Vietnam rice price update

Rice price offers were unchanged last week because exporters were trying to keep the prices from declining. Buyers, however, were still waiting for lower prices resulting from the bumper harvest of the Spring crop in the Mekong River Delta. Trade activities, therefore, were almost nonexistent last week. Paddy prices were unchanged last week. According to rice exporters, the prices staying steady during the recently completed peak harvest time is due to the Vietnamese government's rice purchase program, which started in early March 2010.

Bangladesh approves white rice imports at $388.92/T

Singapore-based Indo-Sino and local Tanvir Enterprise have won a Bangladesh tender to buy 50,000 tonnes of white rice at $388.92 per tonne, cost and freight, a official said on Sunday. The country's state grain buyer in February issued the tender to import white rice from any origin that closed on March 7, as part of an effort to hold down domestic prices. Indo-Sino, which made the lowest offer at $388.92 in the tender, would supply 35,000 tonnes of white rice while second-lowest bidder Tanvir Enterprise would supply the rest 15,000 tonnes at the same rate, the food official said. "The cabinet purchase committee approved the proposal at a meeting on Sunday, and will soon sign contracts with the companies. Shipment must take place within 60 days after the signing," he said. Indo-Sino also made the lowest offer at $492 a tonne, c&f, in another tender to buy 50,000 tonnes of parboiled rice, that closed on March 22. Bangladesh, the world's fourth biggest rice producer, plans to import 300,000 tonnes of rice in the current fiscal year through June. Market sources said it could be part of a government move to build food reserves after it failed to procure enough rice locally. The government is also buying 750,000 tonnes of wheat by June. The south Asian country produces around 30 million tonnes of rice, normally enough to feed its population of 150 million, but often requires imports to cope with shortages due to natural calamities such as floods and droughts. Bangladesh had to import rice worth $800 million in 2008. Rice prices have risen over the past few months despite a good crop and healthy levels of stocks. In January, the government extended a ban on rice exports until June to contain price increases. Bangladesh usually exports a small quantity of aromatic rice. At that time, the government also started open market sales of rice in the capital and adjoining districts to tame food inflation, which shot up 10.56 percent in January from a year earlier after a rise of 9.50 percent in December.

Rice prices set to ease on record rabi output

India, the second largest producer of rice, accounts for 19.70 per cent of global production. Wi­thin India, rice occupies one-quarter of the total cultivated area and accounts for about 40 to 43 per cent of total foodgrain production. The average retail price of rice h­a­s shot up by around 48 per cent in the past two years to Rs 1,942 per q­u­­in­tal. In the south, it has surged by ap­­­p­­roximately 60 per cent over the sa­­me period. Ashish Kapur, chief ex­ec­utive officer of Invest Shoppe, says altho­u­g­h rice prices have witnessed strong growth in the recent past, one ca­n expect prices to ease in the near term on the back of record rabi crop production. Earlier, rice production had slu­mped around 10 million ton­nes in the kharif season as drought plagued over one-third of the country, prompting the government to bo­ost the public di­stribution system a­n­d intervene in the market to check the price rise. The go­vernment also said that if required, it would undertake an open-market intervention, w­­h­­ich means that the government m­­­­ay buy more to build adequate res­erves and strengthen the public distribution system for any contingencies. According to latest estimates, India is the world’s fifth largest rice exporter. The country is likely to ex­p­ort 20 lakh tonnes of rice in 2009-2010, which is the same as last year. Th­ailand, which is world’s lar­gest rice ex­porter, acc­ounts for aro­und 85-100 l­akh tonnes of shipme­nts per year, followed by Vi­etnam (55 lakh tonnes), the US (31.50 lakh to­n­­nes) and Pa­kistan (around 38 lakh tonnes). Since the beginning of the year, the price of rice has plunged more than 19 per cent on the Chicago Board of Tra­de (CBOT). Anand James, chief analyst, Geojit Comtrade, said, “The US dep­artme­nt of agriculture’s forecast for incr­eased 2010 plantings is seen as one of the reasons for the steep fall in ri­ce prices in CBOT since January. Ho­w­ever, prices have already been under pressure for some time also due to the rise in supply from the world’s top two exporters — Thailand and Vietnam. Thailand is about to har­vest the se­c­ond crop, which, as per Thailand’s agriculture ministry, cou­ld produce roughly 7 million tonnes.” Expectations of a further rise in supply has brought prices of Th­a­ila­nd’s B-grade white rice to as low as $510, a drastic fall when compa­red with the record of $1,080 per tonne quoted in April 2008. Recently, prices have found some respite from sharp falls due to stockpiling by the governments of Thailand and Vietnam. Short covering in CBOT was also seen in the past few sessions as margins were eased on rice futures, am­o­­ng some other commodities. Rice procurement by the Indian go­v­ernment has crossed 25 million to­n­­nes in the ongoing 2009-10 kh­arif marketing season, nearly 2.9 mi­llion tonnes short of target. According to official data, total rice purchased by the Food Cor­poration of India (FCI) and state ag­encies stood at 25.13 million tonnes so far this season, against 25.57 million tonnes in the previous season. The world’s total trade in rice is estimated aro­und 30,845,000 tonnes for 2009-10, wh­ich is 7 per cent higher than last ye­ar’s 29,029,000 tonnes. The ban on exports of non-basmati rice may continue indefinitely and sc­rap duty on imports will enc­ourage pr­ivate imports of the grain. The area planted with rice in the South Asian nation this year is 7 million hectares, less th­­an a year earlier, and may lead to a drop of 16 to 18 million tonnes of mo­nsoon-sown rice output. Rice ranks as the third principal st­aple food in the world after wheat and maize. The country’s rice demand is projected at 128 million tonnes by 20­12, which requires a production level of 3,000 kg per hectares, much higher than the present average of 1,930 kg per hectares. So, in the medium to long run, we ma­y face a demand and supply mismatch that continues to support prices at lo­wer levels. CBOT benchmark May rice contract continued to fall from a high of $16.45 per hundred pounds on Dec­ember 14, 2009 to a low of $12.12 on Ma­rch 31, 2010. “This pressure is seen amid te­c­h­nical selling and the US departm­ent of agriculture’s fore­cast for inc­reased 2010 plantings in Am­erica. St­r­ong support was seen at $11.90 and $11.20. May futures are likely to rem­ain under pressure as long as resistan­ce is seen at $12.90,” Vibhu Ratand­hara, assistant vice-president at Bon­anza Commodity, said. At present, rice futures are not tr­a­ded on any of the Indian commodity exchanges.

Argentina rice report

Post forecasts MY 2010/11 milled rice production at 930,000 MT on 230,000 hectares. The Argentine rice sector is expected to increase slightly its planted area due to good international prices, increased export demand, and fewer marketing restrictions than in the other grains. Post estimates MY 2009/10 rice production at 910,000 MT on 220,000 hectares. Post forecasts domestic rice consumption for MY 2010/11 to remain at similar levels as the previous year at 320,000 MT. Rice is not a staple product for the Argentine consumer and is not an important part of the Argentine diet. Per capita rice consumption in Argentina is very stable at approximately 7 -8 kilos (rough basis). Post forecasts a slight increase in MY 2010/11 total rice exports to 610,000 MT due to high prices, and strong export demand from Brazil, Venezuela, and other markets, as well as a small increase in production.

Thailand hopes to end rice price war

The Commerce Ministry has been ordered to send negotiators to Vietnam to initiate discussions on ending the rice price-war between the two countries, Deputy Prime Minister for economic affairs Trairong Suwankiri said on Friday. “The discussions will aim at organising bilateral talks between Prime Minister Abhisit Vejjajiva and the leader of Vietnam during the Asean summit in Hanoi from April 7 to 9,” Mr Trairong said. He admitted Thailand and Vietnam were competing for market share and offering rice for sale at lower prices. Bilateral talks on the problem would help end the price war, improve cooperation and boost rice prices, he added.

Domestic, export rice prices fall

Domestic and export rice prices have fallen due to increased supply in the market, particularly from Vietnam. Chutima Bunyapraphasara, director-general of the Internal Trade Department, yesterday said domestic prices had gradually dropped by Bt300-Bt1,000 a tonne in March compared with February, due to lower demand. Vietnam, which is Thailand's major export competitor, has had higher production at 8 million-9 million tonnes during its winter-spring crop, while many importing countries are still delaying placing orders, she said. The Thai domestic price of jasmine rice was quoted at Bt13,500-Bt14,300 a tonne yesterday, down from Bt14,600 in February. Paddy white rice was traded at Bt8,500-Bt9,200 a tonne, against Bt9,565, due to high supply from second-crop production of 8.38 million tonnes. According to the Thai Rice Exporters Association, the price of jasmine rice is unchanged from last week, but the prices of other types of rice have dropped significantly. As of yesterday, jasmine rice was quoted at $998 a tonne and Pathum rice at $739 - down from $772 on March 24. Five-per-cent white rice was quoted at $486 a tonne, down from $502. In a bid to increase domestic prices, the Commerce Ministry has opened more points for direct purchases at reference prices from farmers. The ministry currently has 83 purchase points in 22 provinces.

Philippines paddy rice procurement slides due to El Niño

The government’s palay (unhusked rice) procurement as of the third week of March slid by almost a fifth from a year earlier amid an El Niño-induced drought. In a statement, the Agriculture department said the National Food Authority (NFA) bought 962,655 bags of palay — 489,114 bags in January, 339,543 bags in February and 133,998 bags by the third week of March. It is targeting to buy 696,900 bags this April, the peak of the summer harvest. NFA Administrator Jessup P. Navarro noted that with tight rice supply, its active buying had pushed competition among traders, benefiting farmers. The farm level price of paddy rice averages P16.82 per kilo — 75 centavos higher than a year earlier — or P37.50 per cavan of 50 kilograms. The NFA buys clean and dry paddy rice at P17.70 per kilo, inclusive of drying, transport and cooperative development incentives. These incentives bring the agency’s effective palay buying price to P885 per cavan. Navarro noted that aside from higher prices, farmers also can either immediately sell their produce or wait for the price to appreciate further. Farmers who planted their crop early were also spared from the ill effects of El Niño, producing clean and dry palay that they can sell higher with minimal expenses. The NFA is buying at a daily average rate of 8,960 bags. Southern Tagalog posted the highest volume of paddy rice bought with 458,570 bags, most of these coming from Occidental Mindoro totaling 223,270 bags. Procurement was also high in the Ilocos region at 167,893bags, mostly from La Union and Western Pangasinan. The Bicol region also posted high procurement volume at 151,133 bags mostly bought from Camarines Sur. The NFA bought 53,370 bags from Central Mindanao farmers, more than half of which came from Sultan Kudarat. The NFA is aiming to buy 11.7 million bags of palay this year.

Vietnam association stockpiles one million tonnes of rice

VVietnam Food Association (VFA) businesses have purchased one million tonnes of rice to be kept in reserve, said Pham Van Bay, VFA Vice Chairman. The association is planning to buy another half a million tonnes of rice in the second phase. In early March, the VFA asked 30 of its member businesses to buy one million tonnes of rice for the same purpose, with prices no less than VND4000 per kg at the factory. Rice businesses in the Mekong Delta said that rice prices in the region are declining slightly by VND100 per kg to VND4,100-4,400 per kg. Businesses have exported about 1.1 million tonnes of rice so far. The VFA added that Iraq is likely to sign a new contract to import rice from Vietnam while rice prices on the African market have shown signs of increasing.

Thailand Commerce minister plans to increase paddy price

The Commerce Ministry will propose increasing the buying price of paddy by 200 baht a tonne to shore-up grain prices and support farmers, Commerce Minister Porntiva Nakasai says. The ministry wants to increase the purchasing price of white-rice paddy with 15% moisture to 9,233 baht a tonne as a supplementary measure. Its previous initiative - buying 20,000 tonnes of the grain from farmers at market prices - has failed to increase the price of paddy. The ministry will also seek cabinet approval to establish an exchange where farmers can swap their new-crop paddy for rice from the government's stock pile which they can then sell in the domestic market. Mrs Porntiva said the exchange ratio would have to be determined carefully so the government's rice stock would be worth more than the paddy to prevent criticism that the scheme favoured millers or rice packers over farmers. The ministry will first discuss the matter with Prime Minister Abhisit Vejjajiva before submitting the two measure for cabinet approval. "We want to informally discuss the matter with the prime minister before submitting a formal proposal based on information gathered from various parties in the rice industry," she said. "We need to move quickly because the low paddy price may lead to protests from farmers. We may be blamed for only solving political problems rather than finding solutions for farmers." Mr Abhisit earlier rejected the idea of buying paddy at higher-than-market prices because the policy contradicted the current rice-option plan. Under the option plan, farmers are compensated for the difference between guaranteed rice prices and benchmark prices. If the benchmark price is lower than the guaranteed price, the ministry will compensate farmers the difference. The ministry will this week begin selling rice through government-to-government deals starting with Malaysia. The neighbouring country used to buy up to 500,000 tonnes of Thai rice a year, but that has fallen to 100,000 tonnes as it purchases cheaper grains from sources such as Vietnam. "At the moment, the ministry will release the government's rice stock only through government-to-government deals," Mrs Porntiva said. The ministry plans to sell to at least one million tonnes of rice from its 5-million-tonne stockpile through deals with more than 10 governments, such as Bangladesh, Indonesia, Singapore, Iran, United Arab Emirates, Libya, Ghana, India, Untied States, Australia and South Africa. Cabinet approval will also be sought for the signing of a memorandum of understanding with the Philippines which agreed to waive import duty on 367,000 tonnes of Thai rice as compensation for its failure to comply with tariff reductions under the Asean Free Trade Area agreement.

Thailand yearly rice report

MY2009/10 rice production will increase to 30.8 million metric tons (MMT) of paddy, a 2.2 % increase from the previous year. So far, the off-season crop cultivation is expected to be 12.6 million rai (2.01 million hectares), up 1.4 percent from the previous year and far above the official target of 9.5 million rai (1.52 million hectares) due to attractive farm-gate prices. Off-season planted areas in the northeast more than doubled, particularly in the non-irrigated areas. The harvest started in early March 2010 with good yields. So far, total damage areas from drought are marginal at 3,431 rai (550 hectares) and damage from plant brown hopper is highly localized in some northern and central provinces at 30,000 – 40,000 rai (4,800 – 6,400 hectare). Meanwhile, farmers in the central plain have begun third crop cultivation, regardless of official warnings on limited water availability from major reservoirs. In view of this development, the off-season crop production has been revised downward to 1-2 percent, as damage to the third crop cultivation is expected to affect 10 percent of the crop (TH0052, “Dry Conditions Having Slight Impact on Off-season Rice,” 3/18/2010). MY2010/11 rice production will continue to increase slightly as cultivated areas will increase 1 percent to 1,103,000 ha. A new irrigation project, Khawe Noi Dam project, will be operating at full capacity at 800 – 1,100 million cubic meters. The project will benefit Phitsanulok Province in the lower north of Thailand and should increase irrigated areas by 155,000 rai (24,800 hectares) for off-season crops. The dam will also protect 75,000 rai (12,000 hectares) of main-crop paddy from flooding damage. As well, approximately 250,000 rai (40,000 hectares) in the central plain will benefit from additional water availability in the off-season. Currently, Khwae Noi Dam is operating at half its capacity but providing critical water needs to the central plain as water output from Bhumibol and Sirikit dams has significantly decreased. Average yield is expected to increase slightly to 2.78 mt/ha as favorable weather conditions will prevail due to the weakening El Nino phenomenon by June of 2010. Also, the Thai Meteorological Department forecasted normal average rain fall for May 2010, the beginning of the rainy season, which should provide 150-200 millimeters of precipitation for the north and northeast, major growing areas of the main crop season. Most rain-fed main-crop cultivation will begin in June – July, accounting for 60-70 percent of total main-crop cultivation. 1.2 Consumption Rice is the main staple food for Thais and for MY2010/11 rice consumption is forecast to increase slightly in line with economic recovery. Per capita consumption is expected to be 100 – 110 kilograms. In addition, industrial use will increase for both rice-based products for human food and animal feed. Demand for broken rice in animal feed, which hovers at 1.0 million tons, is expected to increase by 3 percent or 30,000 tons as more of it will be used to substitute corn as corn production is likely to decline. 1.3 Trade Annual rice exports are forecast at 9 - 10 million tons for MY2009/10 and MY2010/11 in anticipation of a larger crop harvest and high carry-over stocks from the government and private sectors. Parboiled rice and fragrant rice exports will continue to dominate the export market, accounting for 70 percent of total rice exports. Meanwhile, white rice exports are losing competitiveness to Vietnamese white rice. Presently, Thai white rice prices are over $100/MT higher than Vietnamese rice, as the government has been able to sustain high prices through stock interventions. In addition, millers/traders and exporters are also holding back stocks bought at record prices in November of 2009 as speculation abounded of India’s possible rice needs, as such they are waiting for prices to recoup. 1.4 Stocks MY 2009/10 and MY2010/11 rice stocks will likely remain high between 6 - 7 million tons despite the shift from the long-standing mortgage scheme to the price insurance scheme (TH9161, “Price Insurance Starts to Replace Mortgage Scheme”, Oct. 29, 2009). However, the government allowed for a direct purchase program as a measure to stabilize domestic prices in tandem with the price insurance scheme for MY2009/10 main crop and off-season crop. The government’s decision to release the old-crop rice intervention stock and paddy intervention stock is on hold due to concerns over low domestic prices. 1.5 Policy The government replaced the mortgage scheme by the price insurance scheme for MY2009/10 main crop and sustained it for the second crop despite objections from millers and some political operatives who benefited from the previous scheme (TH9161, “Price Insurance Starts to Replace Mortgage Scheme”, Oct. 29, 2009). The new price insurance scheme for MY2009/10 main crop reduced the government’s budget by more than half that was allocated during the same period for MY2008/09 of 67.1 billion baht ($2.1 billion). However, in a measure to stabilize prices, the Government authorized an allowable direct purchase program of 4.0 million tons of paddy for MY2009/2010 (TH0047, “Weekly Rice Price Update,” 3/2/2010). The program purchased 700 tons of white rice paddy during the main crop season as prices remained high, but has recently started purchasing second season crop paddy as prices have been facing a downward trend. To carry out this purchase, the government has provided a credit line of 20 billion baht ($615 million) through the Bank for Agriculture and Agricultural Cooperative (BAAC) to buy paddy at the benchmark prices, which are presently far below the insurance prices (Figure 2). The government has just changed its calculation of benchmark prices from a bi-weekly average to a weekly average in order to capture price swings on a timelier basis (TH0051, “Weekly Rice Price Update,” 3/8/2010). Under the program, farmers selling at benchmark prices will receive a compensation based on the difference between insurance prices and benchmark prices.

Egypt yearly report

Rice is a major summer crop in Egypt, occupying 10 percent of Egypt’s total crop area. The entire rice crop is irrigated. Rice requires a special irrigation regime and its cultivation is largely restricted to the northern part of the Delta. It is often planted on low quality land where the soil is fairly saline and has varying degrees of productivity. A limited amount of rice is also grown in the middle Delta and in Upper Egypt. Farmers normally exceed the area targeted by the government for rice cultivation despite the prospect of fines (LE 600/ feddan) for those who violate their targeted areas. This is due to the much higher profitability of rice cultivation compared to other traditional summer crops (i.e. corn and cotton) and the higher potent for exporting the crop. The government is trying to restrict the area of rice and increase the area of corn to save water. Consumption: Egypt consumes medium grain rice and rice consumption is relatively constant, as consumers continue to prefer wheat-based products. Rice stocks in MY 2009/10 are declining due to the noticeable decrease in production compared to MY 2008/09. There is no stock-holding policy, with levels reflecting pipeline supplies. Buyers tend to avoid holding stocks and push them to the export market. Trade: Egypt is a net rice exporter. Exports in MY 2009/10 should recover slightly and reach 485 TMT. The government objective is to export between 500-600 TMT in 2009/10. The total quantity of rice exported through the end of February 2010 was 230 TMT. The leading import markets are: Syria (26%), Turkey (13%), Belgium (8%), Jordan (8%), Saudi Arabia (6%), and Sudan (5%). However, in MY 2010/2011, exports are forecast to decline even further as a result of government restrictions on the area cultivated with rice and the increase in local consumption. During MY 2008/09 rice exports were 452 TMT, much lower than previous years. On February 4, 2009, the Minister of Trade and Industry issued a decree which removed the ban on rice exports as of February 21, 2009. This decree (no.105) permits Egyptian rice to be exported provided that the exporter delivers through a tender an amount equal to the exported amount to the Government of Egypt and pays the government LE 1,000 per MT in export taxes. In the past, there were government to government deals with Jordan, Syria, and Sudan, but since the government set a system of tying the rice exports to the new tender system, only a shipment of 20 TMT was exported to Turkey through the Turkish Grain Board (TMO) to stabilize the prices there. There was an attempt to conclude a deal with the Syrian government but it stopped when this new system was introduced and because of the political tension between the two countries. Puerto Rico has imported 38 TMT of rice from Egypt in June 2009. Most of the EU (mainly Belgium) imports broken rice from Egypt. Small quantities of high quality name-brand rice are imported by up-scale supermarkets in Europe. Policy The removal of the export ban occurred much earlier than expected. The ban, which began on April 1, 2008 ended in Feb 2009. At the time the ban was implemented, rough rice prices had reached about $430 per ton, compared to about $200 at the beginning of the export season in October 2007. Similarly, export prices for milled rice jumped from $450/ton to $750/ton and by the end of 2009 it was about $ 680/ton. The decision to suspend exports had an immediate impact on prices, with rough rice prices dropping almost $100 per ton to $330 on the local market. This ban forced many countries in the region to source rice from other countries, including the United States. The government-owned rice mills are protesting the export quota auction scheme because they fear that they will lose money if they successfully bid on the export quota, but don't have an export contract locked in. At the same time, if they have an export contract but cannot obtain the export quota they will be in default to the importer or forced to buy the export quota at a premium from a successful bidder. The private trade is better able to operate in this environment and does not have any problems with the export quota auction except that Ministry of Trade and Industry may not reveal the quantity of quota available or the minimum bid. The quota ranges from LE 600 to LE750/ton. There has been some contraband exporting of rice as salt or broken rice, especially to Lebanon. According to the exporters, in order for the Egyptian government to maintain enough quantities for local consumption and, at the same time, reduce the area cultivated with rice, the government is planning to tighten the export restrictions and limit the export licenses issued. Export Trade Matrix Rice, Milled Year 2008/09 Exports to: U.S. 130 Syria 136,415 Libya 24,312 Turkey 59,630 Belgium 35,456 Saudi-Arabia 25,216 Sudan 27,450 Jordan 39,612 Ukraine 11,435 Puerto Rico 38,000 Lebanon 10,654

South Korea needs to reduce rice subsidies, farming minister says

South Korea needs to reduce subsidies for rice farmers in the face of growing stocks of unsold rice, the country's agriculture minister said Monday. "We no longer see rice farmers as a baby to nurse," Chang Tae Pyong, minister for food, agriculture, forestry and fisheries, was quoted as saying by Maekyung business newspaper. "If we discover a better way of spending public money, we should consider a way to drastically reduce rice subsidies." The government has shielded rice farmers from international competition by spending 116 trillion won (102 billion dollars) in subsidized loans to rice farmers over the past 17 years, according to farming experts. Seoul fixes a floor price for rice, at which the government buys rice from farmers, which discourages farmers from diversifying. The minister's remarks came as analysts point out that despite the country sitting on an extra rice stock of about 1 million tons, at least 70 per cent of South Korean farmers spend their whole lifeproducing rice. Attempts by distributors to export surplus rice to South-East Asian countries are held back. "It is almost impossible to export because of the subsidy-caused overblown rice price," a distributor said. Despite the extra rice stock, South Korea must import a certain quota of rice under the Minimum Market Access obligations that Seoul adopted at the Uruguay Round of multilateral trade talks.

Price of rice rises in south China

The price of rice in most shops in this Guangdong provincial capital have increased 10 percent in the past month due to the severe drought in southwestern China. Huang Weijuan, a Guangzhou housewife, said she spent 55 yuan ($8) to buy a bag of rice in Taojin agricultural bazaar in the city's Yuexiu district over the weekend. "But the price for the same bag of rice, which weighs 20 kg, was about 50 yuan a month ago," Huang said. And the price of courgette, a vegetable which mainly grows in Yunnan province, is now selling at 5 yuan per kg in the bazaar, up 0.5 yuan from last month, Huang said. "The price of many foods and vegetables have gone up in the past month and I worry that prices will keep increasing," she said. "I've heard in the media that the drought in southwestern China will not ease up until May," she said. According to a report from Guangzhou-based Yangcheng Evening News, some traders have been investigated for trying to corner the market for rice and Chinese herbs in case of a future price hike in Guangzhou. And relevant departments have promised to launch an investigation and punish those who illegally raise prices. A grocery boss who only gave his family name as Mo said he had to raise the price of rice because his costs have grown in the past month. Zeng Xingfu, deputy director of the price supervision center under the Guangdong provincial bureau of prices, however, refuted the drought in southwestern China had led to the price hike for rice, vegetables and other foods in the southern province. "Southwestern China, including Yunnan and Guizhou provinces that have been hardest hit by the drought, is not a major grain production base in the country, and the provinces in southwestern China are not the major source regions for Guangdong's grains," Zeng said. He said Guangdong mainly purchases grains from bordering Hunan and Jiangxi provinces. "The drought in southwestern China will not result in the fluctuation of grain prices in the whole country as China achieved bumper grain harvests six years running up to the end of 2009," he added. Affected by the severe drought, the prices of tea, fresh flowers and some Chinese herbs that are mainly produced in southwestern China have witnessed big increases in Guangdong in the past month.

Economists Expect Indonesian Rice Harvest to Temper Inflation in March

Analysts expect annual inflation to ease to a range of 3.34 percent to 3.55 percent in March, from 3.81 percent in February, due to the rice harvest helping to stabilize food prices. Purbaya Yudhi Sadewa, chief economist at the state-run Danareksa Research Institute, predicted annual inflation of 3.46 percent in March, falling 0.12 of a percentage point month-on-month. “The price of rice and other staple foods are decreasing this month because March is the harvest season so we traditionally see deflation around this time,” Purbaya said. The price of rice has dropped in the past month, from Rp 6,300 per kilogram on March 1 to Rp 6,100 per kilogram on Thursday, Bloomberg reported. “Government reports suggest that rice prices have declined as the harvesting period approaches,” Helmi Arman and Anton Gunawan, economists at PT Bank Danamon, said in a research note. “International sugar prices also dropped by close to 20 percent month-on-month amid increased global production. This was probably followed to some extent by domestic sugar prices.” Bank Danamon said year-on-year inflation may decline to 3.34 percent, down 0.24 of a percentage point month-on-month. Eric Alexander Sugandi, an economist at Standard Chartered Bank Indonesia, forecast March inflation would be 3.5 percent year-on-year. “In addition, the rupiah’s appreciation helped contain imported inflation,” he said. Month-on-month inflation eased to 0.3 percent in February, down from 0.84 percent in January, bringing year-to-date inflation to 1.14 percent. Bank Indonesia has predicted relatively restrained inflation of 4 percent to 6 percent this year and has held its benchmark interest rate steady at 6.5 percent since last August. “With inflation like this, the central bank will not increase its interest rate soon,” Purbaya said. Eric also said he expected the central bank to keep rates on hold. “Inflation remains manageable in the short term and the current BI rate level is still supportive of the rupiah and GDP growth,” he said. The government has forecast full-year 2010 inflation of 5.7 percent. Finance Minister Sri Mulyani has also predicted that the harvest would lower prices.

Vietnam rice price update

The Vietnam Food Association (VFA) lowered their Minimum Export Price (MEP) to $400 per ton FOB basis for 5 percent broken rice last week. Rice price offers, however, were almost unchanged against the previous MEP, because exporters expect increased demand from the Middle East and African countries. These countries, however, are still waiting for export prices to decrease. Paddy prices were increasing at the end of last week, after the VFA announced another rice purchase program of 500,000 tons, following the first one million tons of rice purchased under the government’s program in early March, to stabilize local paddy prices.

Thailand weekly update

Export prices increased by 1-3 percent due to the strengthening Thai baht to 32.15 baht/$. In addition, domestic prices will likely bottom out as the Government is aggressively implementing the direct purchase program to shore up domestic prices. The weekly benchmark prices for March 22-28 were 1 percent higher than the previous week.

Baitang in rice export deal with Italian firm

BAITANG Kampuchea Plc has signed an agreement to sell 562 tonnes of rice worth nearly US$500,000 to Italy-based PHAM Distribution SAL. “Under this agreement, we hope that the company will gain more experience in supplying rice to foreign partners,” Ny Lyheng, deputy director general of Baitang Kampuchea, told the Post Monday. According to the agreement, signed by senior representatives on both sides Friday, Baitang Kampuchea will start supplying rice in mid-April at $880 per tonne. Un Buntha, deputy director general of the Domestic Trade Department, said Monday that domestic companies have been selling rice at scales too small for the international market, though that may be changing. “I think that these Cambodian companies will be able to export tens of thousands of tonnes of rice from next year because they have been preparing production lines for many years in an attempt to support large-scale export,” he said. Ny Lyheng said his company can only export a small amount because Cambodian rice isn’t well-known internationally. “We hope that the company will be able to find buyers who can buy rice in larger amounts soon,” he said. Companies from Australia and France are considering importing rice from Cambodia, but they have not yet reached any formal agreements, he added. Baitang Kampuchea signed deals in January with 350 local rice mills from 10 rice-producing provinces to band together and export rice in large quantities. Cambodia’s rice surplus for export is estimated at 3 million tonnes per year, worth about $13 million, with Europe the biggest buyer in recent years.

No room for rice shortage, assures NFA

The National Food Authority (NFA) in Bukidnon today assures the public that there is no rice shortage in the market contrary to the rumored crunch of the staple food mainly due to the El Niño phenomenon. NFA Provincial Manager Victoria Duray said there is no room for rice shortage because as of today, almost 177,000 bags of rice are available in NFA warehouses. Based on the data released by the National Statistics Office (NSO), Bukidnon has a monthly rice consumption of about 155,000 bags. "That volume of NFA rice reserve therefore is more than enough to meet the need of the province in a month," Duray said. NFA Bukidnon Informarion Officer Maria Socorro Mellomida said the province now has 189 'Tindahan Natin' outlets and 111 'Bigasan ng Bayan' outlets. "The NFA rice is sold at P18.25 in 'Tindahan Natin' and P25 a kilo in 'Bigasan ng Bayan' outlets. These accredited NFA rice outlets are spread all over the province but as to the Tindahan Natin, it's the Department of Social Welfare and Development (DSWD) that decides where to put them since it is directed to address areas with high poverty rates," Mellomida said. At present, market retail price of premium well-milled rice is P36.50 a kilo while the cheapest varieties range from P29-P33 per kilogram, according to the data from the Bureau of Agricultural Statistics (BAS)

Vietnam 2010 rice output to edge up, Q1 exports plunge

Vietnam's main rice crop could be slightly higher this year, according to a government report, but official figures showed that exports dropped by nearly a third in the first quarter on thin demand. Ample supplies were arriving from the main winter-spring rice crop in the Mekong Delta but foreign buyers were scarce, which suggested prices would fall further in the early part of the second quarter. Vietnam is the world's second-largest grain exporter after Thailand. Paddy rice output from the Mekong Delta winter-spring crop, the country's main source of grain for export, could edge up 1.2 percent this year from 2009 to 9.9 million tonnes, a government report said on Friday. But rice exports in the first three months of this year dropped an estimated 30.7 percent from a year earlier to an estimated 1.23 million tonnes, the government said. Rice prices in top exporting countries Thailand and Vietnam may fall more as the Philippines may not tender for new supplies until after national polls in May, sources said last Friday. Reflecting those lower domestic prices, the Vietnam Food Association cut the floor on rice export prices this week to $400 a tonne for the 5 percent broken grain. The Planning and Investment Ministry's preliminary report, obtained by Reuters, on the crop in southern Vietnam said output would rise as the yield increased slightly to 6.38 tonnes per hectare from 6.36 tonnes last year. "The weather for the Mekong Delta's winter-spring crop has been relatively favourable for rice plants' growth," the report said. The Mekong Delta produces 54 percent of Vietnam's paddy output but supplies 90 percent of exportable grain for the world's second-largest rice exporter. The ministry report played down the impact of a serious drought in the southern region but said "some localities in the region had lower yields due to the intrusion of salt water". The winter-spring rice harvest in the Delta is expected to end in the middle of April as usual. Low import demand, especially from the top buyer, the Philippines, could hurt prices. Paddy prices in the Delta eased to 3,800-4,400 dong (19.9-23.1 U.S. cents) per kg this week from 3,900-4,400 dong last week, although a plan to expand a stockpiling scheme by half to 1.5 million tonnes has kept prices from falling significantly.

Vietnam nears rice stockpile goal, expands target

The Vietnam Food Association said local businesses bought 790,000 tons of rice in the first two-and-a-half months of the year, accounting for 79 percent of a targeted 1-million-ton stockpile planned for the first half. On the good news, the association said it would increase the 6-month stockpile target to 1.5 million tons. The association said the April goal would be reached by the end of this month thanks to a healthy Winter-Spring rice harvest. The association said they paid about VND4,200-4,500, or US$0.22-0.24 a kilogram, for unhusked rice used in the stockpile. It said local businesses had paid 14-20 percent of the loans they had used to fulfill the plan. The association said local businesses would buy an additional 500,000 tons for the second stage of the plan next month.

India rice procurement crosses 25 million tonnes

Rice procurement by the government has crossed 25 million tonnes so far in the ongoing 2009-10 kharif marketing season, nearly 2.9 million tonnes short of target. According to official data, total rice purchased by the Food Corporation of India (FCI) and state agencies stands at 25.13 million tonnes so far this season against 25.57 million tonnes in the last one. The Centre has set a target to procure 28 million tonnes of rice this season, more than the annual requirement of 27.2 million tonnes for running the Public Distribution System (PDS), even as production is expected to be lower by over 11.6 million tonnes this year. According to official estimates, rice production is pegged at 87.56 million tonnes in the 2009-10 season against 99.18 million tonnes last year. FCI and other state-run procurement agencies had last year purchased a record 33.68 million tonnes of rice following bumper production of 99.15 million tonnes. The government is procuring the rice grown in the June-September period of the 2009-10 kharif season. The purchase is almost complete in Punjab and Haryana and was much higher than last year. Punjab contributed 9.27 million tonnes compared to 8.44 million tonnes in the same period last year to the central pool, while procurement stood at 1.81 million tonnes in Haryana against 1.41 million tonnes in the year-ago period. The procurement in Chhattisgarh has improved to 30.20 lakh tonnes from 2.54 million tonnes last year. However, rice purchase in Andhra Pradesh and Uttar Pradesh is lagging behind at 3.61 million tonnes and 2.5 million tonnes, respectively, from the year-ago period.

Declining demand lops off rice prices

Slow demand has lopped $100 off Asian rice prices from last year's peak, returning them to levels last seen in 2008, but a further drop could revive the appetite of key buyers, including Africa and the Middle East. The benchmark price has fallen steadily after the Philippines, the world's biggest buyer, tied up most of its 2010 needs late last year, while the chances of India going to the market are slim, given its bulging stocks. Stocks of nearly 27 million tonnes in India could push the world's second-biggest producer to lift a ban on exports of common rice grades that dates to October 2007. "Prices are dropping now and buyers are just in a wait-and-see mode," said Mr Cao Thi Ngoc Hoa, vice general director at Vinafood 2, Vietnam's largest rice exporter. "There's demand from Africa and the Middle East but they're probably waiting for the price drop to stop before they buy." Benchmark Thai rice has fallen from a December 2009 peak of $630 a tonne, hit during a series of Philippine tenders, to $530 a tonne, its lowest this year. Top exporters Thailand and Vietnam, which are struggling to sell huge stocks of the Asian staple, have decided to halt sales for a few months during their harvests, hoping a short-term supply squeeze will support prices. While off from their peak, benchmark Thai rice prices are still easily double those of five years ago, as demand rises in step with a growing global population of 6.8 billion, nearly half of whom eat the grain as a staple. Prices were below $400 in 2008, before a crisis trebled prices to a lifetime high of $1,080 that April, as buyers led by the Philippines scrambled to secure supplies and major exporters curbed sales. This year, Africa, a key market for Thailand, has largely skipped purchases, with higher production allowing countries there to wait for a further price drop before they decide to buy. “Africa has been a regular buyer of Asian rice, but has always been a price-conscious market. The last surge in prices due to the Philippines' massive buying spree has adversely affected African demand," said Mr Shahzad Naqi, chief executive of Pakistani rice exporter Peak Holding. Mr Naqi said a further price drop may whet the appetite of African countries as well as Bangladesh and the Philippines, which could delay additional imports until after a national election in May, unless the El Nino weather condition worsens. The Philippines' 2010 imports, already at a record 2.45 million tonnes, may top three million as its plugs a production gap caused by El Nino. The long hot season caused by the El Nino weather anomaly is estimated to knock 10 percent off Thailand's main crop and around five per cent off the Philippines' annual output, totalling more than three million tonnes of paddy. The impact of El Nino on Vietnam was expected to be moderate. But the additional purchases are much less than the combined 16 million tonnes Vietnam and Thailand hope to sell this year. "If there's no new demand coming, Thai rice could come down to below $500, probably $480," said Mr Chookiat Ophaswongse, president of the Thai Rice Exporters' Association. Outside Asia, El Nino is also affecting planting in the United States and South America, including major producer Brazil. "Normally, we are planting rice in Texas and South Louisiana but the weather is too wet and the temperatures too low and so some farmers are two weeks behind," said Mr Dwight Roberts, president of the US Rice Producers' Association. The El Nino weather phenomenon should fade by early summer in the northern hemisphere but there is a chance La Nina conditions will develop later in the year. The opposite of El Nino, La Nina cools Pacific Ocean waters and could bring storms that may hurt Asia's rice production.

India exports non-basmati rice despite ban

The government has approved exports of close to 10 lakh tonnes of non-basmati rice in 2009-10 to neighbouring countries as well as some African nations on diplomatic grounds even as the grain export is banned. Exports of 9.52 lakh tonnes of non-basmati rice were cleared. Central public sector undertakings such as MMTC, STC and PEC were asked to negotiate the deals at market prices. "The ban is not applicable on shipments under food aid programme, diplomatic and strategic reasons and bilateral agreement through MMTC, STC and PEC," an official said. The maximum quantity — 1.44 lakh tonnes — was allowed for African nation Cote D'Ivoire, followed by 1.41 lakh tonnes to Senegal. Sri Lanka, Nepal and Mauritius were also covered under the scheme. In April 2008, export of non-basmati rice was banned to augment domestic supply and check food prices. The annual food inflation is ruling above 16 per cent. However, there is no restriction on shipments of Basmati, a premium variety of rice, subject to minimum export price of $900 a tonne. According to official estimates, rice production is pegged at 875.6 lakh tonnes in the 2009-10 season, against 991.8 lakh tonnes last year season.

Pakistani growers worried over TCP rice sale

Growers have shown their reservations over Trading Corporation of Pakistan’s tenders for rice sale in the local market saying it would have bad impact over paddy prices in next season. “TCP should export rice instead of offloading the commodity in the local market, which brings down the rates causing losses to the growers,” Basmati Growers Association President Hamid Malhi said talking to The News on Wednesday. “Whenever rice prices stabilise in the local market, TCP issues sale tender,” Malhi said pointing towards two TCP tenders issued last week for the local sale or export of around 2,500 tons of Irri-6 rice and 25,000 tons of Basmati. TCP has mentioned that Basmati as well as Irri-6 would be available for both local sale and export but the growers have objected. “They have saved their skin by mentioning export in it,” Malhi said. “They are least bothered about the domestic market.” Sindh Balochistan Rice Millers Association, President, Arif Hussain Mahesar, said the TCP tender would not affect the Irri-6 market owing to small quantity, but Basmati market would suffer a glut of the commodity. The growers have already sold their paddy but millers and traders with grain stocks would suffer a plunge in rice rates. Rice Exporters Association of Pakistan Chairman Malik Jahangir said, “TCP’s rice is bad in quality and nobody is willing to eat it.” He said because of the poor quality of its rice, REAP was not participating in the tender. He said the corporation has failed to sell its rice in last two tenders. “If it was good in quality, it would have been taken earlier.” REAP purchased more than 70 percent rice lying with PASSCO, he said, but TCP’s was too bad to eat. Pakistan had a seven million tons bumper crop of rice last year and 6.6 million tonnes this year. TCP purchased 75,000 tonnes of basmati rice last year and 50,000 this year. Export of Irri-6 rice has been increased but basmati remains its level. Hamid Malhi said that early this year the ECC already approved export of basmati lying with the TCP, but no action was taken on its decision. Government has announced support price of Rs1,250 per 40-kg paddy but the growers received only Rs750 from the millers and traders, Malhi said. Though growers have sold their paddy to the millers but the impact of this year’s low rates would affect the prices next year, as lot of grain would be available in the market. Traders would also be affected from dampened prices.

Opportunities for U.S. rice exports

The current rice market is cramped, with more rice in projected carry-over than in previous years. “We are still in a very tight situation. We’re in a bubble and if there are any problems in any of the major rice-producing countries, things could change rapidly,” said Riceland Foods’ Carl Brothers. Regarding international politics and economics, rice remains king — the food staple of the world. Rice production worldwide is at 439 million metric tons, with the U.S. producing 2 percent of that total. However, U.S. rice producers play a far greater role in the rice trade than the 2 percent tag implies. U.S. rice significance carries tremendous weight in regard to the export market — as the third largest rice exporter in the world. As recently as 1980, the U.S. was the No. 1 rice exporter globally, but is now ranked behind Thailand and Vietnam. Despite ever-increasing tons of rice produced, only a small percent is traded internationally. As glaring examples: China and India are the two largest world rice producers, yet their domestic consumption leaves little for export. Speaking at the Mid-South Farm & Gin Show, Memphis, Tenn., Carl Brothers presented an update on the condition of the world rice market, and detailed opportunities for U.S. rice producers. Brothers, senior vice president, Riceland Foods, Inc., Stuttgart, Ark., says the current rice market is cramped, with more rice in projected carry-over than in previous years. “We are still in a very tight situation. We’re in a bubble and if there are any problems in any of the major rice-producing countries, things could change rapidly, as happened in 2008, when concerns took prices to over $1,000 per ton.” The outlook for U.S. rice continues to be brighter for medium-grain. Despite overall planted rice acres in 2009 up 5 percent, long-grain acreage dipped 3 percent, and Brothers says medium-grain compensated for the long-grain drop. “Total U.S. long-grain acres were down 3 percent. If you turn and look at medium-grain acres, the picture is quite different. We doubled our medium-grain acreage in 2009 — going from 101,000 up to 226,000 — a 124 percent increase.” Louisiana played a significant role in the medium-grain gains, with acreage increasing 267 percent. Despite Southern medium-grain increases, California medium-grain quality continues to dominate the U.S. market. California’s 2009 medium-grain crop, while not a record, was substantial and continues to draw high prices when matched up against the South’s product. Why? “They’ve got a better product than we have ... I really hate to say that, but if you compare the California Calrose with the Southern medium-grains being produced, there is a big difference. “If you were going in and buying them yourself, I think you would choose the Calrose. We’re working with experiment stations to address that, and would like to get closer to California quality with the product that we produce in the South,” says Brothers. The high-quality Calrose allows California entrance to foreign markets not accessible to Southern medium-grain. “The Japanese are not interested in Southern medium-grain. The Taiwanese, although we got a small amount in there this year, are not very happy with it. I think they mostly bought trying to break the California market.” Even with California dominance, the increased Southern medium-grain acres have found a buyer in close proximity — Puerto Rico. “We will supply Puerto Rico this year and that’s going to be the savior of the almost doubling of the size of the Southern crop. Puerto Rico will return to the South for their medium-grain needs and that will pretty much clean up the Southern crop, although there will be medium-grain carried over, but principally in California.” Brothers noted that Puerto Rico consistently buys its rice from the cheapest source available. But with the vagaries of the global rice trade — a prolonged Australian drought, an Egyptian export ban, and a Chinese pullback — the Puerto Ricans have turned to the U.S. for rice. “Most of that rice is coming out the Southern United States and not California.” Rice opportunities • Iraq remains a key for U.S. rice exports, according to Brothers. In January, the Iraqis balked after Thailand overvalued its rice crop, resulting in an Iraqi purchase of 100,000 metric tons from the U.S. Iraq is currently looking to buy again. Brothers says prices have been offered to the Iraqis and a response is forthcoming. He is not confident of a spring rice sale to the Iraqis. “We’re probably not quite as optimistic about Iraqi business as we were the time before. The time before was right in the period when the Philippines was buying up rice for their shortfall and excited the Asian rice crop. The Thais got pie-in-the-sky ideas about what the value of their rice was, and they let us slip in. “I think that will be one of the best U.S. sales all year — the previous one to Iraq. But this time the feeling is the Thais have woken up.” • In addition to Iraq, Nigeria is a strong focus of the U.S. rice industry. During the 1980s, Nigeria was a strong importer of U.S. parboiled rice. With incessant political instability and a population of over 150 million, domestic rice demands march in tune with Nigeria’s economic pulse. Higher rice prices in Asia have factored heavily on Nigerian import decisions. “Nigeria has been a welcome return for us ... We lost that market to the Asians. With the Asian price run-up in recent months, they’ve returned to the U.S. and I hope we can catch them on our quality — seeing a difference — and we can take over the Nigerian market.” • In Europe, the hurdles for U.S. rice continue to revolve around the GE controversy. Brothers says a reasonable tolerance policy is needed when testing for GE identification. With common conveyance and shared harvesting equipment (rice, corn, wheat and cotton fiber) the probability of positive GE readings remains high. “These tests are so sensitive they are going to pick that up. So we need a low-level presence policy, which basically I would call it a tolerance. They don’t call it a tolerance — no GE being allowed in Europe — so they call it a low-level presence policy,” details Brothers. A low-level presence policy would afford the U.S. valid latitude in accounting for traces of genetically engineered products. For U.S. rice producers, it would offer a variance from Europe’s zero tolerance of GE products — essentially interpreting zero as 0.1 or higher. “The first thing they’ve suggested they would do would be to find a technical answer ... What they’re suggesting is to further define zero as 0.1, 0.2, 0.3. If we could get that type of low-level presence, I think we would have a greater opportunity to get our product into the European Union. So we are going to keep pushing on that.” • As for Cuba, diplomatic channels continue to clog. Despite rumors of agreements and relaxations, no benefit to U.S. rice growers appears imminent. “Cuba is slower moving than we’d like. There are several deals in Congress suggesting a relaxing of the situation, mostly about travel and payment. The Cubans got really irritated with us when we typed up the payment restrictions about a year and a half ago, and they haven’t bought anything from us since. “They are just upset with us and our politics. We think the atmosphere is the best that it can be to see something happen with Cuba,” states Brothers. • Regarding Brazil, Brothers says weather, similar to what U.S. growers dealt with last year, had a heavy impact on the 2009 Brazilian crop. He believes Brazil will curtail exports and hold rice for domestic consumption — a boon to U.S. traders. “They’ll empty out Argentina, Uruguay, and then lastly they’ll come to the United States for rice. If that were to happen, I’d expect it to happen in mid to late summer. That one is worth watching.” Questions always linger in the global rice market, but U.S. growers have confidence in their product. Rice continues as a bellwether crop, unique in its relation to political climates. Brothers believes U.S. producers must be vigilant and continue moving forward. “No one stands still, and we’ve got to keep getting better; keep increasing our yields, lowering our costs, doing everything we can to stay competitive. The Asians are after our business and we’re going to have to fight as we go along. If we relax at any time, then I think we get run over. “The numbers that I see from the rice industry look very promising for continuing to grow rice, protecting our infrastructure, and employing people. We’ve seen some other industries struggle in that respect.”

Vietnamese rice exporters optimistic for recovery

Vietnam exported nearly 1 million tons of rice worth US$465 million as of March 18 this year, a decrease of 25.98 percent in quantity, and 12.87 percent in value year on year. However, it was an improvement over last month. Domestic firms currently have contracts to export more than 2 million tons of rice this year. And according to the Vietnam Food Association (VFA), the market for Vietnamese rice has recently grown. For some time, Vietnamese rice exporters were unable to enter the Iraqi market. However, Vietnam Northern Food Corp. and Joint Venture Company for Rice Production, Processing and Export recently won a contract to supply 150,000 tons of rice to the country from the start of this year. It is expected that Iraq will continue to invite bids for exporting the grain. And while Indonesia has not officially declared a shortage of rice, its current stockpile is just around 1.3 million tons. Thus, the country will likely begin importing more rice in the near future. Markets in South America also look promising, as crops there have been damaged due to recent disasters. Crops in some provinces of neighboring China, meanwhile, have been badly affected by drought. Vietnamese firms have researched the situation and said there were signals of potential cross-border trade. The Philippines, Vietnam’s primary export market, is still in need of 800,000 tons of rice and will renew its contract in May. Of the total amount, 200,000 tons will be bought under commercial contract. Meanwhile, Thailand, the world’s largest rice exporter, has said it may release its stockpile, making auctions and negotiations more challenging for Vietnam. Thus, the VFA will have to work hard to protect its share of the export market. Africa remains a reliable market; however, importers and suppliers are waiting for rice prices to fall further as Vietnam has begun to harvest its winter-spring crop, of which production and quality are the highest of the year. Vietnam has retained its prices for over a month though, while Africa’s stockpile has started to drop, prompting importers to buy more. VFA members have also stockpiled 790,000 tons of rice, meeting 79 percent of the target. They said they would fulfill their goal this month. According to the VFA, they will continue to buy around 500,000 tons of rice. The stockpiles have helped to stabilize the price of paddy, which is currently around VND4,500 a kilo. VFA said firms must pay a rather high interest rate of 14-20 percent for loans to buy paddy and rice. Despite a Government directive to offer businesses special interest rates for loans to build warehouses, most firms haven’t received the financial assistance. VFA ordered firms to use their available capital or ask for loans at other banks instead of relying on the Bank for Investment and Development of Vietnam. However, to reduce the risk, VFA will ask for support from the Government to stockpile the next 500,000 tons of rice.

Laurent invests $1.6m in rice factory

LAURENT Import Export Company has invested US$1.6 million to build a factory to polish and package rice for export in Battambang Province’s Thma Koul District. Lim Bun Heng, president of Laurent Import Export Company, said Tuesday that his company plans to build a factory able to process 300 tonnes of rice per day. Construction will begin in August and be completed in December, Lim Bun Heng said. “We hope that when the factory is built, the company will be able to export rice in larger amounts into international markets,” Lim Bun Heng said. Pho Sambo, head of the Industry Office of Battambang’s provincial Department of Industry, Mines and Energy, said Tuesday, that 10 rice-processing factories have been built in the province. “We support all projects to build such factories in the province, both at present and in the future, because we want our potential fragrant-rice products to be exported in larger quantities in the future,” he said. Cheam Chan Sophorn, director of the province’s Department of Agriculture, Forestry and Fisheries, said Battambang remains the country’s leading producer of paddy rice, but it lacks modern processing equipment needed for heavy export. “I think that if the province has enough modern equipment and factories to process quality rice, rice exports will increase,” he said. Battambang farmers harvested a total of 760,000 tonnes of paddy in 2009 and 2010 — 730,000 tonnes of rainy-season paddy and 30,000 tonnes of dry-season paddy — according to the provincial Agriculture Department. Lim Bun Heng said his company processed and sold 14,000 tonnes of rice in 2009, 4,000 tonnes for export. The company plans to process about 25,000 tonnes of rice in 2010, he said, with 10,000 tonnes slated for export.

India’s basmati rice exports may touch record level

India may export record quantity of basmati rice in this financial year due to increasing global demand and rise in production of premium rice, Dow Jones Newswires reported on Tuesday citing industrial and government estimates. The country’s basmati exports are expected to touch a record of 2.7 million metric tonnes in the current fiscal that ends on March 31. When compared to last year, the production of basmati rice registered modest growth rate this year due to many farmers shifted to premium rice because of poor monsoon rains as the basmati rice consumes less water. Meanwhile, the global demand for the premium rice remained strong despite economic crisis. Earlier, the exports from India stood minimal due to the imposition of an export tax of $200 per tonne in order to ensure enough supply in the domestic market. India had to face stiff competition from Pakistan earlier as the export tax of $200 a tonne made the Indian basmati costlier. However, after the withdrawal of the tax in January last year, the basmati exports revived to rise sharply. India, the largest basmati producer, exported 1.55 million to 2 million tons in the last fiscal year ended March 31, 2009, various trade and government data show. India’s basmati exports are likely to rise by 40% this fiscal as against previous year due to a bigger crop size and good demand for Pusa 1121, A.K. Gupta, adviser to the state-run Agricultural and Processed Food Products Export Development Authority was quoted by Dow Jones. Exporters have signed deals to ship more than 1.07 million tons to the United Arab Emirates, 800,000 to Saudi Arabia and over 251,244 tons to Iran.

WFP buys local rice from Ghanaian farmers

The United Nations World Food Programme (WFP) on Wednesday said it had purchased 1,433 metric tons of Ghanaian rice worth 780,000 dollars as part of its growing trend of purchasing locally to benefit farmers. A statement from WFP and copied to the GNA in Accra, said the rice would be distributed through the School Feeding Programme in the three Northern Regions where WFP, the Programme and the Ghana Education Service (GES) work together to provide meals to over 100,000 children in 304 schools. "The new strategic plan encourages local purchases from countries where we work. When prices are competitive and funding is available, we buy food within the country for distribution to the vulnerable food-insecure people whom we assist, so it becomes a win-win situation for both farmers and our beneficiaries," Mr Ismail Omer, WFP Representative in Ghana said. It said out of the 1,433 metric tons of rice purchased, the Northern Region office of the Ministry of Food and Agriculture (MOFA) supplied 55 metric tons, AMSIG Resources supplied 878 metric tons and EDEM Farms won the third bid to supply 500 metric tons. The statement said AMSIG Resources was a Millennium Development Authority technical training service provider which works with farmers in Savelugu-Nanton, Tolon-Kumbungu, Tamale, West Mamprusi and Karaga. "The rice which AMSIG supplied to WFP was produced by groups of women farmers who lived in these communities in the Northern Region," it said. The statement said WFP food purchases in Ghana had increased significantly in recent years and that in 2008-2009, it purchased food worth 10 million dollars consisting mainly of maize, maize meal, corn-soy blend, iodised salt and vegetable salt, with rice being recently added to the food items specified for distribution. It said building on its successful local procurement programme, WFP would soon roll out a new initiative called Purchase for Progress (P4P), a five-year pilot programme which would promote the development of agricultural markets in such a way that smallholder farmers would produce food surpluses and sell them at fair prices to various markets including WFP operations. The statement said an assessment mission was currently evaluating smallholder farmers' challenges and building partnerships for its implementation. WFP is the world's largest humanitarian agency fighting hunger worldwide and aims to feed 90 million people in 73 countries in 2010. GNA

Global rice trade prospects

Unpredictable government intervention in the rice sector is adding to volatility in a thinly traded market and could lead to new price swings in what is a staple food in much of the world. Rice is a politically sensitive crop as a daily essential in much of Asia and Africa, and a price spike in 2008 sparked unrest. State action, notably export curbs by countries like India, were criticised by observers for fuelling soaring prices then, as benchmark Thai rice prices hit a record $1,080 a tonne. They currently trade at about half that level. Changing support policies for farmers in top exporters Thailand and Vietnam, plus erratic state purchases by leading importer the Philippines, have again raised uncertainty in the market. "Rice is no longer in the hands of the trade, it's much more in the hands of the politicians, for better or worse," Conrad Creffield, trading manager at Swiss-based Novel Commodities, told an industry conference. Thailand has gone back on plans to sell public stocks and, like Vietnam, will be buying crop from farmers to protect their prices during what promise to be big harvests. Coupled with the absence of the Philippines from the market after a buying spree late in 2009, this could hit rice prices in coming months, speakers at the conference said. Thailand's stance on rice will be closely watched in the coming weeks, with the issue also tied up with a political crisis that has seen rural inhabitants fill the ranks of "red shirts" protesting against the government. "They could quite easily reverse (again) their decision and start selling into the market," Darren Cooper, senior economist with the International Grains Council, said of Thai policy. The Vietnamese authorities are also closely involved in the rice trade and have imposed a floor price on exports to prop up the domestic market. But some players said their policy was nuanced and aimed to boost both exports and farmers' income. "Vietnam and the private traders have shown and proved by whatever results they achieved last year that their rice policy seems to be appropriate to their own economy," said Vandara Din, a Swiss-based rice consultant, referring to record exports of 6 million tonnes in 2008/09. THE RIGHT RICE PRICE Agricultural markets have become a subject of international debate after the tensions of 2008 and with expectations of growing strain on supply due to a rising world population and environmental constraints like water shortages. Moreover, the sector is structurally prone to fluctuations because only a small amount of production is exported and this trade is concentrated among a handful of producers. For some operators, government intervention has exacerbated volatility and distorted the market with short-term price support that fails to give clear signals about how to invest. "We're left a bit in the dark," Jean-Pierre Brun, director of French rice broker Marius Brun et Fils said, stressing disparities of $100 a tonne or more between Asian producers. "It's not logical in a world market to have such big differences between very similar rice grades." A new French documentary entitled "Rice jacking" revisited the 2008 crisis, partly blaming massive buying by the Philippines. But the Philippines sees its imports as adjusted to weather-reliant domestic supply, while officials elsewhere view support for farmers as a way of raising output, as shown by Vietnam's successful expansion. As across agriculture, the underlying question in rice is increasingly how can prices balance producer and consumer needs in the face of intensifying demand and environmental pressures. "What is the correct price for rice? That may seem a silly question but it is key to understanding the whole picture," Creffield said.

Bountiful rice crop brings headaches to farmers in Vietnam

Mekong Delta farmers have already harvested two-thirds of the winter-spring rice crop. It’s been a bountiful year; the farmers are averaging 6.2 to 6.5 tonnes per hectare. But, as always, when the crop is big, the price falls. In Hong Ngu and, Tan Hong districts of Dong Thap province, merchants are paying farmers only 4000 dong per kilo for normal rice and 4300 dong per kilo for long grain rice. Are production costs really just 2800 dong per kilo? VFA has announced that it is collecting one million tones of rice to store up for export, a move that should push the domestic price up. The association said that it will pay farmers no less than 4000 dong per kilo of dried rice, a price it believes will ensure a minimum profit of 30-40 percent for farmers. Why 4000 dong per kilo? VFA calculates the production cost to be from 2500 to 2800 dong per kilo. If that’s correct, the collection price of 3800 dong per kilo would be high enough to ensure a 30 percent profit for farmers However, farmers do not think this way. “I cannot understand why VFA thinks that the production cost is just 2500-2800 dong per kilo,” said Lam Van Bon, a farmer in Hong Ngu district. By Bon’s calculation, it costs him 1.5 million dong per hectare to repair the dikes, till and level the soil. Pumping water into the fields to irrigate them uses up another million, and buying seed rice yet another 1.5 million per hectare. Pesticides, weed-killer, fertilizer, transplantation eat up another 9.5 million dong per hectare. Harvesting, threshing and transporting the rice to the buyer demands another 3.5 million dong. The variable expenses of a rice crop thus mount to 17 million dong per hectare. If that were all he had to spend, Bon says, and he sold the seven tons of rice he’s harvested for 4000 dong per kilo, he’d realize a profit of 11 million dong per hectare. However, the calculation isn’t realistic; it doesn’t include the cost of leasing the land, and when that’s included, the cost of producing a kilo of rice rises to 3930 dong per kilo! Farmers do not get what they deserve Nguyen Minh Nhi, former Chairman of An Giang province, also agreed with Bon’s calculation. When people calculate the production cost, he said, they often overlook land leasing and management fees. Nhi said that farmers should be considered as the managers of enterprises and they need to get ‘salaries’. As the heads of the families, they need to feed children or parents who cannot work. The land leasing fee is now 1-2.5 million dong per 360 square metres per annum. Deputy Minister of Agriculture and Rural Development Bui Ba Bong also said that farmers still do not agree to how profit is being shared in the value chain. They think that processors and exporters obtain bigger profits than farmers, while farmers have to do most of the work. Bong said that the Government has been well aware of the problem and is taking necessary steps to harmonise the profit of farmers, enterprises and exporters, while helping the State ensure food security.

Vietnam export and prices flash

Vietnam has exported over 983,000 tonnes of rice with the total export turnover of US$ 544 million from the beginning of the year, according to the Vietnam Food Association. This year, Vietnam plans to buy 1 million tonnes of rice as reserve to stablise the rice price. So far, 789,000 tonnes of rice has been bought, reaching 75% as scheduled. The VFA suggests farmers to reserve rice as the rice price may go up in coming time due to increasing demands from African and South American markets.

Cambodia Rice exports set to rise to Europe and Russia

THE Small and Medium Industry Association of Cambodia has agreed to sell 1,348 tonnes of rice worth more than US$500,000 to four European countries and Russia over the next two weeks, the group said Monday. The association has been contracted to sell 48 tonnes to Germany, 120 tonnes to Latvia, 340 tonnes to Lithuania, 360 tonnes to Poland and 480 tonnes of rice to Russia in a deal worth $567,840, Outh Renne, secretary general of the association, told the Post Monday. The rice will be supplied from March 27 to April 7 via Sihanoukville Autonomous Port, he added. “We hope that the association will be able to sign more new contracts, which will open the way for it to export more rice to European markets in the future,” Outh Renne said. The association hopes this year to export between 7,000 and 10,000 tonnes of rice worth $3.1 million to $4.5 million to European markets, according to an association report. The association exported 144 tonnes of rice to European markets in January and 480 tonnes of rice in February. Mao Thaura, a secretary of state for the Ministry of Commerce, told the Post Monday that an increasing amount of Cambodian rice has been exported to European markets because local producers are now more capable of processing rice and receive tariff deals from the European Union. The EU began allowing rice imports from Cambodia in August 2009, granting a zero-percent tariff rate. The tariff break “is a good chance for Cambodian rice to compete with that which is imported into Europe from other countries”, Mao Thaura said. The Small and Medium Industry Association will hold a meeting in May between European buyers and local rice producers and will continue to raise local rice productivity, Outh Renne said.

Thailand Rice prices lift as govt retains stocks

Rice prices are gradually recovering on the government's clear plan to stop feeding its inventory into the market. "Rice prices should increase considerably from now, as the government will not release our stocks," Yanyong Phuangrach, permanent secretary of the Commerce Ministry, said yesterday. The market price of paddy rice has crept up by Bt200-Bt300 a tonne. The ministry has responded by lowering its compensation to farmers to Bt994 a tonne this week from Bt1,081 last week. "The government also has a plan to shore up the rice price by allowing exporters to exchange their rice with the government's rice so we can keep good quality rice in stock," Yanyong said. However, the exchange plan may be delayed, as it did not make the agenda for the Cabinet meeting today. The plan would encourage exporters to buy rice from the market, while the government will be able to keep good quality rice in storage, Yanyong said. The government is planning to keep rice in its warehouses for a while to shore up the price in the market. Government rice is about one year old and still of good export quality. Under the government's income guarantee policy, farmers will receive the difference between the guaranteed price of Bt10, 000 a tonne and the reference price. The reference price for this week is set at Bt9,006 a tonne, increasing from last week's Bt8,919. The market price for paddy white rice is currently quoted at Bt8,700-Bt10,100 a tonne. Charnchai Rattananon, president of the Thai Rice Millers Association, said rice prices have been buoyed by the government's intervention measure. He wants the government to stabilise rice prices in the long run so farmers will not suffer again from falling prices and income. The government will not have to spend as much via the intervention scheme if the rice price was down. The government should urge millers to pay Bt300 a tonne more to drive up the rice price, he added.

More thai farmers opting for guaranteed-income scheme

The number of farmers intending to join the guaranteed-income scheme for this year's second crop of rice has increased to 600,000, higher than the previously estimated 480,000. Bank for Agriculture and Agricultural Cooperatives president Luck Wajananawat yesterday said the BAAC had been screening applicants and that so far, 339,074 farmers were eligible for the guaranteed-income, or Na Prang, scheme, he said. The bank is supporting this and other measures to shore up farm product prices. "The income-insurance scheme has proved popular among rice farmers, with 72.3 per cent of those surveyed by the BAAC saying they |were satisfied. Only 17.2 per cent said the previous rice-pledging scheme was better," Luck said. Under the present scheme, which covers rice, cassava and maize, the government compensates farmers if the market price goes below the guaranteed price. The BAAC said in the first round, covering the 2009-10 crop, 3,71 million farmers were compensated Bt34.1 billion, with the highest amount, Bt26.97 billion, going to 3.1 million rice farmers, while Bt5.49 billion went to 369,130 maize farmers and Bt1.63 billion to 237,880 cassava growers. Luck said it was rather difficult to implement this scheme, because many farmers did not understand it, while several wanted the government to drop it and resume previous price-intervention schemes. One of the major problems with this scheme is the government's reference prices do not reflect the market price, which results in farmers losing out on compensation. Farmers are actually given the difference between the government's reference price and the guaranteed price, not the difference between the actual market price and the guaranteed price. Luck said the only way to solve this problem was for the government to agree to adjust reference prices at least four times a month, so that they reflected the actual market prices. He said the present dip in rice prices - caused by reports the government was planning |to release its stockpile - would be only temporary. The price of rice is bound to rise, due to high demand and low supply in the world market. Drought had also affected rice production in India, forcing that country to import the grain instead, Luck added.

Syria rice trade report

Rice consumption is increasing moderately, in line with population growth and imports are forecast to exceed 300,000 tons in 2010. Egypt, Syria’s major supplier, severely restricted exports during 2008 and early 2009 seasons. This affected the Syrian market and caused higher retail rice prices. The export restrictions, although significantly reduced, are still in place. Consumption In Syria, rice consumption is increasing due to population growth and the presence of over one million Iraqi refugees in Syria. Each Syrian is entitled to 0.75 kilogram of rice per month at 10 SP (21 U.S. cents) per kilogram under the Government of Syria (GOS) ration card system. There was a delay in distribution of the rationed rice during 2009 due to the delay in imports after Egypt restricted rice exports in 2008 and early 2009. This created additional demand for rice in the free market and prices doubled. Traders had to look for other rice suppliers to supply the local market demand. The increased prices did not go down when the global prices did. This is very different from the wheat, barley and corn situations where prices started to drop shortly after international prices started to go down. Rice is selling at higher prices than in neighboring markets because the Syrian traders imported the rice at the height of the market. Import Trade Matrix Units 1000 MT Imports for:2009 U.S. 6 Egypt 150 Thailand 100 Australia 5 Pakistan 5 Spain 5 Italy 5 Vietnam 10 CY 2009 was not a normal year for the importers or the consumers who still prefer to import and consume Egyptian medium grain rice due to the price factor. As with consumption, imports are forecast to grow in general, taking into consideration the increase in population and the continued presence of over one million Iraqi refugees. Further improvements in the political and security situation in Iraq could start to reduce the refugee population. Egypt, Thailand, Australia, Italy, Pakistan, Spain and the United States are the traditional suppliers. India and Vietnam have recently emerged as small suppliers. Marketing: Syrian consumers generally prefer medium grain rice from the United States, Australia, Italy and Egypt to long grain rice from Thailand and short grain rice from Vietnam. In addition, the Iraqi refugees are more accustomed to long grain. However, the limited purchasing power of the average Syrian influences the decision to seek out cheaper sources of rice.

Brazil Rice annual report

Production: Rio Grande do Sul, in the South Region, is the major rice producing state in the country, generally accounting for half of Brazil‟s entire crop. However, as is the case with corn, some rice is produced in every state in Brazil. Brazil produces mainly long grain rice under irrigation and also dryland conditions. Nearly fifty percent of rice produced in Brazil is irrigated rice, with 90 percent of all irrigated rice production in Rio Grande do Sul. The South continues to shift from dryland to irrigated production. Yields in irrigated areas are generally high at more than 6 kilograms per hectare. Conversely, production in the Center-West and Northeast is usually dryland cultivated with much lower yields. Center-West rice area has not grown as many had predicted. With the massive expansion of soybean and corn cropland in the region, it was thought that rice would also expand as it is often used as a precursor crop and occasionally in rotation with soybeans. However, such expansion has not occurred on the scale many had predicted and in fact, the area under cultivation has fallen from 900,000 hectares in 2003/04 to 356,000 hectares in 2009/10. In 2009/10 the Center-West fell from the second largest planted region to the fourth behind the South, Northeast and North. The Northeast is comprised of many small producers that rely on hand labor and use few inputs, and therefore yields are only one third of those on the Southern lands. Planting runs from September through November and harvest runs from the following February through April. The local marketing year runs from March to February. Page 17 Post estimates that Brazil will produce a smaller rice crop this year at 7.85 million tons (milled basis) or 11.5 million tons of rough production. Imports are estimated at 1 mmt or double last year‟s 500,000 tons. In Rio Grande do Sul, excess rain caused replanting outside the recommended period. Throughout the state, there were an estimated 1.084 million hectares planted but only an estimated 1.031 million hectares will be harvested. There are also continuing concerns that moisture and high temperatures may increase the possibility of disease outbreaks that could damage the quality of the crop. Outlook 2010/11: Production Post forecasts rice area planted in 2010/11 at 2.8 million hectares, the same level as 2009/10. Rice production is forecast at 12.2 mmt (rough basis) or 8.3 mmt (milled basis); an increase of 6 percent from the current 2009/10 estimate reflecting better yields based on moralized weather patterns. Producers remain concerned about red rice and in particular, to its growing resistance to herbicides. Red rice is the main invasive plant in the South. The presence of red rice has resulted in lower prices to producers. Red rice infestations began to be controlled in 2004, however, now there are reports that in some areas red rice is almost 100 percent resistant to herbicides. Imports With 2009/10 national production down due to adverse weather, Post is increasing its import estimate to 1 mmt, the highest level since 2003/04. Brazil will source the vast majority of these rice imports within the Mercosul block, principally Argentina and Uruguay. These countries maintain competitive advantage in the Brazilian market due to lower land and production costs, lower transportation costs, shorter delivery times and zero-duty access. However, there are reports of Brazil needing to source outside of Mercosul. Although there was speculation that there would be opportunities for U.S. exports in January, the probability of this occurring has been reduced because prices have fell more than 10 percent in February.. The 2010 tariffs on non-Mercosul rice is 10 percent for HS1006.10 (excluding for seed), 10 percent for HS1006.20, 12 percent for HS1006.30.11 and HS1006.30.21, and 10 percent for HS1006.30.19 and HS1006.30.29, and 10 percent for HS1006.40. With 2010/11 production is expected to rebound, imports are forecast to fall to 700,000 mts. Page 20 Exports Over the past few years, Brazil has positioned itself as a rice exporter. From March 2008-February 2009, it shipped a record volume with a value of over US$330 million. Brazil now faces the challenge of maintaining its position given this year‟s production shortfall. The Brazilian rice industry has been upgrading it facilities at the Port of Rio Grande and investing in new processing structure with an eye toward the foreign market. Rio Grande do Sul, which accounts for one-half of domestic production, has an export target of 10 percent of its crop. In 2008, Brazil expanded export sales of value-added products finding niche markets for white and parboiled rice in Nigeria, Senegal, South Africa and Benin. Despite these efforts, most analysts suggest that it will be difficult to keep up this export pace when faced with a production shortfall. They say that internal demand will be satisfied first. One option to maintain a presence in foreign markets is for the Government of Brazil (GOB) to take action to preserve outside markets by having the Food Supply Company (CONAB) auction off part of its 1 mmt exclusively for export sales. Post estimates2009/10 exports at 300,000 mt, less than one-half of the 650,000 mt exported in 2008/09. In 2010/11, exports are expected to increase to 500,000 tons. Stocks: Storage is particularly tight at rice harvest since Rio Grande do Sul, the principal producing state, is also a major soybean producer with the two crops harvested simultaneously. Policy: A normative instruction which establishes new classifications, identity requirements, quality and labeling standards of rice went into effect March 3, 2010. This instruction applies to imported as well as domestic rice. Producers supported updating the normative instruction to bring it more in line with international standards as they seek to increase exports. Marketing: The Government of Brazil (GOB) announced R$600 (US$333) million in guarantees for the commercialization of rice. This funding will preserve rice market prices affected by excessive rain and a potential reduction in international prices. Another R$600 (US$333) million could still be made available if producer prices fall below R$23 (US$12.78) per sack.

Drought destroys P8.4b worth of crops

THE damage wrought by El Niño to crops amounted to P8.4 billion, Agriculture Secretary Bernie Fondevilla said Friday. Verified reports showed standing corn crops sustained most of the damage, he told reporters at the sidelines of the Agriculture Guarantee Fund Pool awarding rites at the Bureau of Soils and Water Management. The government could not yet say if the damage would go beyond P11 billion as reported earlier. “We'll see. Should the episode worsen, we can estimate the extent of the damage and determine if there will be a need to import additional rice,” he said. The government is monitoring 14 provinces greatly affected by the drought, including Cagayan, Isabela, Nueva Vizcaya and Quirino in Northern Luzon, Bulacan and Nueva Ecija in Central Luzon, Occidental Mindoro, Oriental Mindoro, Marinduque and Romblon in the Mimoropa area or Region IV-B, Masbate in Bicol, and Antique, Guimaras and Negros Occidental in Western Visayas. Still, the department has no numbers yet for the total size of farmlands affected by the drought as well as the volume of crops that were destroyed. Over 200,000 metric tons (MT) of paddy rice was destroyed, Fondevilla estimated. The department’s Central Action Center earlier placed the damage to crops at P11.2 billion, with damaged paddy rice nearing 300,000 MT. Despite the center’s numbers for rice crops, Fondevilla said the department is sticking to its projection that paddy rice output in the first half would total 7.2 million metric tons. Paddy rice production for the second quarter will reach 3.463 million MT or 0.8 percent higher than the 3.435 MMT produced in April to June 2009. In crop survey for January, the Bureau of Agricultural Statistics said that paddy rice output in the second quarter would grow with the 1.11-percent expansion of harvested areas. It projected a harvest in 868,000 hectares of irrigated and rain-fed farms in the country. “With the demand (for palay) expected at 3.03 MMT in the second quarter, the 3.463 MMT projection is more than enough to cover our national requirement for the period,” Agriculture Secretary Salvador Salacup said. This year the Philippines will import up to 2.4 MMT of milled rice, mostly from Vietnam, to fill a possible gap in production, cover the crops damaged by typhoons late last year and the current crops felled by the drought.

Thailand Govt plans major rice roadshow

Deputy Prime Minister Trairong Suwankhiri will head a roadshow to 10 countries from March to May with the aim of selling 2 million tonnes of rice via government-to-government contracts. Department of Agriculture Extension (DAE) is expecting to achieve a bumper production of boro rice in the district during the current season as more 6,858 hectares of land than the target were brought under cultivation. A scheme had been taken to bring 171,592 hectares of land under boThe government hopes to boost exports in order to shore up domestic rice prices as well as reduce its stockpile burden. Commerce Minister Porntiva Nakasai is preparing the plan to promote Thai rice abroad. The roadshow will visit Indonesia, Malaysia, Bangladesh, Libya, Senegal, Iran, the United Arab Emirates, India, Mauritius and Singapore. A source at the ministry said the plan is to sell all types of rice: 5 per cent, 15 per cent and 25 per cent rice, sticky rice, broken rice, Pathum rice, parboiled rice and jasmine rice. Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said Thailand would lose more market share to Vietnam over the next year. He cited the dong's double depreciation this year, which has made Vietnamese rice cheaper on the global market. For instance, Vietnamese 5 per cent rice is currently quoted at US$360 (Bt11,628) per tonne, against the Thai price of $500. Due to uncompetitive pricing, Thailand's rice exports have continued to drop during the past few months. ro cultivation this season in the district with an output target of 646,860 metric tons of rice. But, the farmers have cultivated boro paddy on 178,450 hectares of land in the district, 6,858 hectares more than the previous target. The DAE is expecting to achieve new production target of 675,985 metric tons of rice. Of the total land, hybrid varieties of paddy were cultivated on 43,550 hectares of land with an output target of 208,605 metric tons while local varieties on 134,900 hectares with target of 467380 metric tons. Steps have been taken to ensure smooth supply of fertilizer, insecticide, diesel and uninterrupted electricity to achieve the target. The supply and reserve of fertilizer are sufficient this year, which is much higher than the last year, sources said. Deputy Commissioner M Abdul Jalil said all necessary measures have been taken to make the current boro season a success. Sources said the BCIC has supplied 58,032 mts of urea, 5,833.5 mts of TSP, 5,094.5 mts of MOP, 3,122.5 mts of DAP and 3,255.5 mts of SSP fertilizer in the district through 981 dealers. Farmers and DAE officials are expecting a bumper production of boro this season if weather remains favourable and pests do not invade the crops.

Pakistan Agriculture Research Council introduces aerobic rice production technology

Pakistan Agriculture Research Council (PARC) has introduced a new technology called Aerobic Rice Production Technology, aiming at conserve water and enhance paddy yield. Chairman PARC Dr.Zafar Altaf told APP that under the technology the paddy crops do not need standing water necessary for the crop but cultivated like wheat and maize crops. He claimed that by using the technology the farmers in the country can enhance their production from existing 26 Maund to 73 Maund which is more than double of the yield. “Through this method we can conserve 30 percent of water in the rice cultivating areas”, he remarked. Initially, he said that PARC has selected one district in Sind (Sangar and Sakrand) and one in Punjab (Bahawalpur, Rahimyar Khan and Multan). He said that in Pakistan, rice is, traditionally, grown as manual transplanting of 30-days old rice seedlings in the well flooded and puddled fields. Rice nursery is raised separately on fine-prepared and manured soil. He added that the nursery seedlings at the age of 30-35 days are, then, uprooted manually and shifted to the flooded and puddle field. Puddling, he said land preparation in flooding destroys soil structure and after paddy crop harvest, the soil condition is not conducive for fine land preparation and good stand establishment of following Rabi crops. He added that farmers keep standing of water continuously up to the maturity of rice crop. Moreover, manual and random transplanting of rice seedlings does ensure optimum plant population. About 50,000-60,000 plants are found in the manual transplanted crop against the recommended plant population of 80,000 to 100,000 per acre. In this respect, he said that the conventional method of rice cultivation is labour and water-intensive and involves high cost of energy, with the result of low paddy yield. Hence, he observed the present rice cultivation system is not very productive, resource-efficient and sustainable, and poses serious threats to the sustainability of rice-based cropping system. Alternatively, he said aerobic rice (a special rice that is grown like wheat or maize crops) addresses to such issues and saves water, labour, time and improves stand establishment of the following crops.

Philippines see rice production exceeding demand

UNMILLED rice production would reach 3.46 million tons in the second quarter, more than the projected demand of 3.3 million tons and should keep the grain’s prices stable, the Agriculture Department said Thursday. It said it also expected stable prices for chicken and fish, and that sugar prices should “soften” even with the drought brought by El Niño. Government attempts to induce rain have mostly failed, but the Soils Bureau said Thursday it was optimistic its cloud-seeding would help ease El Niño’s effects on crops. “We are duty-bound to implement this program as long as there are requests for cloud-seeding,” said Lilian Naga, head of the agency’s water division. About 221 cloud-seeding sorties had been conducted nationwide as of March 11, but most of them had failed, Naga said. “In fact, in our assessment about 20 percent or even less had been successful,” she said. “We’ve been the target of many criticisms as to why we continue to implement this program despite its apparent futility. We put our lives on the line because we have a directive to implement the program.” An agency team usually does a sortie once it decides there are enough clouds to be seeded. It carries 11 25-kilogram bags of salt and seeds for an hour and a half per sortie, and from 10 a.m. to 3 p.m. A sortie costs P22,400 per hour, including the Cessna plane’s rental, but “most of the time the salt seeded on the clouds melts due to extreme heat,” Naga said.

Australia to export rice gain

Total area planted to rice in 2011/12 is forecast to increase sharply to 35,000 hectares. Despite this increase, this area remains well below the ten-year-average of 64,000 hectares and well below the record of 177,000 hectares planted in 2000/01. Prolonged and severe drought, which began in 2002/03, has seen planted area fall to just 2,000 hectares in 2007/08. Planting of the 2011/12 rice crop is expected to commence in November. Post has assumed average weather conditions in the lead up to planting and this, combined with good rainfall since late December, should see production rise. Production Rice production for 2011/12 is forecast at 299 TMT, up sharply on the revised estimate for the previous year. If achieved, this crop will be the biggest crop harvested since 339 TMT was harvested in 2004/05. Post advises that this forecast is based on average rainfall. Above average rainfall would likely see 2011/12 production forecast revised upwards. Industry sources place rice production potential in the 250-400 TMT range. Post has revised production for 2010/11 upwards slightly to 185 TMT in line with industry expectations. Recent rainfall and modest improvements in irrigation water supplies is expected to result in yield improvement. Trade Since the drought began in 2002/03, rice has been imported in steadily increasing quantities while exports of rice have steadily fallen. However, a return to more normal production conditions is expected to see domestic supplies of rice increase. Post expects that, going forward, imports of rice to fall steadily while exports begin to build. Post forecasts 2011/12 rice imports to decrease to 200 TMT while exports of rice increase to 65 TMT. Post expects this trend to continue as domestic rice production returns to levels more reflective of the long term average. According to Global Trade Atlas data, the overwhelming majority of Australia’s imported rice is sourced from Thailand. However, the United States has recently become another significant supplier and, although minor by comparison, now stands as Australia’s second largest supplier.

Vietnam rice price update

Rice price offers dropped again last week due to limited export demand and the harvest of the spring crop, which is the main crop in the Mekong River Delta. Paddy prices were down VND100 per kilogram compared to the last two weeks, due to the abundant supply of paddy from the spring crop harvest.

Thailand rice update

Despite a strengthening Thai baht to 32.4 baht/$, export prices declined further by $10-15/MT due to quiet foreign demand. Foreign buyers stayed away from Thai rice as Vietnamese rice supplies are available at $120/MT cheaper than Thai rice. In addition, some exporters are facing difficulties as buyers are trying to renegotiate lower prices for previous contracts. Other exporters are cautious in lowering their quotations as concerns loom over a strengthening Thai baht to 32.0 baht/$, which would result in unanticipated higher domestic costs.

Bangladesh to import wheat on back of rice crunch

The government is importing 4.5 lakh tonnes of wheat to compensate for the deficit in procurement of Aman rice and lack of rice in the international market. The import is aimed at meeting the country's internal food demand and bolstering food security programmes. Food ministry officials said the wheat is being imported from Russia and Turkey. "In spite of having sufficient food reserves, the government is going for import because of some problems in production situation," Food and disaster management minister Abdur Razzak told bdnews24.com. However, the decision to import wheat has been taken due to lack of enough rice in the international market, he said. "We're getting proposals for importing rice from various countries including India", the minister said, adding "but the problem is no other country exports boiled rice except India". . "However, India has stopped rice exports for lack of productions. Countries who want to export to Bangladesh, including Thailand and Myanmar, sell un-boiled rice which we cannot bring in large amounts due to lack of popularity." Under these circumstances, the government has taken initiative to import wheat to make up for the food deficit, the minister said. According to the food ministry, the procurement target of Aman rice was 3 lakh tonnes. But so far only 22,000 tonnes have been procured. Ministry officials said that the government has around 7.5 lakh tonnes of food reserve, which cannot be released until the production situation in the Boro season becomes clear. The food minister said that they are prepared to start Test Relief programme at upazila levels. But it is being deferred because of the delay in wheat import. The ministry is intent on releasing this year's first wheat allocations under the TR programme by Mar 26. The first consignment of 3 lakh tonnes of wheat are to reach the country by the end of March and the second shipment of 1.5 lakh tonnes is to arrive by Apr 12. The government expects to release the imported wheat by Apr 26. Disaster management bureau director general Zahirul Huq told bdnews24.com that no wheat allocations have been given so far, but it is expected to begin with the TR programme and might be given to other projects later