think there's reason for panic," he said.

Zeigler said prices are unlikely to return to record levels seen in 2008 given large stocks in big consumers China and India.

While China has kept its rice inventory levels a state secret, India's government-held rice stocks were projected to be around 15 million tonnes by October 1, the highest level since 2002, according to a United States Department of Agriculture attache report last month. Zeigler said there is a need for global rice trading volumes to increase by at least 10 million tonnes a year to help stabilise prices.

Globally traded rice stands at around 30 million tonnes, only about 7 % of world production.

Export curbs by producers including India helped drive benchmark Thai prices to a record USD 1,080 a tonne in April 2008, sparking food riots in some parts of the world.

Thai prices have halved since then, although Vietnamese prices are rising on demand from the Philippines, Hanoi's biggest market.

India rice traders against export price hike

Indian rice exporters have asked the government not to raise the floor price for overseas sale of aromatic basmati variety, the Hindu Business Line newspaper said on Thursday.

Basmati, a premium grade, is not consumed widely within the country, V.K. Arora, president of the All India Rice Exporters Association, told the paper.

India, the world's second-biggest producer, in September cut the minimum export price of basmati to $900 per tonne from $1,100 per tonne.

Analysts believe the government may raise the export price to restrict overseas sales after poor monsoon rains hit the summer-sown harvest.

India MMTC says rice bids too costly

Indian state-run trader MMTC is not likely to import rice as the bids at recent tenders were too high to be acceptable, and the decision may cool prices, its chairman said on Wednesday.

Sanjiv Batra also said MMTC's October gold imports rose 44 percent from a year ago, which he said was in step with rising demand and imports into India, the world's largest consumer.

On Monday, India got 18 bids for three rice import tenders totalling 30,000 tonnes, which the government said would likely be the last foreign purchases needed to boost domestic supply after it was hit by the weakest monsoon since 1972.

But prices have been pushed up by a record 600,000 tonne tender for December by the Philippines, the world's largest importer of the grain.

Traders said Vietnam rice prices rose this week on the back of a jump in demand for exports after a Philippine tender.

"There is no proposal to buy rice at high prices. The matter has been referred to the government," Batra told reporters. "Domestic prices are much lower."

The lowest bid for the Indian tenders came in from MTPL at $373 a tonne, with global firms including Louis Dreyfus and Ameropa quoting up to $599 a tonne.

"If we don't buy, prices will cool," Batra said.

The U.S. Department of Agriculture had forecast a fall of between 15 million and 17 million tonnes in India's rice output for 2009/10 from a record 99.2 million tonnes in 2008/09.

Kien Giang (Vietnam) exports more than 1 million tonnes of rice

The southern province of Kien Giang has so far exported around 879,000 tonnes of rice, 25 percent higher than this year's plan.

In the two remaining months, the province plans to ship an additional 150,000 tonnes, brining the total export volume for this year to more than 1 million tonnes.

Exporters from Kien Giang province are expanding their markets and boosting domestic consumption to bring benefits to both farmers and businesses.

The amount of exported rice from the Mekong Delta region increased by 50 percent but the value was lower than last year.

Currently, rice export markets in the region and at home are making progress. The Vietnam Foot Association (VFA) said that Vietnamese rice prices increased by US$70 per tonne compared to last month because of a rising global demand.

Five percent broken rice is US$480 per tonne and 25 percent of broken rice is US$420 per tonne. Price rises and bumper crops have provided an excellent opportunity for domestic businesses to boost their exports.

USDA says Philippines rice imports to reach all-time high

The United States Department of Agriculture reported that the volume of rice that the Philippine imports may reach an all-time high owing to the multibillion worth of damages caused by recent typhoons.

Based on its latest report on global rice market and trade posted at its website , the "Philippines' imports are boosted 200,000 tons to a record 2.6 million for 2010 on typhoon-related damages to the rice crop."

However, the Philippine Department of Agriculture refused to confirm the data.

"I'm not at liberty to divulge any information on rice importation. I'm not sure where they got their figures so we really have to check on that first," DA Undersecretary Bernie Fondevilla said in an interview.

The National Food Authority has earlier announced an importation of not less than 850,000 MT to secure supply for 2010.

A first tender of 250,000 MT was awarded to state-owned Vina Southern Food 2 and Daewoo International Corp. that will arrive in several tranches starting January until April 2010.

A second tender which will be the country's biggest importation volume in a single tender seeks to bring in as much as 600,000 MT rice. The auction will be on December 1, 2010.

Ludivico Jarina, deputy administrator of the National Food Authority, said the good prices quoted by traders during the previous tender is an indication that the government may continue buying rice through open bidding.

The Inter-Agency on Rice and Corn (IAC), a government agency that evaluates rice and corn performance quarterly, has yet to announce the final volume for rice importation.

Government officials said the early importation was due to the damages caused by strong typhoons. The government maintains that damaged rice crop amounted to about 700,000 MT only, significantly lower than the figures cited by the private sector which is about 1.1 million MT.

The Agriculture Department has twice cut rice production forecast for next year. From an original forecast of 17.4 million MT, output was decreased to 17 million MT and further reduced to 16.9 million MT just recently.

So far, the Philippines' paddy rice production from January to September stands at 10.819 MMT. Unmilled rice production for October to December, however, will be lower by 12 percent due to the damages caused by the typhoons. The Department projected paddy rice production for the fourth quarter at 6.48 MMT.

Thai Rice Exports May Climb to Record, Group Says

Rice exports from Thailand, the world's largest shipper, may increase to a record of more than 10 million metric tons next year, according to the Thai Rice Exporters Association.

"Demand from India will be a key factor driving an increase," Chookiat Ophaswongse, president of the association, said in a Bloomberg Television interview today. "In terms of volume, 2010 will be a prosperous year for Thai rice."

Thai production in the crop year that began Oct. 1 may increase to 35 million tons, from an estimated 32 million tons in the 2008-2009 year, Chookiat said. Exports reached a record 10.14 million tons in 2004.

Global output may decline after drought in India cut the monsoon crop and storms in the Philippines destroyed at least 1 million tons. Rice, wheat and palm oil jumped to records last year, sparking concern among policy makers that there may be a food crisis as protests about prices broke out across the globe.

The price of Thai 100 percent grade-B white rice, the regional benchmark, "may increase to as high as $700 a ton in the next 12 months if India imports as much as 3 million tons," Chookiat said in a separate interview today.

"Even though next year seems to be a golden year for exporting countries, I don't think prices will go back to the 2008 high, when price went above $1,000 a ton," said Chookiat. The price reached a record $1,038 a ton in May 2008.

Gains in Thai prices may be limited because government stockpiles stand at 5 million to 6 million tons, compared with 2 million tons in 2008, Chookiat said.

The export price increased by 3 percent last week to $541 a metric ton, up from this year's low of $525 a ton in October. The Rice Exporters Association sets the price every Wednesday.

Asia Rice-Vietnam prices up on Philippine demand, Thai steady

Vietnamese rice prices were higher this week on the back of a jump in demand for exports after a Philippine tender, traders said on Wednesday.

Quotations for Vietnam's 5 percent broken rice rose to $460 a tonne, free on board (FOB), from last week's $440-$450.

The 25 percent broken rice rose to $420 a tonne, FOB, from $395-$405 last week.

Traders said Vietnamese rice rose after the Philippines awarded Vietnam's top exporter, Vinafood 2, a contract to supply 150,000 tonnes [ID:nMAN377986].

Prices were also supported by Manila's announcement it would tender for another 600,000 tonnes in December. [ID:nMAN394827]

However, prices still lacked momentum to rise sharply and demand from the Philippines alone was not enough, traders said.

"That volume of 150,000 tonnes is not high compared with Vietnam's stock and its loading capacity, so it didn't change prices much," a trader in Ho Chi Minh City said.

The Vietnam Food Association, a rice industry body, said exporters had stocks of 1.8 million tonnes -- the government had told them to buy grain to support the market -- and another 1 million tonnes was held by farmers.

The buying programme helped support domestic paddy prices this week, which were quoted at 4,000-5,000 dong ($0.22-$0.28) per kg against last week's 3,500-5,000 dong.

Vietnam, the world's second largest rice exporter, has contracted to export 6.45 million tonnes so far this year, a jump of 55 percent from the same period last year, an industry report said on Wednesday. [ID:nHAN475441]

In leading exporter Thailand, rice prices were steady, but remained supported as the government continued to buy direct from farmers in order to prop up the market, traders said.

The benchmark 100 percent B grade white rice RI-THWHB-P1 was steady at $550 per tonne, traders said.

They said demand remained poor after Thai exporters came away from the Manila tender empty-handed due to uncompetitive prices.

"Demand was thin and the news on Indian imports was not big enough to lift prices," one trader said.

India said on Monday it had received 18 bids for three rice import tenders totalling 30,000 tonnes, which the government said may be the last foreign purchases needed to boost its domestic supply, hit by the worst monsoon in three decades. [ID:nNSP413298]

Traders in Thailand said India was believed to have bought 25 percent broken grade white rice from Myanmar through international trading houses at around $360 per tonne, cost and freight. They declined to give details on the quantity bought.

Another trader said: "As far as I know, India is buying low-quality rice from Myanmar at cheap prices, but the quantity is too small to lift world prices." (Additional reporting by Ho Binh Minh in Hanoi; Editing by Alan Raybould and Clarence Fernandez)

Korea Agro-Fisheries Buys 2,988 Tons of Thai Rice at Tender

Korea Agro-Fisheries Trade Corp., a state-run South Korean food buyer, bought 2,988 metric tons of Thai rice as part of an international trade program.

The state agency paid $648.40 a ton for the non-glutinous, milled rice in a tender on Oct. 28, according to a notice on the company's Web site.

The agency rejected offers for a further 29,682 tons of Chinese rice in the tender, the notice showed. Results are given more than a week after offers are submitted.

The Northeast Asian nation, which is 99 percent self- sufficient in rice, has imported the grain since 1995 under a so-called minimum-market-access program that mandates the purchases.

India 'Price band of $375-450 /t to fetch cheaper rice'

THE Indian government should specify a price band of $375-450 /tonne for the 3,00,000 tonnes rice that it wants to import through STC,
MMTC and PEC in order to facilitate cheaper imports from Pakistan and Myanmar, grain traders maintain.

The tenders opened from the three parastatals, for 100,000 tonnes each, were floated on Monday but are open ended. Trade monitors contend that if the Indian government wants to ensure that the cheapest and most commercially viable rice exporters—Pakistan and Myanmarmake the grade in the tenders, India should specify a price band of $375-450

"Not only are imports from these two countries cheaper, but it is only imports within this price range that will ensure that the government neither pushes down domestic price for varieties such as Sona Masoori (Myanmar rice is similar to this quality) even while making certain that Indian imports at this juncture will not impact significantly on world rice prices. The imports should be in trenches and in small quantities," former head of the All India Rice Exporters' Association (AIREA) Vijay Sethia told ET.

Pakistan is reportedly interested in bidding for the tenders, on the strength of a one million tonne surplus this season. It is quoting rice at $450, while Thai and Viet Nam rice are quoting at $470 and $540/tonne respectively.

"Imports are mostly viable from these two countries," a Delhi-based rice trader said. However, there are apprehensions that rice trade with Pakistan may not be that easy in view of the political equations between the two countries.

Myanmar has lesser surplus and some problems are expected in the quality standards. However, Mr Sethia pointed out that even transport charges between Karachi and Mumbai would be lower than if rice were imported by India from Vietnam and Thailand.

The Centre, which has put up a proposal of two million tonne imports to the EGoM to be held this week, is understood to be looking at positive responses from Vietnam on 25% brokens, which has five million tonnes in surplus rice and is cheaper than Thai rice.

Thailand Rice Trade to Have ‘Golden Year,’ Exporter Says

Rice exports from Thailand, the world's top supplier, may jump to a record next year on increasing demand from the Philippines, India and Indonesia, said an executive from the country's biggest exporter.

"Unexpected import demand from India and Indonesia will drive the global rice trade higher," Sarunyu Jeamsinkul, managing director of Asia Golden Rice Ltd., said in an interview. "That will be on top of demand from the Philippines, which may need to import around 2.3 million to 3 million tons. 2010 will be a golden year for rice," he said.

Global production may decline after drought in India slashed monsoon output and storms in the Philippines destroyed at least 1 million tons of the crop. Rice, wheat and palm oil hit records last year, sparking concern among policy makers that there may be a food crisis as protests about high prices broke out across the globe.

"Strong demand in the global market would drive Thai exports to a record next year," said Rewat Yenchai, an analyst at AGROW Enterprise Ltd. in Bangkok. "Thailand would benefit from a decline in global production."

Prices may also return to record levels next year if the Thai government maintains its stockpile level, said Sarunyu.

"We may see rice climb above $1,000 a ton," Sarunyu said. "There is a strong possibility we'll see a rice crisis next year as India faces drought and Indonesia may feel the pinch of El Nino weather."

'Friendly Prices'

Thai 100 percent grade-B white rice, the benchmark regional export price updated weekly by the Thai Rice Exporters Association, was set at $541 a ton last week. The price surged to a record $1,038 in May 2008.

Still, if the Thai government sells inventories under "government-to-government contracts at friendly prices, we could see the price in the $600-$700 range," Sarunyu said.

Thai prices are "unlikely to hit a record next year because of limited purchasing power and the high level of stockpiles held by the Thai government," Rewat said.

Thailand's stockpiles at the end of the 2008-2009 marketing year on Sept. 30 were 3.12 million tons, according to U.S. Department of Agriculture figures released Oct. 9. Inventories will rise to 3.52 million tons next year, the USDA estimated.

Thai rice exports will approach a record 10 million tons in 2010 on higher African demand and a lack of shipments from India, Chookiat Ophaswongse, the Thai Rice Exporters Association's president, said Oct. 2. Production may climb to 35 million tons, from an earlier estimate of 32 million tons, Chookiat said in a separate interview Nov. 5.

Expanded Stockpiles

The country's exports this year may total 8.3 million tons, lower than the association's target of 9 million tons, as Thai prices are less competitive than rivals and buyers built up stockpiles after prices jumped last year, Sarunyu said.

Asia Golden, which was set up in 1999 by a group of traders and millers, may export up to 1.6 million metric tons of rice next year, up about 23 percent from a planned 1.3 million tons this year, he added.

The Philippines held its first tender for next-year supplies last week, a month earlier than usual, and is buying at least 850,000 tons of rice in two tenders this year. The country imported a record 2.4 million tons in 2008.

India may buy as much as 3 million tons next year and become a net importer for the first time in 21 years, Samarendu Mohanty, a senior economist at the International Rice Research Institute, said Oct. 28.

El Nino

Indonesia, the world's third-largest producer, may shelve plans to export 2 million tons of milled rice next year if dry weather causes production to miss forecasts, state food company Bulog said Oct. 6.

Sea surface temperatures were at least 1 degree Celsius above average across much of the central and east-central equatorial Pacific in the four weeks to Oct. 31, according to a Nov. 2 report by the U.S. Climate Prediction Center. The center considers El Nino conditions to occur when monthly sea surface temperatures are at least 0.5 degree Celsius above average.

"The dryness should be coming in anytime now," Dorab Mistry, director of Godrej International Ltd., said yesterday.

Africa will remain a key export market for Thai rice next year and the country faces fierce competition as Brazil, Pakistan and Vietnam plan to increase shipments of so-called parboiled rice to Africa, Sarunyu said.

Thai shipments of parboiled rice to Africa may rise to about 4.5 million to 5 million tons this year, beating a previous forecast of 3.5 million tons, and may increase to 5.5 million tons next year, Chookiat said on Oct. 2.

Vietnam set for four million tonne rice store

Every year, Vietnam produces 38 million tonnes of rice, including 4-5 million tonnes for export. However, current rice storehouse systems can hold two million tonnes only, and represent only a temporary place for storing rice rather than long term preservation.

 

Because Vietnam has poor preservation technology, it suffers a high post-harvesting loss proportion of 11-12 percent. It is estimated that Vietnam loses several thousand billion dong a year because of losses during preservation and processing.

 

For that reasons, experts say, Vietnam urgently needs to build a standard rice storehouse system.

 

Deputy Minister of Agriculture and Rural Development Ho Xuan Hung says the State encourages all economic sectors to make investment in the project.

 

"Investors will be able to borrow loans at preferential interest rates of 6.5 percent per annum. Besides, they will be able to get loans at zero percent to import modern equipments used in farm produce preservation and processing which cannot be made domestically," Hung said.

 

Doan Manh Hoa, a senior official of MARD, added that rice storehouse investors will enjoy the land use fee exemption within five years after the project begins operation. The state will prop up 20 percent of the total expenses needed for site clearance and 30 percent of expenses needed to upgrade the infrastructure outside the fence of the rice stores.

 

Investors will be also able to enjoy corporate income tax exemption for  three years after the project becomes operational and the 50 percent tax reduction in the next two years.

 

Cao Van Hoa, deputy director of the Tien Giang Department for Agriculture and Rural Development, suggests that the storehouse system needs to be equipped with a modern drying system which dries rice continuously. In addition, both temperature and humidity control are vital.

 

If so, the rice can be preserved not only for several months, but for several years which allow Vietnamese exporters to export rice at any time they want, to get the best prices.

 

Philippines makes biggest ever rice tender

The Philippines will tender for a record 600,000 tonnes of rice to guard against potential supply shortfalls from crop damage caused by recent storms, officials said on Tuesday.

The December 1 tender, the country's biggest ever, would likewise be a "forward-buying" operation in anticipation that prices may jump next year, a senior agricultural official told AFP.

The official conceded that such a huge order would likely push up international rice prices but said this could not be avoided.

"There are rumours that India might be calling for a tender for a huge amount," said the official, who asked not to be named.

However, International Rice Research Institute economist Samarendu Mohanty said he did not expect to a spike.

"The Philippine tender was expected so I don't expect the market to react," he told AFP.

"The Indian drought situation could mean a significant loss in production this year (but) they have lots of stocks so they should be able to handle it in the short term."

Tropical storms Ketsana and Parma caused the worst flooding in four decades on the main Philippine island of Luzon and left many of the country's prime rice lands inundated shortly before the start of the harvest season.

While the full extent of the damage to ricelands has not yet been assessed, the agriculture department is confident it has enough rice stocks for this year.

The country with the winning bid likely will ship the rice between February and May next year, the official said.

The Philippines relies heavily on imports to feed its rapidly growing population of 92 million.

In 2008, the country bought some 2.3 million tonnes of rice despite record world prices, causing political problems for President Gloria Arroyo.

Agriculture Secretary Arturo Yap has said imports this year will likely reach about two million tonnes.

Philippines Plans Record Rice Tender After Storms

The Philippines is coming back to the market for the second time in a month with a tender for 600,000 tonnes of rice in December, its largest ever single buy that could see prices spike.

The world's largest rice importer is securing stocks after storms damaged croplands in the main rice growing areas about a month ago. Traders say it is seeking to ensure there is enough of the national staple ahead of general elections in May.

State-run National Food Authority said on Monday it is seeking 600,000 tonnes of 25 percent broken white rice at a tender on Dec. 1. It is the first time the agency has tendered for a volume this big, according to NFA data.

The grain is scheduled for arrival between February and May 2010.

"This is such a huge amount of rice, and that should drive up the price globally," said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.

"At the moment, the price could go up 5-10 percent easily for any rice grade," said Ophaswongse, citing the "psychological impact" of the sizeable volume that Manila is buying.

The agency has set a budget of 15.264 billion pesos ($325 million), or around $541 a tonne, cost and freight, at current exchange rates.

NFA awarded two contracts on Friday for supply of a total 250,000 tonnes of the same rice grade to Vietnam's Vinafood 2 and Korean trading firm Daewoo International Corp <047050.KS> after a tender on Nov. 4. [ID:nMAN377986]

The lowest bid at last week's tender, submitted by Daewoo, was $468.50 a tonne, C&F, well below NFA's budget of around $536 a tonne based on exchange rates at that time.

Prices for 25 percent brokens have already gone up about 10 percent since last week's tender, and could spike further ahead of the December bidding, said Tae-Hyun Yun, manager at Daewoo International in Manila.

"We will join this December tender," said Yun, adding the trading house will source the grain from either or both Thailand and Vietnam.

For next month's tender, NFA said source countries should be Thailand, Vietnam, China, Pakistan, Australia, India and the United States.

Maximum volume from Pakistan, U.S., Australia and India will be 100,000 tonnes, and up to 600,000 tonnes from Vietnam, China and Thailand, the agency said.

Ophaswongse said the market expects the Philippines to import between 2.5 million and 3.0 million tonnes of rice for 2010.

"The whole world knows that the Philippines will need more rice next year after a couple of storms, and it's an election year.

"Those two factors will probably make them buy a bit more," he said.

The Philippines imported 1.775 million tonnes of rice for 2009, including 1.5 million tonnes bought via an inter-government deal with Vietnam.

That was down from a record 2.3 million tonnes in 2008 which helped push prices of the grain to all-time highs above $1,000 a tonne

Philippines seek 600,000 tons more rice

The Philippines announced on Monday it will hold its second rice tender in less than a month, this time to buy 600,000 tons, as the world's largest importer of the grain secures 2010 supplies.

State-run National Food Authority (NFA) said on Monday it is seeking 25% broken white rice at a tender on December 1. The grain is scheduled for arrival between February and May 2010.

The agency has set a budget of P15.264 billion ($325 million) for the purchase, or around $541 a ton, cost and freight, at current exchange rates.

NFA awarded two contracts on Friday for supply of a total 250,000 tons of the same rice grade to Vietnam's Vinafood 2 and Korean trading firm Daewoo International Corp after a tender on November 4.

The lowest bid at last week's tender, submitted by Daewoo, was $468.50 a ton, C&F, well below NFA's budget of around $536 a ton based on exchange rates at that time.

For next month's tender, NFA said source countries would be Thailand, Vietnam, China, Pakistan, Australia, India and the United States.

Maximum volume to be sourced from Pakistan, US, Australia and India will be 100,000 tons, while volumes from Vietnam, China and Thailand will be up to 600,000 tons, the agency said.

The Philippines has moved early to ensure there will be enough of the national staple in the first half of 2010 after typhoons hit farmland in September and October.

Vietnam to export rice to India, with conditions

The Vietnam Food Association (VFA) admitted that a rice export contract with India would be a good opportunity for Vietnam. VFA also revealed that Vietnam will not hurry to sell rice to India, since rice prices keep raising and world demand remains very high.


The Indian Press Trust reported on November 4 that the Government of India plans to import some two million tons of rice from Vietnam and Thailand because of India's decreasing rice output.

 

Questions have been raised about Vietnam's ability to provide rice considering the nation already has signed contracts to export six million tons of rice already and the typhoon severely damaged the central region.

 

VFA Deputy Chairman Nguyen Tho Tri affirmed that Vietnam is more than capable of exporting rice to India.

 

Tri, in an interview with newspaper Thoi bao Kinh te Saigon, said: "I'm sure that the rice stocks among farmers are more than enough to sell to India."

 

He has also reassured the public that the delivery date will coincide with Vietnam's winter-spring crop harvest in January and February 2010, when the supply will be bountiful.

 

Tri said that in a working session with Indian diplomatic agencies, VFA learned that India plans to purchase three million tons of rice, not two million tons as previously reported.

 

In fact, Tri explained, Vietnam can supply more than white rice to India, which accounts for 20-30 percent of the total sum of three million tons.  This means that the volume of rice demanded by India from Vietnam is not overwhelming for Vietnam.

 

According to Tri, Vietnamese enterprises have lowered their sales to India recently due to business difficulties with the market. Under Indian regulations, rice exports must be examined at the destination port and the results will be released one or two months after the exports arrive. (Other rice importers authorize quality examinations to be conducted by Vietnamese inspection agencies at the departure port).

 

Payment will be made only after the examination results. Under international practice, after rice is loaded onto ships, exporters receive payment through a letter of credit (L/C).

 

If India concludes that the rice has low quality and refuses to accept the products, then exporters must keep goods at destination ports or ship them elsewhere, resulting in exporters having to "bury" their capital in the rice exports.

 

Tri noted that, if Indian importers change their regulations, Vietnam will be able to export rice to India.

 

"The key issue is the price. World demand is increasing. We do not have to sell to India at any cost," Tri acknowledged.

 

India rice market update

Despite the government's posturing, private trade is unlikely to import rice unless the rupee strengthens further, so that the Centre
decides to give rice traders an import subsidy. But state-owned agencies such as STC, MMTC and PEC will close their tenders for 30,000 tonne of rice import by this week, irrespective of how commercially unviable it is at current global prices.

The food ministry has already moved a proposal to the Empowered Group of Ministers (EGoM) for approval to import around two million tonne of rice in the mid-term, after denying any such move. The proposal is likely to be taken up for consideration on November 12.

The EGoM is also likely to issue a notification on hiking minimum export price (MEP) for Basmati rice to urgently prevent anything other than the premium qualities from going out of the country. The current MEP is fixed at $900/tonne, but in real terms, it works out to a much lower $788/tonne, allowing lesser quality rice to be exported noticeably in the name of Basmati.

At this MEP, even a non-Basmati rice variety such as Sona Masoori becomes competitive in world markets. Against that, a new notification could hike the Basmati export MEP to $1,000/tonne. On Wednesday last week, food minister Sharad Pawar insisted that there would be no imports on government account since the Centre had "sufficient stocks" to meet its welfare and PDS needs.

The onus was, therefore, on private traders, he said, to import at zero duty for meeting the short supply in the open market. India consumes about 90 million tonne of rice annually, but kharif rice output shortfall was assessed last week at 15 million tonne, the biggest drop in recent years.

At Rs 45.91 to a dollar exchange rate in mid-October, Thai rice sold at $545/tonne FOB, translating into landed cost in Indian ports to Rs 26,693/tonne. This is considered unviable politically. The landed cost for Vietnam 15% brokens works out to Rs 18,946.60/tonne (at $380/tonne) and 25% brokens works out to Rs 17,780.50/tonne (at $355/tonne).

The food ministry's argument is that Vietnam brokens are viable to import since wholesale price of rice per quintal (one-tenth of a tonne or Rs 19 and Rs 15/kg) is Rs 1,900 at Delhi and Rs 1,500 at Mumbai. But private sector importers will have to add internal transport, packaging, fumigation and other charges, making the actual price of imported rice commercially unviable.

Moreover, the price of premium varieties such as Basmati have plummeted, the price of non Basmati, average quality
rice is at a premium. Currently, exporters are only being offered $900/tonne for Pusa 1121 Basmati variety, which sold at $1,200-1,500/tonne last year to top drawer buyer Iran. To boot, Iran last week hiked tariff on Basmati imports to 45% from only 4% and is set to review this next month in a bid to protect the price of domestic rice varieties.

India gets 18 bids in three rice tenders

India has received 18 bids for three rice import tenders, totalling 30,000 tonnes, which the government said may the be the last foreign purchases needed to boost its domestic supply, hit by the worst monsoon in three decades.

Global trading firms, including Louis Dreyfus and Ameropa, made offers of between $373 and $599 per tonne in the three separate tenders of 10,000 tonnes each floated in October, government sources said.

MTPL was the lowest bidder, the sources said. The bids are valid until Nov. 12.

The foreign trading firms have offered to supply rice varieties from Pakistan, Thailand, Vietnam and Myanmar.

Industry officials and traders said the response was good but high bid prices would discourage India, the world's second-biggest producer, from importing more in the near future.

The government said there was no need to import more rice.

"I do not think so," Junior Farm Minister K.V. Thomas told reporters when asked whether there would be a further need for rice imports.

Traders said rice prices, which have surged recently, would rise further with the Philippines, the world's largest importer, floating a tender next month to buy 600,000 tonnes.

"The response is good. India buying rice is a matter of great interest in the global trade. It will fuel sentiments up," said R.S. Seshadri, director of Tilda Riceland.

Chicago Board of Trade rice futures rose on Friday, with the most-active January contract RRF0 climbing nearly 1 percent to $15.29 per hundred weight, not far from a contract high reached last week.

PEC Ltd received seven bids, MMTC Ltd got six bids and State Trading Corp of India had five, government sources said.

India's rice output is set to plunge this year after the worst June-September monsoon rains in decades destroyed crops or delayed sowing, and subsequent floods in some states further ravaged rice fields.

The U.S. Department of Agriculture had forecast a fall of between 15 million and 17 million tonnes in India's rice output for the marketing year 2009/10 from a record 99.2 million tonnes in 2008/09.

India's PEC gets 7 bids for rice tender

India has received seven bids for one of its tenders to buy rice and the federal government said on Monday there may not be any imports on top of its move to ship 30,000 tonnes.

India, the world's second-biggest rice producer, floated three tenders to import a total of 30,000 tonnes of rice last month, through state-owned companies MMTC, STC STC.BO, and PEC Ltd. to meet an output shortfall.

"I do not think so," Junior Farm Minister K.V. Thomas told reporters when asked whether there would be a further need for rice imports.

In the PEC tender the bidders, including Swiss trader Ameropa and the Singapore arm of Louis Dreyfus, have offered rice varieties from Pakistan, Thailand, Vietnam and Myanmar, government sources said.

The officials said the price bids will be opened later.

News of India's rice tender came as the Philippines, the world's biggest rice buyer, comes back to the market for the second time in a month with a tender for 600,000 tonnes of rice in December, its largest ever single buy that could see prices spike. [ID:nMAN394827]

India's rice output is set to plunge this year after the worst June-September monsoon rains in decades destroyed crops or delayed sowing, while subsequent floods in some states further ravaged rice fields.

The U.S. Department of Agriculture had forecast a 15-million to 17-million tonne fall in India's rice output for the marketing year 2009/10 from a record 99.2 million tonnes in 2008/09. [ID:nN26205665]

Chicago Board of Trade rice futures rose on Friday, with the most-active January contract RRF0 climbing nearly 1 percent to $15.29 per hundredweight, not far from a contract high reached last week.

Seven bidders in race for India PEC rice tender

India's PEC Ltd on Monday received seven bids in its latest tender to import 10,000 tonnes of rice, government officials told
reporters.

The bidders have offered rice varieties from Pakistan, Thailand, Vietnam and Mayanmar, the officials added.

The bidders include Swiss trader Ameropa and Singapore arm of Louis Dreyfus.

The officials said the price bids will be opened later.

Myanmar expects to export 1 million tons of rice this fiscal year

Myanmar exported 670,000 tons of rice in the fiscal year that ended March 31 despite the devastation wrought by Cyclone Nargis and expected to export up to 1 million tons this fiscal year, media reports said Sunday. "The export volume of rice is expected to increase this year, maybe reaching a million metric tons by the end of the 2009-2010 financial year," an official from the Myanmar Rice and Paddy Association told the English-language Myanmar Times. As of the end of September, rice exports amounted to more than 500,000 metric tons. In the past fiscal year, rice exports earned the country 200.6 million dollars, almost double the 102.55 million earned off rice exports the year before, the Times reported. Cyclone Nargis hit the Irrawaddy Delta, the country's traditional rice bowl, in May 2008, destroying much of the rice paddy under cultivation and leaving more than 40,000 people dead or missing. Despite the storm, Myanmar exported 670,000 metric tons of rice that fiscal year, according to Commerce Ministry statistics,While Myanmar's rice exports are on the rise this year, prices are down. Myanmar rice was selling at 310 dollars a ton on the export market last month, compared with 380 dollars per ton in October 2008, according to a survey conducted by the Economic Studies and Research Institute. The price fall is in tandem with declining world prices for the commodity, institute researcher Maung Aung said. Myanmar was the world's largest rice exporter before the country opted for socialism in 1962 after strongman General Ne Win overthrew the elected civilian government of Prime Minister U Nu. Thailand has thereafter claimed the top slot. This year, Thailand expects to export about 10 million tons of rice, followed by Vietnam with 6 million. Myanmar rice is deemed poor quality compared with Thailand's and fetches considerably lower prices on the world market. Of Myanmar's rice exports in the past fiscal year, about 85 per cent went to Bangladesh, South Africa and Ivory Coast. "Africa has become a major market for Myanmar rice exporters during recent years," Maung Aung said. According to statistics provided by the Myanmar Rice and Paddy Traders' Association, Myanmar enjoyed a rice surplus of 3.24 million tons out of 15 million tons of rice produced in the past fiscal year. Domestic rice consumption among its 56 million people is about 12 million tons a year.

India Starts Importing Rice As Output Concern Grows Real

After successive years of bumper production, India has started importing rice amid a projected shortfall in output of up to 16 million tons due to drought and floods, according to traders and millers.

Though the government has maintained that it would not import rice, the purchase from overseas markets by private traders is going to intensify in the coming days as the customs duty of 70 per cent has been abolished, they added.

"About four lakh tons of rice has already been imported by traders and the figure is going to go up," said a leading exporter, who did not wish to be named.

Federation of All India Rice Millers Association General Secretary Sushil Kumar Choudhury said some traders in southern India have contracted to import rice in huge quantities from countries like Thailand.

Rice prices in the domestic market have already gone up by about 25 per cent in the last four months on supply concerns.

Earlier this week, commenting on the scrapping of customs duty on rice, Agriculture Secretary T Nanda Kumar had said the government would not import but it had created an opportunity for private traders to do so.

However, advising caution, leading basmati rice exporter Kohinoor Foods Joint Managing Director Gurnam Arora said, "Prices in the global market flare up when India decides to enter the import market. So the import should be done secretly otherwise exporters would take advantage of it."

Traders have, however, refrained from making any projection about rice import this season, saying it's too early to comment. Nevertheless, the abolition of the import duty suggests renewed government efforts to boost domestic supply.

The customs duty was scrapped after drought in about half of India delayed sowing and pulled down paddy areas by about six million tonnes while subsequent floods in Andhra Pradesh, Maharashtra and Karntaka damaged the standing crop.

India had produced 99.15 million tons of rice in 2008-09.

Though the government has piled up huge stocks, about 47 million tonnes of rice and wheat till August-end, it would still like to have considerable quantity in reserves to meet any emergency in the next year, said a trader, explaining the rationale behind the government encouraging import by removing duty. (PTI)

Thai Rice Production May Beat Forecast, Official Says

Rice production in Thailand, the world's biggest exporter, may beat a previous projection in the current crop year as increasing prices drive farmers to plant more, an official said.

Output in the crop year that began Oct. 1 may rise to as much as 35 million metric tons, Chairit Damrongkiat, deputy director general of the rice department, said in an interview in Bangkok yesterday. The department's previous projection for the 2009-2010 crop was 32 million tons.

"We see lower global production," Chairit said. "This provides us with an opportunity to increase output."

Higher output from Thailand may slow a decline in global production and boost exports available to buyers including the Philippines, preventing prices from returning to 2008's record levels. The global rice crop is forecast to drop 2.7 percent to 433.7 million metric tons in the 2009-2010 marketing year, the U.S. Department of Agriculture estimated on Oct. 9.

Rice traded in Chicago jumped 15 percent in the past month on concern that crop losses from storms in the Philippines and drought in India would curb supply and boost demand for imports.

The contract for January delivery last traded at $15.12 per 100 pounds as of 10 a.m. in Singapore. Futures climbed to a record $25.07 in April 2008 as surging food prices sparked protests around the globe.

Production from Thailand's main crop, harvested from October, is estimated to be about 23 million tons. The output increase is likely to come from the second crop, which is harvested from March, Chairit said.

Supply Response

"You would expect that with these kinds of market price signals that there is certainly potential to see more acreage, particularly in irrigated rice areas," Eric Wailes, an agricultural economics professor at the University of Arkansas, said Nov. 2. "There will be a supply response into the next spring of 2010."

India's wet season harvest, which accounts for 80 percent of the country's total output, may slump to 65 million tons, from 85 million tons a year ago, said Samarendu Mohanty, a senior economist at the Manila-based International Rice Research Institute.

The weakest monsoon in India since 1972 may help pull stockpiles in the world's five biggest rice-exporting nations down by a third to 20 million tons in the 2009-2010 marketing year, Concepcion Calpe, senior economist at the U.N. Food and Agriculture Organization, said last month.

Tender Increased

The Philippines, which lost about 1 million tons of rice to Tropical Storm Ketsana and Typhoon Parma, may buy as much as 312,500 tons of rice, 25 percent more than sought in its first tender for 2010 supplies. The Nov. 4 tender took place a month earlier than usual on concern that a supply shortage may cause prices to surge.

The State Trading Corp. of India Ltd. is seeking bids from overseas suppliers for about 10,000 metric tons of 25 percent broken rice for delivery by December at a tender on Nov. 9, according to a notice sent to traders on Oct. 30.

India may import as much as 3 million tons next year, Mohanty said, turning the country into a net importer for the first time in more than two decades.

Philippines eyes record 600,000 T rice tender

The Philippines is coming back to the market for the second time in a month with a tender for 600,000 tonnes of rice in December, its largest ever single buy that could see prices spike.

The world's largest rice importer is securing stocks after storms damaged croplands in the main rice growing areas about a month ago. Traders say it is seeking to ensure there is enough of the national staple ahead of general elections in May.

State-run National Food Authority said on Monday it is seeking 600,000 tonnes of 25 percent broken white rice at a tender on Dec. 1. It is the first time the agency has tendered for a volume this big, according to NFA data.

The grain is scheduled for arrival between February and May 2010.

"This is such a huge amount of rice, and that should drive up the price globally," said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.

"At the moment, the price could go up 5-10 percent easily for any rice grade," said Ophaswongse, citing the "psychological impact" of the sizeable volume that Manila is buying.

The agency has set a budget of 15.264 billion pesos ($325 million), or around $541 a tonne, cost and freight, at current exchange rates.

NFA awarded two contracts on Friday for supply of a total 250,000 tonnes of the same rice grade to Vietnam's Vinafood 2 and Korean trading firm Daewoo International Corp after a tender on Nov. 4.

The lowest bid at last week's tender, submitted by Daewoo, was $468.50 a tonne, C&F, well below NFA's budget of around $536 a tonne based on exchange rates at that time.

Prices for 25 percent brokens have already gone up about 10 percent since last week's tender, and could spike further ahead of the December bidding, said Tae-Hyun Yun, manager at Daewoo International in Manila.

"We will join this December tender," said Yun, adding the trading house will source the grain from either or both Thailand and Vietnam.

For next month's tender, NFA said source countries should be Thailand, Vietnam, China, Pakistan, Australia, India and the United States.

Maximum volume from Pakistan, U.S., Australia and India will be 100,000 tonnes, and up to 600,000 tonnes from Vietnam, China and Thailand, the agency said.

Ophaswongse said the market expects the Philippines to import between 2.5 million and 3.0 million tonnes of rice for 2010.

"The whole world knows that the Philippines will need more rice next year after a couple of storms, and it's an election year.

"Those two factors will probably make them buy a bit more," he said.

The Philippines imported 1.775 million tonnes of rice for 2009, including 1.5 million tonnes bought via an inter-government deal with Vietnam.

That was down from a record 2.3 million tonnes in 2008 which helped push prices of the grain to all-time highs above $1,000 a tonne.

Philippines to buy rice from Vietnam, SKorea

The Philippine government has decided to buy rice from Vietnamese and South Korean companies to cover a shortage caused by recent back-to-back typhoons, a spokesman said Friday.

The decision came two days after the two companies -- Daewoo International Corp. and Vietnam Southern Food Corp., or Vinafood -- offered the lowest bids for 275,500 tons (250,000 metric tons) to the National Food Authority, agency spokesman Rex Estoperes said.

The Philippines, the world's biggest rice importer, lost at least 1.3 million tons of rice after being pummeled over the last two months by typhoons that left more than 900 dead and rice paddies submerged.

The government last year bought a record 2.54 million tons (2.3 million metric tons) of rice to plug a 10 percent domestic production gap.

Under the contract, Daewoo will provide 110,200 tons (100,000 metric tons) at $468.50 per metric ton (1.1 tons), and Vinafood the remaining 165,300 tons (150,000 metric tons) at $480 per metric ton. Daewoo is to make deliveries from January through April, with the first 20 percent by Jan. 25 while Vinafood will complete its shipments in January.

India has differing opinions on rice shortfall

Millers and exporters do not expect a huge fall in rice output this Kharif season and say the government's estimate of a shortfall of 15 million tonne is on the higher side.

“Definitely, there is a shortfall in rice production due to drought and floods. We expect the fall to be at 10-12 million tonne,” Tarsem Saini, president, Federation of All India Rice Millers Association, said. According to the first estimate released by the ministry of agriculture, rice production would be 69.45 million tonne in the 2009-10 kharif season. It was 84.58 million tonne in the last kharif.

Vijay Sethia, former president of All India Rice Exporters Association, said private trade would have been active by now to purchase the grain in case of such a fall in output.Private trade is absent, he said, adding the procurement by the Centre has been higher than last year, though major buying is confined to Punjab and Haryana.

According to official data, the government's rice purchases stood at 91.78 lakh tonne as on November 3 as against 87.26 lakh tonne in the year-ago period.

As much as 75.04 lakh tonne of rice was procured from Punjab, followed by 15.64 lakh tonne from Haryana, and 7,000 tonne from Chattisgarh.

Andhra Pradesh rice millers association secretary Nagendra Ganappa said, “The government's rice estimate is on the higher side and does not reflect the ground reality.”We are not buying from Punjab and Haryana even though production in the state is 28% less from last year, as we anticipate the Centre to offload its huge stock in times of contingencies,” he said.

Rice production in Andhra Pradesh, the country's second largest producing state, is expected to be 65 lakh tonne in 2009-10 kharif season as against 90 lakh tonne in a year-ago period, he added. “In 2006-07 season, the government had banned sugar export for first three months while estimating a dip in sugarcane production. But the estimates proved wrong and there was a glut in sugar in the domestic market,” an exporter recalled.

India Rice procurement inching towards 10 mt

Though rice production in 2009-10 is estimated to drop by over 15 million tonne, procurement by Food Corporation of India (FCI) and state-agencies which surpassed previous year's mark last week is inching towards 10 million tonne, up from 8.7 mt achieved during the corresponding period last year.

According to data from FCI on Wednesday, procurement of rice has crossed 9.3 million tonne out of which Punjab has contributed more than 7.6 million tonne and Haryana’s contribution has been to the tune of close to 1.6 million tonne.

The procurement in other main rice growing states such as Tamil Nadu, Kerala and Chhattisgarh have also started. Till date, Tamil Nadu has contributed 21,000 tonne, Kerala 59,000 tonne and Chhattisgarh (7000 tonne).

Officials believe that procurement which has just commenced in these states will pick up in the next one month.

Meanwhile, agriculture minister Sharad Pawar, while addressing Economic Editors' conference on Wednesday said flash floods in Andhra Pradesh and Karnataka last month and delayed and deficient monsoon in north-western parts of the country could significantly pull down Kharif rice production.

He said the government intends to procure 26 million tonne of rice during 2009-10 while the government has stock of 15.3 million tonne of rice in the central pool as on 1 October 2009.

“Our main concern is to ensure the availability of foodgrain for public distribution system so that the impact of inflation on the common man is minimised,” he said

For offsetting losses in kharif, the government intends to increase acreage under boro (winter-sown) rice from 1.2 million hectare to 1.5 million hectare in states such as West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Bihar and Eastern Uttar Pradesh for ensuring additional production of 1 million tonne.

The government’s rice procurement drive is carried out during October – September season and the government procures critical grains such as rice and wheat for buffer stocks and for supplies to public distribution system (PDS) besides a smaller quantity is allocated for the armed forces.

Last year the government lifted more than 33.6 million tonne rice during the same period.

With a bumper rice production of over 96 million tonne last year, total rice procurement during 2008-09 season increased by over 15% to touch a record 33.3 million tonne.

In the corresponding period, government had bought 28.8 million tonne of rice, FCI data showed.

Cambodia's rice revolution

Baitong Co has just invested millions of dollars in post-harvesting machinery for rice-processing at your Battambang plant. What is your business strategy?
Currently, Cambodia can export only 6,000 to 7,000 tonnes of rice to Europe because it has no post-harvesting technology to process rice to an international standard, so the rest of the husked rice has been sold to Vietnam and Thailand.

We are building this factory in order to enable Cambodia to export more rice to overseas markets.

The latest post-harvesting technologies are from Japan. This will process quality rice for export.... Without it that would be no way to export quality rice.

The mill cost US$7.8 million including the cost of 16 hectares of land for the site.

Construction began in August 2008, and up to now a rice store and drying machine are in use.

The remaining processing machine, polishing machine and packaging machine will arrive in mid-November and will take a fortnight to install.

When will all the machines be up and running, and what kind of capacity will they offer?
Operations will begin in January next year, and therefore the exports of good quality rice to overseas market will begin at the same month.

The post-harvesting technologies will be capable of producing 720 tonnes of processed rice per day (running 24 hours a day), or 259,200 tonnes per year, for export.

This amount is still low because Cambodia has about 2 million tonnes of husked rice or more than 1 million tonnes of milled rice in surplus for export.

What challenges remain in developing the rice industry for export to markets overseas?
Now there is no concern over the market, but the concern is that there is no capital to buy husked rice from farmers to process – the market is waiting for us.

With this post-harvesting machinery we also now have no concern over the quality of our rice in terms of meeting the necessary standard of overseas markets. It’s about quantity due to limited capital resources.

The limited capital to buy in husked rice from farmers is a concern for us and it is an obstacle to increasing stocks to process for export.

Currently, according to data from our 700 rice millers, 300,000 tonnes of husked rice worth $75 million has been purchased from farmers for stock with their own capital and loans from the Rural Development Bank (RDB).

This year, due to a good market, millers may increase purchases of husked rice for stock up to half a million tonnes because the RDB has offered more loans.

Financing from banks is very important for collecting rice from farmers.

When millers have more capital to buy husked rice … more will be processed in Cambodia for export, without selling out to Vietnam and Thailand.
In fact we do not want to sell husked rice, but due to limited capital we have to sell it all.

Another challenge for rice-market development is that some farmers use seeds that are not popular on overseas markets, so now we are educating farmers to change to types that are appropriate for European markets [in particular] which gain high prices, and produce high yields … up to 5 tonnes per hectare, compared to 2.5 tonnes to 3 tonnes with the current seeds.

You mention capital problems. To what extent have the RDB and private banks helped the sector this year?
With RDB, it has a special arrangement with the government so that interest rates are just 5 percent per annum.

This year, RDB has set aside $18 million to lend to rice millers, an increase of 38 percent on last year.

But thus far the [Rice Millers] association hasn’t accessed it, while interest rates at commercial banks are between 10 and 12 percent per year.

This is an acceptable rate, but in terms of developing Cambodian rice-milling, it would be more helpful if banks lend at 7 percent per year.

With limited capital, how concerned are you that Cambodian millers cannot compete with their counterparts in Thailand and Vietnam, in terms of buying up rice from farmers following the harvest beginning this month?
We cannot compete with them in buying rice from farmers because [millers] buy wet husked rice … because they have drying machines, while Cambodian millers – about 99 percent – have no drying machines or other modern post-harvesting machines.

On the other hand, we do not have much capital to buy all the rice from farmers.

Transportation costs in Cambodia remain high. How can Cambodia compete with its neighbours in terms of shipping exports to Europe?
In terms of transportation, it’s true that costs here are higher than in those countries.

We do not have a railroad, and their transport companies offer cheap fees, so expenses are higher … but we have more favourable conditions since September when Cambodia was given duty-free status on rice exports to European countries.

Therefore, tax exemption on rice will enable Cambodia to compete with Vietnam and Thailand on rice exports to EU countries.

In Europe, a tonne of good quality rice is about $940, and standard quality around $600.

How else will Europe’s decision to eliminate tariffs on Cambodian rice affect the domestic industry?
The tax exemption is a golden opportunity for Cambodia.

Cambodia is thus far not well known for exporting rice, so we will have difficulties, as we have not really exported rice before.

Therefore we do have overseas market partners. They do not know us, but they know Thailand and Vietnam.

However, I am worried that tax exemption will be a chance for neighbouring investors to do business in Cambodia in order to export rice from Cambodia to other countries duty-free.

It’s good for Cambodia if they’re serious, but we are concerned that they would just start companies to get a licence to export rice … then export just a little Cambodian rice and then bring in foreign rice … to use the Cambodian name to export to Europe so as to benefit from tax exemption.
If this were to happen it would kill local rice exporters.

Given the situation now, how do you see the future of the domestic rice industry?
Cambodia will be able to export rice at volumes comparable to neighbouring countries in the near future.

Cambodian rice will become well-known on international markets next year when our mill is in operation.

Companies from Canada, Australia, France, Germany, Japan, the Philippines, Indonesia and Malaysia have visited Cambodia and told me that they need rice from Cambodia.

So far, contracts have not been signed, but when our machinery is in operation, we will invite them to visit our factories, and contracts will be agreed.

Vietnam wins 150,000 ton rice export bid

Vietnam won a Wednesday bid to export 150,000 tons of 25 percent-broken
rice to the Philippines at US$480 a ton, reported the Vietnam Food
Association the same day.

Winner of the remainder of the Philippines' 250,000 ton quota was the
Daewoo Group of South Korea, who contracted to sell 100,000 tons at $468
per ton.

During the first ten months of this year, Vietnam shipped 5,372,000 tons
of rice, valued at $2.2 billion.

The nation signed deals to export over six million tons of rice this year.

In 2008, Vietnam exported 4.65 million tons for $2.6 billion.

Philippines may buy 62,500 tons,more rice after tender

Government has the option to buy another 62,500 tons of rice over the
next six months at prices offered during Wednesday's state tender for
250,000 tons, a government official said yesterday.

"Under the law, we are allowed to re-order 25 percent of the tendered
volume," said Rex Estoperez, spokesman at the National Food Authority.

"The prices are valid for six months and if prices at the tender are
better than market prices six months from now, we can re-order," he said.

Korean trading firm Daewoo International Corp. gave the lowest bid of
$468.50 a ton, cost and freight, to supply 100,000 tons of 25-percent
broken white rice, from Thailand and Vietnam, for arrival between
January and April.

Vinafood 2, Vietnam's largest rice exporter, submitted the second-lowest
offer if $480 a ton, C&F, for 150,000 tons of the same rice grade for
arrival in January.

Coming in third was Toepfer International Asia Pte Ltd which offered to
sell 100,000 tons of rice from multiple origins at $534.99 a ton, C&F.

Vinafood 2 also bid to supply another 100,000 tons -- with delivery
split between February and March -- at $537 per ton, the fourth-lowest
offer.

Estoperez said NFA was "most likely" to award the 250,000 tons supply
deal to Daewoo, at 100,000 tons, and Vinafood 2, at 150,000 tons after
they gave the two lowest bids

Philippines May Buy 25% More Rice in Tender, NFA Says

The Philippines, the world’s biggest rice importer, may buy up to 25 percent more than initially sought in a tender yesterday to meet a shortfall after storms slashed production, an official said.

“If prices are good,” the country’s National Food Authority may order as much as 312,500 metric tons of rice to lock in prices from the winning bidders in the tender, NFA Spokesman Rex Estoperez said today. The tender requested offers for 250,000 tons of 25 percent broken white rice for delivery between January and April.

“It makes sense to reorder,” Estoperez said in a phone interview from Manila.

Rice futures jumped 11 percent in the past eight days in Chicago on concern crop losses from storms in the Philippines and drought in India, the world’s second-biggest grower, will curb global supply and boost demand for imports.

“If the NFA decides to exercise their right to increase their quantity by 25 percent,” it will tighten global supply, Rakesh Singh, a trader at New Delhi-based Emmsons International Ltd., said today. “Definitely that will push up prices. Prices are moving upward at the moment because of the NFA tender and news India will enter the import market.”

Rice for January delivery added 1 cent to $15.23 per 100 pounds at 5:40 p.m. Singapore time. Futures reached a record $25.07 in April 2008 after India and Vietnam curbed rice exports and the Philippines boosted imports, fueling concerns of a rice shortage that sparked food protests around the globe.

India Buying

The State Trading Corp. of India Ltd. is seeking bids from overseas suppliers for about 10,000 metric tons of 25 percent broken rice for delivery by December at a tender on Nov. 9, according to a notice sent to traders on Oct. 30.

That will be the first time India has imported rice since 2005-2006, according to U.S. Department of Agriculture data.

The notice was issued after Farm Secretary T. Nanda Kumar said the country had no plans to import grain. Farm Minister Sharad Pawar said Nov. 4 the South Asian nation has adequate stocks of food grains to meet demand and won’t import.

Daewoo International Ltd. submitted the lowest bid at the Philippine tender yesterday, offering to sell 100,000 tons of rice from either Vietnam or Thailand for at least $468.50 a ton for delivery in January.

State-run Vietnam Southern Food Corp. gave the second- lowest bid at $480 a ton for 150,000 tons for delivery in January, according to the state-run Philippine food agency. The contracts will be awarded to winning suppliers next week, the agency said.

Thai Exports

The export price for Thai 25 percent broken white rice increased 3.1 percent to $429 a ton yesterday, from $416 a week earlier, the Thai Rice Exporters Association said. Thai 100 percent grade-B white rice, the regional benchmark, increased 3 percent to $541 a ton. The price climbed to a record $1,038 a ton in May 2008.

“We want to make sure we will not be late in the market,” Agriculture Secretary Arthur Yap said Oct. 30. Yesterday’s tender, the first for 2010 supplies, was held a month earlier than usual.

Vietnam Southern, known as Vinafood, was seeking to sell 50,000 tons of rice to the Philippines for at least $537 a ton for delivery in February, about 12 percent more than its offer for January delivery.

Other offers ranged from $534.99 a ton to $600 for rice for delivery through April, according to NFA data, a signal exporters may expect supplies to tighten, driving prices higher.

Prices at the tender were “quite good,” said National Food Deputy Administrator Vic Jarina, chairman of the committee tasked to evaluate the bids. Another tender may be held in December if an assessment of the country’s rice supply after the storms shows a need for more imports, he said yesterday.

A notice needs to be issued by next week if the country wants to hold a tender in December, to meet the requirements of the procurement law, Estoperez said today.

Rice Jumps to 10-Month High on Concern India Demand Tops Output

Rice futures in Chicago rose to the highest price in almost 10 months on mounting concern that Indian inventories will trail demand, forcing the world’s second-largest producer to import grain.

Output in India has declined because of adverse weather, and the government plans to buy 26 million metric tons of the grain from farmers this year to bolster domestic stockpiles and avoid food shortages, said Dennis DeLaughter, a rice farmer and the owner of Progressive Farm Marketing in Edna, Texas.

“The government is trying to make sure they don’t have a panic on their hands, so they’re moving rice into the market early to avoid having a run on supplies,” DeLaughter said.

Rice futures for January delivery rose 10.5 cents, or 0.7 percent, to $15.22 per 100 pounds (45 kilograms) on the Chicago Board of Trade. The price earlier reached $15.28, the highest for a most-active contract since Jan. 7. The grain has rallied 17 percent in the past six months.

India may become a net importer for the first time in 21 years in 2010, Samarendu Mohanty, a senior economist at the International Rice Research Institute, said last week. China is the biggest rice producer.

India may buy rice from Vietnam, Thailand

The government may import about 2 million tonnes of rice, including government-to-government deals with Thailand and Vietnam, the Press Trust of India reported on Wednesday, citing unamed official sources.

The government may also give incentives for such imports to be spread over one year, said the report, which was published in Business Standard newspaper.

A ministerial panel, headed by Finance Minister Pranab Mukherjee, would make a decision on various proposals for rice imports on November 12, it said.

The worst monsoon in 37 years has shrunk the summer-sown rice output, raising prospects of higher food prices and further dependence on imports for the main food crop.

To help cover a fall of about 15 million tonnes in the summer-sown rice crop, the federal government last month allowed tax-free imports. As well, three state-owned firms have been asked to import 30,000 tonnes of rice by mid-December.

Philippines gets ‘good’ prices at key rice tender

DESPITE IMPOSING difficult terms, the Philippines on Wednesday received 10 bids for its rice auction of 250,000 metric tons.

The world's largest importer got a total 800,000 tons offered for delivery between January and April 2010.

The price ranged from $468.5 to $600 a ton, including cost and freight.

Daewoo International Ltd. gave the lowest range of $468.5 to $478.50 a ton for 100,000 tons of rice.

VINAFood Corp. of Vietnam came in second with an offer of $480 to $487 for 150,000 tons of rice.

Fourteen companies bought bid documents but only 10 submitted proposals, of which only six passed the eligibility and technical screenings.

Besides Daewoo and VINAFood, other bids opened were from Thai Hua Co. Ltd. of Thailand, LG International, Toepfer International Asia Pte Ltd. of Singapore, and Asia Golden Rice of Thailand.

SIAM Indica Co. Ltd., Capital Cereals Co. of Thailand, and Seacor Commodity Trading

LLC were disqualified for various reasons.

NFA was looking to buy 250,000 tons of well milled rice, 25 percent brokens, at the tender.

The auction was held to secure stocks for the first quarter of 2010, when the effects of crop damage due to typhoons will be felt.

However, Ludovico Jarina, deputy administrator of the National Food Authority (NFA), declined to declare the two bids as winners, saying a formal announcement will have to be made following further review of bids.

Jarina said that the prices at the tender were "good" and hopefully will hold until the end of this year.

Prices next year were unpredictable, he said, given that India had already announced a tender for 30,000 metric tons.

Given this scenario, Jarina said another tender was "possible" if recommended by the interagency committee on rice and corn, which decides NFA imports.

He said there was enough time for another tender within the year if the committee comes up with such a recommendation within the month.

Traders, both participating and observing the tender, said the NFA imposed difficult terms, requiring a minimum volume of 100,000 metric tons, bond equivalent to 10 percent of the awarded value, and 270 days credit from receipt by NFA of a complete set of original documents required for payment.

Jarina said the bidding actually had good results because many bidders qualified despite stricter terms imposed under new implementing rules according to the procurement law.

The Philippines is seen to import about two million tons of rice, with some traders saying this could go up to 3 million considering crop losses due to typhoons and heightened demand in the run-up to elections in 2010.

The country imported about 2.4 million tons of rice in 2008 and this year, and has so far imported 1.775 million tons of rice so far this year, including 200,000 tons allocated to private firms.

Philippines rice tender

The Philippines, the world’s biggest rice importer, got offers to supply the country with 800,000 metric tons of rice at a National Food Authority tender for 250,000 tons in Manila today.

The NFA received offers priced from $468.50 to $600 per ton in the tender, which was held a month ahead of the typical date and calls for delivery between January and April. That compares with $525 a ton for 100 percent grade-B Thai white rice, the regional export benchmark price.

The Philippines is accelerating imports for next year on concern that domestic crop losses and a production shortfall in drought-hit India may cause prices to surge, Jessup Navarro, the NFA’s administrator, said Oct. 26. The Philippines lost about 1 million tons of rice from Tropical Storm Ketsana and Typhoon Parma, which struck the country in September and October.

Rice for January delivery in Chicago jumped 11 percent in the past seven days and last traded 0.5 percent higher at $15.19 per 100 pounds as of 5:10 p.m. in Singapore. Futures reached a record $25.07 in April 2008 as a surge in food prices sparked protests around the globe.

The prices offered at today’s tender were “quite good,” Vic Jarina, deputy administrator of the NFA, said in an interview, adding that the supply contracts will be awarded next week. Another tender could be held in December if an assessment of the country’s rice supply outlook following the storms, scheduled to be completed this month, shows the need for more imports, he said.

Higher Stockpiles

The Philippines may import as much as 2 million tons next year, up from 1.78 million tons this year, Agriculture Secretary Arthur Yap said Oct. 25. The NFA bought 75,000 tons from Pakistan and Thailand at $472.72 to $487 a ton in July.

The country’s rice stockpiles stood at 2.4 million tons at the end of October, up 8.8 percent from a year earlier, the NFA said in a report today. The stocks are enough for 68 days of supplies, the authority said.

India will buy 30,000 tons of rice this month, a government official said Oct. 30. This will be the country’s first rice imports since 2005-2006, according to U.S. Department of Agriculture data.

The South Asian nation may buy an extra 250,000 tons later in November, Rakesh Singh, a trader at New Delhi-based Emmsons International Ltd. who correctly predicted last week that India would return to the import market, said yesterday.

India may buy as much as 3 million tons next year and become a net importer for the first time in 21 years, Samarendu Mohanty, a senior economist at the International Rice Research Institute, said Oct. 28.

Still, Farm Minister Sharad Pawar said today that India has adequate stocks of foodgrains and the government isn’t planning to import.