Export ban on non-basmati rice, wheat to stay for now India

India is not looking to lift the export ban on wheat and non-basmati rice for now, the Commerce and Industry Minister, Mr Anand Sharma, has said. The export restrictions on these commodities were put in place a couple of years ago on the onset of high food inflation to ensure domestic availability. “As of now, there is no proposal to rollback the restrictions on exports of commodities including non-basmati rice and wheat. Basmati rice exports will continue to be allowed. An appropriate view will be taken once the monsoons are over,” Mr Sharma told a press conference after unveiling the annual supplement 2010-11 to the foreign trade policy 2009-14. Inflation Mr Sharma also highlighted that the current food price inflation implied that the Government needed to pay close attention to domestic availability. Food price inflation has remained in double digit for several months in a row despite the policymakers' assurances that they would get a handle over the situation and that wholesale price index (WPI)-based inflation would come down to 5-6 per cent level by end December this year. SEZ units To a query on tax breaks for special economic zones (SEZs) in the proposed Direct Taxes Code (DTC), Mr Sharma expressed confidence that the concerns of industry would be addressed when the final version of the DTC is sent to Parliament. “I have already discussed this with the Finance Minister and also with the Prime Minister. The Finance Minister is fully sensitive to our concerns and also the apprehensions of the industry and investors,” Mr Sharma said. He assured industry and investors in SEZs and SEZ units that their benefits will be fully protected and policy stability will be ensured when it comes to SEZs that have already been notified and those that will be notified before the DTC comes into force. The Commerce Secretary, Dr Rahul Khullar, later said that the Commerce Ministry was working on a “compromise solution” with the Finance Ministry on the issue of tax breaks for SEZ units in the proposed Direct Taxes Code regime. Mr Sharma said that the financial implications of the export incentives (bonus incentives and add on to focus product schemes) announced on Monday would be about Rs 1,050 crore. The Rs 1,050 crore will not be money voted as demand for grants through Parliament. “What we are doing here is issuing scrips as incentives. This is not in the nature of an expenditure. It is what is called tax expenditure — that is you are foregoing revenue and not actually spending any money. The tax expenditure is done through an executive order,” official sources said.

Heat wave to cut Cambodia rice harvest : FAO

Extreme heat due to lack of rains in the recent past threatens to cut rice harvest in Cambodia to levels unseen since 2006, FAO said. According to United Nations Food and Agricultural Organisation, production of rice is likely to fall 22 percent to 5.9 million unmilled tonnes this year compared with 7.8 million tonnes of paddy farmed in 2009. In a report the FAO said prospects for the season have been marred by drought conditions, which have been affecting the greater Mekong sub-region since late last year. Cambodian Centre for Study and Development in Agriculture enterprise said drought conditions were affecting only some parts of the country. The important thing is that farmers choose to grow rice from good seedlings and ensure proper use of fertiliser, it added. Cambodia’s department of Meteorology said late rains could reverse the drought. “We expect rain levels to be close to last year from the middle to the end of the rainy season, and rain will still fall until November,” it said in a forecast.

Vietnam Rice Price - Weekly

Export rice prices were still rising strongly last week. The Vietnam Food Association announced the guidance prices for 5 percent broken rice at $400 per ton and 25 percent broken rice at $370 per ton. Local paddy prices also increased further last week. However, in some provinces in the Mekong River Delta, the increases in paddy prices have slowed over the last two weeks.

Thailand Rice prices pick up as demand improves

* Rice prices are expected to rise by 6% to 7% this month or early next amid a resumption in foreign demand ahead of year-end festivals and lower supply due to climate change. Foreign purchase orders have already resumed, and a flood of orders is anticipated next month to serve the many year-end festivals, said Sumeth Laomoraphorn, the chief operating officer of CP Intertrade. More purchase orders from African markets are also likely after Ramadan. Mr Sumeth said other supporting factors were the impact from global warming and widespread drought that has led Russia to ban wheat exports. Hot, dry weather is also expected to cut the output and export capacity of Ukraine and other European nations. In addition, Mr Sumeth said lower output in Latin American countries, particularly Brazil, due to climate change is also expected to prompt them to increase their rice imports. "The Philippines, which is the world's leading rice importer, is also now facing inadequate rice production and will have to import as much as two million tonnes this year," he said. "If Vietnam, which has already secured massive advance purchase orders, fails to deliver on its commitments, opportunity will return to our grains." Vietnam expects to export 6.5 million tonnes of rice this year, 4 million of which have already been exported. Mr Sumeth said Vietnam's 2% depreciation of the dong last week was unlikely to improve the rice industry's export competitiveness very much. The currency devaluation would instead drive up inflation and interest rates, consequently raising production costs for Vietnamese producers, he said. "Prices for Thai rice have bottomed out and are now starting to improve due largely to shrinking world rice stocks after traders delayed their purchases over the past four or five months," said Mr Sumeth. "The second half will represent an opportunity for Thai rice exports, which are expected to reach 8.5-9 million tonnes." Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, also agreed the outlook was promising for Thai rice in the second half, particularly with several rice-producing countries such as Pakistan, the world's third-largest rice exporter, suffering from floods and other disasters. He said parboiled rice shipments would especially benefit from India's continued ban on non-basmati exports. Thai rice prices, the benchmark for Asia, climbed to their highest level in two months last week as delayed planting has reduced supply. The Thai Rice Exporters Association increased the price of 100% grade-B white rice by 3.7% from a week earlier to $479 a tonne, while 25% broken rice rose 3.2% to $423 a tonne. Thailand this year had exported 4.9 million tonnes of rice as of Aug 18, down by 8.65% year-on-year, for a value of $2.93 billion, down 5.17%. The global rice trade is estimated at 30 million tonnes of milled rice for the 2009-10 season, a slight increase of 2.6% from the previous season.

Pakistan Rice Exports to Fall by 1 Million Tons After Flood Destroys Crop

Pakistan’s rice exports will decline by 1 million metric tons this year after flooding destroyed as much as 20 percent of the crop, according to a trade group. “We won’t need to import rice,” Malik Jahangir, chairman of the Rice Exporters Association of Pakistan, said in a telephone interview from Lahore today. “Our exports usually average 4.5 million tons and will be about 3.5 million tons this year.” Pakistan produces 6.5 million tons of rice a year.

Vietnam Commerce Ministry set to release rice stockpile

The Commerce Minister is planning to release its stockpile of more than 500,000 tonnes of rice to both exporters and millers as it foresees a suitable outofharvest season and lower production in Vietnam. A rice trader said the ministry agreed with the private sector's proposal to purchase the government's rice stock. The Foreign Trade Department will shortlist qualified exporters and millers for the purchase, and set a price that includes depreciation costs. The source also said that the authorities believe it is fair to allow both exporters and millers to make offers. "Though it is not open bidding, if offers are selected transparently, there will be no questions," the source said. Both exporters and millers are interested in purchasing all types of rice, including the white, jasmine, Pathum Thani and sticky varieties. The source added that releasing the government's stock would give Thailand a better supply of rice over the next few months even though the harvest season has ended. According to the Thai Rice Exporters Association, the country's total rice export volume dropped by 7.55 per cent to 4.86 million tonnes from January until August 9. The price of jasmine rice in the export market rose from US$1,008 to $1,017 (Bt31,818.50 to Bt32,110) per tonne; while the Pathum Thani variety rose from $779 to $787; 100percent rice from $462 to $479; and sticky rice from $996 to $1,005. A senior official said the ministry was planning to release its rice stockpile to the private sector as well as through governmenttogovernment deals. "We try to gradually reduce our rice stock but we don't want to break it as big news for fear of the price falling. We prefer to see offers that are marked to market cost," the official said, adding that the ministry planned to reduce as much of the stock as it can to make way for the crop that will be harvested in early November. The government is also considering proposals from other countries that want to import Thai rice via government to government deals.

Cambodia planning to sell rice to Philippines

Cambodia will send an informal trade delegation to the Philippines next month to secure deals for rice exports. The world’s biggest importer has announced that its rice production dropped more than 10 percent in the first six months compared with last year. Sun Kunthor, vice chairman of the Supreme National Economic Council, said the Cambodian delegation would seek to leverage the Philippines’ growing demand for the staple crop. “We will go to the Philippines soon, and we hope the Philippines will buy rice from Cambodia because the country’s rice demand is big,” he said. Sun Kunthor was among those involved in drafting the Kingdom’s new policies aimed at boosting rice production and exports. Philippine production of the food staple has fallen 10.2 percent in the first half of the year, compared with a year earlier, Manila announced Tuesday. Officials from the archipelago said dry weather caused by El Niño resulted in parched crops, and may require imports to make up for the fall in production. The Philippines is considering plans to boost imports, which have already hit a record 2.47 million metric tonnes this year. A formal decision would be made by Friday next week, said Philippines Agriculture Secretary Proceso Alcala. Production is expected to decrease further. Bureau of Agricultural Statistics Director Romeo Recide said Tuesday that output may fall another 25.6 percent in the third quarter, a dramatic increase from the 3.7 percent slump forecast in May. However, he said that production could rebound by 30.3 percent in the last three months of the year. Prime Minister Hun Sen highlighted Cambodia’s plan to increasingly tap the Philippine market when he unveiled the Kingdom’s new rice policy earlier this week. Government advisor in charge of trade promotion Sok Siphana will lead a delegation to the Philippines for “informal negotiations”, with the intent to later enter into formal discussion over shipments, he said Tuesday. “The government is adopting policies to turn to overseas markets in order to boost rice exports because in the future, rice exports may become a key sector for the leapfrogging of Cambodia’s economic growth,” Hun Sen said Tuesday. A source close to the prime minister, who asked not to be named, said the plan included a trade delegation expected to visit the Philippines next month. The prime minister said informal exploration of the Philippine rice market was necessary to better understand its needs. “We want to know what kind of rice the markets need so that we are able to provide them supply which meets their requirements,” he said. Last month, Philippine agribusiness investment officer Pablito Villegas who took part in his country’s first trade mission to Cambodia in July, told Philippine news outlet GMA News TV that domestic buyers were looking to purchase between 200,000 and 300,000 tonnes of Cambodian rice. According to the Kingdom’s new rice policy, the government is seeking to export at least 1 million tonnes of rice to international markets by 2015. The news also comes as rice exports from Pakistan, the world’s third-largest exporter, are expected to fall after extensive floods damaged crops in areas accounting for 90 percent of agricultural output. Pakistan was expected to export 3.8 million tonnes of rice this year, more than 10 percent of the estimated global shipments of 30.4 million tonnes, according to the Food and Agriculture Organisation, which made the forecast in July, before the flooding. Sok Siphana could not be reached for comment yesterday.