Monthly Archives: November 2014

Rice basmati, non-basmati weakens on subdued demand

Rice basmati prices softened at the wholesale market today owing to slackened demand against adequate supplies from producing belts.

Traders said easing demand amidst adequate stocks position mainly led to the decline in rice basmati prices.

In the national capital, rice basmati Pusa-1121 variety eased to Rs 5,150-6,100 per quintal.

Non-basmati rice permal raw, wand and IR-8 also ended lower at Rs 2,050-2,125, Rs 2,150-2,300 and Rs 1,900-1,925 as compared to previous levels of Rs 2,100-2,150, Rs 2,250-2,300 and Rs 1,925-1,975 per quintal respectively.

Following are today’s quotations (in Rs per quintal):

Wheat MP (deshi) 2,250-2,650, Wheat dara (for mills) 1,630-1,635, Chakki atta (delivery) 1,635-1,640, Atta Rajdhani (10 kg) 220, Shakti bhog (10 kg) 220, Roller flour mill Rs 860-880 (50 kg), Maida 920-925 (50 kg) and Sooji 1,050-1,060 (50 kg).

Basmati rice (Lal Quila) 10,400, Shri Lal Mahal 10,000, Super Basmati Rice 9,500, Basmati common new 7,000-7,500, Rice Pusa (1121) 5,150-6,100, Permal raw 2,050-2,125, Permal wand 2,150-2,300, Sela 2,650-2,700 and Rice IR-8 1,900-1,925, Bajra 1,100-1,105, Jowar yellow 1,300-1,375, white 2,300-2,450, Maize 1,275-1,300, Barley 1,560-1,570.

Agriculture dilemma: Helped by weather, ‘hurt by middlemen’

SUKKUR: Sindh’s rice growers were ecstatic after favourable weather conditions helped them achieve a bumper crop. However, their excitement has been short-lived as the handsome price it could have fetched has been eaten away by traders and middlemen, lamented the rice growers.

Last year’s price of paddy was fixed at Rs1,485 per 40 kilogrammes. But it went down to little more than Rs1,100 per 40kg, which farmers do not receive, as they are offered as low as Rs950 to 800 per 40kg

Sindh Abadgar Board President Abdul Majeed Nizamani, while talking to The Express Tribune, criticised the federal government, saying that policies are anti-agriculture and the lack of subsidies is hurting farmers.

He said that paddy was sown over 1.8 million acres in Sindh this year, adding that the region mostly produces non-aromatic rice, which is exported to less developed regions like Africa. Pakistan’s yearly rice export is around $2.5 billion and Sindh contributes a major share.

“Due to bumper crop of aromatic rice in Punjab and its low price, the Punjab government has provided Rs5,000 per acre compensation to its growers,” said Nizamani. “Why does the Sindh government not follow this example?”

According to him, most of the sugar mills in Sindh are owned by the government and they have not yet started crushing, due to which sugarcane growers are facing financial hardships as well.

Speaking about the horticulture sector, Nizamani said that under free trade, the government imported Indian tomato, which inflicted heavy losses to growers in Sindh.

“We have achieved bumper crop for onions in Sindh,” he said. “So why isn’t the government exporting these onions to India?”

He added that vegetable imports from India are directly hurting the local farming industry. Nizamani urged the federal government to take action and regulate imports in order to facilitate local growing.

Sindh Abadgar Board Kashmore General Secretary G M Khoso said that the government and its policies are ruining the agricultural sector. “Majority of the landlords and industrialists are sitting in parliament, carving anti-grower policies,” he said.

“Subsidy should be given to growers.”

Experts call for floating-rice preservation despite low yield

ietNamNet Bridge – Experts believe that restoring and developing deepwater rice needs to be done urgently to conserve genetic resources and biodiversity, and adapt to climate change.

he average floating rice yield is just 100 kilos per 1,300 square meters, while the profits are modest, just VND500,000-600,000 after six months of farming.

However, scientists say the floating rice should be developed because it can help create flood storage space, ease the pressure on dykes, cope with climate change, return the habitat to a wide variety of freshwater fish, and prevent floods and salinity intrusion.

Dr. Le Cong Quyen from the An Giang University said he could see the high biodiversity in the number of plant and fish species found in deepwater rice fields.

Quyen said 49 plant and 35 fish species have been recognized, including rare and valuable ones in the fields.

Dang Thi Thanh Quynh from the An Giang University’s Rural Development Center said if growing alternate deepwater rice and non-rice crops (cassava, for example), farmers would get relatively high profits. Farmers can also benefit from aquatic creatures, because fish like gathering in deepwater rice fields.

Dr. Nguyen Van Kien from An Giang University said deepwater rice production generated very durable straw needed to grow plants.

The straw can cover farming soil for six to seven months, while the straw from other high-yield rice varieties lasts only two or three months.

Kien also believes that deepwater rice can help farmers improve their incomes. The fields could be attractive to tourists as deepwater rice is grown in the flooding season for at least a month, attracting fish species.

Trang Thi My Duyen, who is conducting a survey on tourism potential in deepwater rice areas, said 90 percent of 100 Vietnamese and foreign tourists visiting An Giang province said they had never experienced agro-tourism and 92 percent said they were willing to take tours of this kind.

Ninety-one percent of the polled tourists said they would book tours to visit deepwater rice areas and taste local food.

Dr. Duong Van Chin, director of the Dinh Thanh Agriculture Research Center, an arm of the An Giang Plant Protection JSC, noted that tours can be organized in the flooding season and rice harvesting season to attract foreign travelers.

“Foreign travelers will find it interesting to harvest, husk and then cook rice for their lunch,” Chin said.

In Tri Ton district in Kien Giang province, a 200-hectare deepwater rice conservation area is planned in 2015-2016, while local authorities hope to have a stable deepwater rice production area of 500 hectares by 2030.

Customs sues another top rice importer for smuggling

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The government has sued one of the country’s top rice importers for smuggling.

In a statement, the Bureau of Customs (BOC) said it filed before the Department of Justice (DOJ) today four separate complaints against officials of Starcraft Internaional Trading Corp and its licensed customs brokers.

Sued were Starcraft president Jeffrey Daradal, board directors Eugene Pioquinto, Aveleo Godoy, Anna Orqueta, Brendel Daradal and Jessie Bantula, as well as company representative Hanlie Solema for violating Section 3601 of the Tariff and Customs Code of the Philippines and Section 29 of Presidential Decree (PD) Number 4, as amended by PD No 1485.

The BOC also sued 12 customs brokers, namely Denise Kathryn Rosaroso, John Kevin Cisneros, Emilio Chio, Eduardo Borje III, Rosemarie Arciaga, Gerald Villarosa, Jennifer Ann Reyes, Elbert Lusterio, Dianne Re Dizon-Tapia, Laila Silvestre, Francis Rudolph Forneste and Kenneth Quial.

Violation of Section 3601 of the Customs Code carries a maximum sentence of 10 years in jail and a fine of P50,000. PD No. 4 metes out a penalty of four years imprisonment and a fine of P8,000.

According to BOC, Starcraft smuggled into the country 45,000 metric tons of rice worth P1.8 billion. The contraband was sneaked into the country through the ports of Manila, Cebu and Davao between June and November last year.

The shipments came from Vietnam, Thailand, China and Singapore.

Citing National Food Authority (NFA) records, Customs said Starcraft had a license to import only 1,176 metric tons through Manila, thus the excess shipment was tantamount to exceeding the NFA’s minimum access volume (MAV) by more than 3,700 percent.

The MAV is a quota that restricts the quantity of imports to support domestic growers. The World Trade Organization (WTO) allows such quotas provided that countries that stand to lose from these restrictions are granted concessions.

Starcraft had countered Customs’ confiscation of the contraband by filing cases wherein it argued that the MAV already expired in 2012 after the government’s failure to renew the quota. The Philippines had sought WTO approval of the quota extension.

“Our laws were not changed. Import permits for rice were still required. Starcraft cannot unilaterally interpret the laws by itself. Regulation of rice is critical because millions of farmers’ livelihoods depend on rice farming,” said Customs Commissioner John P. Sevilla.

Starcraft is among the country’s top five rice importers. Data from BOC show that Starcraft, along with Intercontinental Grains International Trading, Bold Bidder Marketing, Silent Royalty Marketing and Medaglia De Oro Trading, cornered a combined 75 percent of the 200,000 metric tons of rice imported without NFA permit last year (see chart below).

If rice production is so high, why do prices keep rising?

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Since the Department of Agriculture launched the Food Staple Sufficiency Program to boost local rice production to meet 100 percent of domestic requirements by 2013, the country’s rice self-sufficiency has risen from 88 percent in 2011 to 93 percent this year, according to the Philippine Rice Research Institute (PhilRice).

Yet, despite this, prices have still surged from P32 per kilo in 2012 to P43 this month even with international prices of rice remaining “relatively stable,” and a slight decrease in per capita rice consumption — from 119 kilos in 2008-2009 to 114 kilos in 2012 — according to PhilRice.

There are reasons for this, which researchers and academics from PhilRice and the University of the Philippines Los Baños enumerated at a forum organized by the National Academy of Science and Technology at the La Breza Hotel in Quezon City Thursday.

Rice is the staple food of 80 percent of the 100 million Filipinos, according to a study done by UP Los Baños College of Economics and Management dean Dr. Isabelita Pabuayon and associate professor Dr. Agham Cuevas.

The Philippines’ consumption per person per year is lower than other countries in Southeast Asia (228 kilos for Myanmar, 215 kilos for Vietnam, and 140 kilos for Thailand), but higher than the global average of 65 kilos.

Here, rice is used for food, animal feed, and processing.

The grain is grown by 2.4 million farmers on average farm sizes of 1.14 hectares, earning a net farm income of P22,000 per hectare per cropping season.

Middlemen between the farmers and the consumers incur marketing costs, as they take care of transportation, storage, processing, packaging, and retailing, among others. These costs, added to the profit they need to make, affect prices, Pabuayon said.

The Philippines also imports rice, though this has decreased over the past three years — from one million metric tons in 2011 to 365,000 metric tons in 2013. This year, however, the country was forced to import 1.4 million metric tons, she said.

Global rice prices increase at about four percent annually. In 2008, during the rice crisis triggered by demand rising faster than the supply, global rice prices hit $700 per metric ton, finally settling at $523 in 2010-2014, Pabuayon said.

High income growth and increasing population affected demand, while weather disturbances and dwindling stocks affected supply, in 2008. The price increase was also tied to increased prices of wheat, corn, and oil.

But the more influential factor, she said, was government policy among key players like the Philippines, which is among the top ten importers and producers in the world.

In 2008, a panic-stricken Philippine government agreed to pay higher than the prevailing world prices and contracted huge amounts for import. In turn, suppliers decreased the volume they brought to the world market, leading to an even bigger increase in prices.

Pabuayon doubted that current global prices can be lowered to pre-12008 levels, which hovered around $300 per metric ton from 1980 to 2007.

In the Philippines, where rice prices are around 50 percent higher than world prices, there has been a six percent increase in rice prices annually from 1990 to last year.

Pabuayon said there is a link between Philippine prices and the stocks kept by the National Food Authority (NFA).

“(W)e probably did not import sufficient amounts to enable us to maintain our price level,” she said, noting that NFA stocks have been declining since August 2011.

PhilRice senior rice research specialist Dr. Flordeliza Bordey explained that the stocks NFA maintains can be used two ways: as a buffer stock the government can give out as aid during calamities, and as an instrument to stabilize rice prices when the threat of increases looms.

Used for the latter purpose, it prevents the private sector from arbitrarily jacking up rice prices because the NFA will be ready to unload its stocks into the market as soon as prices get too high.

The greater the stocks held by the government, the more stable the prices, said Bordey.

A government inter-agency planning committee makes sure the country has enough rice to last through the lean months from July to September. The committee then recommends a certain volume of imports to the NFA just in case there is a shortfall.

However, this recommendation is not always heeded, noted Bordey.

In July last year, for example, the imported stocks were just good for 20 days instead of three months.

When the number of days the stocks last decrease, it is no surprise that rice prices increase, she said.

The Food Staple Sufficiency Program prescribes a certain amount to be imported should a shortfall occur, but the government imported less than what was required because of the “political nature of importation,” according to Bordey.

“Every time NFA announces that it will be importing, it seems to be seen as the end of the world. People complain, ‘Can’t we feed our citizens ourselves?’ It is as though importing rice is such a grave sin,” she said.

The issue became even more charged when President Benigno Aquino III declared rice sufficiency as one of his major policy directions.

“We cannot really target self-sufficiency and low prices at the same time. You have to choose one (or the other). The key to this balancing act is the priorities really of our government. Right now it seems we are at the self-sufficient but high-price phase,” Bordey remarked.

PhilRice executive director Eufemio Rasco cautioned against importing, however, given that in essence, the Philippines was importing labor as well, despite the unemployment in the country itself.

He also countered the popular belief that the Philippines was “kulelat” (doing badly) compared to its rice-producing neighbors, Thailand and Vietnam.

“If we are so good, why are we importing? The answer is in mathematics.”

Thailand and Vietnam have larger areas of land for cultivation and smaller populations, and have river deltas that serve as natural irrigation.

The archipelagic nature of the Philippines, weather, transportation, and infrastructure are other factors.

“It’s a miracle that we achieved 96 percent rice sufficiency,” Rasco said, referring to the number Pabuayon gave for last year’s performance.

“We are good, but they have natural endowments we don’t,” he added.

Rasco also stressed that the issue really revolved around the rice farmers.

Even in the best of times, they do not earn enough. Alternative sources of income for them should be looked into, he said.

Kakinada anchorage port to become rice export hub

The Anchorage Port in Kakinada has the potential to become rice export zone, provided the government focuses on developing infrastructure and facilities in the port, besides relaxing some norms pertaining to the exports.

As the East and West Godavari districts are known for paddy procurement and record yields every year, the surplus paddy is being exported to foreign countries through the anchorage port. Following the lifting of ban on rice exports in September 2011, there is a steady increase in rice exports and the exporters are focusing more on the African countries.

In 2012-13, 26.73 lakh metric tonnes of rice had been exported from the port. However, the year 2013-14 witnessed a drop in the export activity due to Samaikyandhra movement that lasted for over three months. The exports were to the tune of 22.67 lakh metric tonnes during the year.

Now, the government has changed the levy policy, providing an opportunity to improve the exports. Till the last crop season, the rice millers used to allocate 75 per cent of the rice purchased to the government towards the levy and sell the remaining 25 per cent in the open market that includes the exporters.

As per the revised policy, the levy is only 25 per cent and the remaining 75 per cent of the stocks can be sold in the open market. “This policy is going to be a boon for rice exports over a period of time. Moreover, it is going to be a win-win for both the farmer and the miller,” observes B.V. Krishna Rao, managing director of Pattabhi Agro Foods, one of the largest exporters of non-Basmathi rice from southern India.

East Godavari district alone produces 20-25 lakh metric tonnes of paddy every year and the West Godavari contributes more or less an equal quantum. Till now, the farmers are used to cultivate levy-oriented varieties such as ‘Common’ and ‘Grade A’ and the millers too encouraged the same, as they can clear a major chunk of stocks towards the levy. “Now, the farmers can focus on cultivating superfine variety of rice, which has a greater demand in the European market. By opting for these varieties, the farmers can earn more without increasing the investment and the millers and exporters too can get their margins,” explains Mr. Krishna Rao.

Echoing similar opinion, progressive farmer Kovvuri Trinadh Reddy says the government should come out with a clear policy on the levy and create awareness among farmers about the new cultivable varieties. “The farmer will get benefited only when the government ensures hassle-free export of rice,” he says.

Exports in limbo

It would be a mistake to dismiss the 5 per cent decline in India’s exports for October 2014 as a temporary blip. Not only have the exports steadily lost momentum from their 12 per cent growth in May this year, the slowdown is getting more broadbased, with half the items on the export list registering declines in October. Given the structural factors that contribute to the decline, we need active policy intervention to arrest it.

India’s export competitiveness has been eroded by three factors in recent months. One, the rupee’s relative strength against the dollar this year, which has put Indian exporters on the back foot on pricing. Two, the sharp fall in global petroleum and agri-commodity prices has pruned export realisations in these critical sectors. After booming for many years, commodities now seem to be entering a prolonged bear market — a worrying prospect since these have been the two fastest growing segments of Indian exports over the last five years, making up 35 per cent of total export revenue. And three, India’s continuing high interest rates, which contribute to a high domestic cost structure. Recently, Europe and Japan have eased rates further to deal with their weakening economies and China has begun a new round of stimulus to kick-start growth. Given this it is clear that the problem of slowing exports needs structural solutions. In agri-commodities, global price declines cannot be offset through short-term props such as one-time export subsidies. Instead, we need to explore new markets for large farm exports such as basmati rice, oilmeal and tea, which are currently over-reliant on a few regions (Iran, Russia). With inflation waning, policymakers should desist from imposing ad hoc export limits, minimum export prices and registration requirements on farm products. These have made India an unreliable trading partner in the global agricultural trade. Falling global commodity prices, on the other hand, make this an opportune time to change its export mix in favour of value-added manufactured goods. Segments such as auto components, engineering goods, textile products, chemicals and pharmaceuticals have shown traction in recent years. Demands from these exporters for procedural simplification and better inter-ministerial coordination can be met through technology. Beefing up port infrastructure, incentives for industrial R&D and investments in re-skilling and technology upgradation can provide a long-term boost to manufacturing exports.

Recent data shows that the Centre cannot afford to procrastinate any longer over the notification of its new foreign trade policy. The expiration of the earlier policy in March this year has put exporters in a limbo, with incentives such as the 3 per cent interest subvention scheme being discontinued. Given the challenges exporters face, the interest subvention scheme should be reinstated without further delay. The annual outgo of ₹1,500 to 1,700 crore on the scheme is surely not a big price to pay, given the unfolding crisis in Indian exports.

Govt to facilitate Iranian rice importers: minister

Federal Minister for Commerce Khurram Dastagir has said that the government would provide all necessary assistance to the Iranian rice importers to enhance export of rice and other food commodities.

The delegates apprised the minister about the prospects of Pakistani rice in the Iranian market. Pakistan produces fine quality of rice and could cater to huge demand of rice in the Iranian market, said Iranian Rice Importers Association (IRIA) delegation during their meeting with the minister, following their interactive meetings and field visits to the various rice units in Punjab.

A spokesman of Trade Development Authority of Pakistan (TDAP) said that during their interactive sessions with the representatives of Rice Exporters Association of Pakistan (REAP), the stakeholders discussed potential of exploring new opportunities of rice import from Pakistan. They also visited PCSIR Laboratories in Lahore where they were apprised about the facilities available with with regard to rice standardisation and other health related issues of rice. The delegates discussed with the rice experts about various precautionary measures and food safety mechanisms on rice. They also attended rice exporters’ conference which was addressed by Punjab Minister for Agriculture Dr Farrukh Javed.

Dr Javed said during their meeting with the banking authorities the delegates raised the intra-banking transaction issues between the two countries and emphasised to sort out an amicable payment mechanism. Rice Exporters Association of Pakistan hosted a dinner in honour of the Iranian delegation which was attended by a large number of leading rice exporters and prominent businessmen. Pakistan being the fourth largest exporter of rice in the world has the potential to increase the graph of rice export to Iran.

The Iranian delegation’s visit was facilitated by the Trade Development Authority of Pakistan.

DIP increases rice buying price to 13,000 baht a ton for farmers in Kanchanaburi

Rice farmers in Kanchanaburi are earning better income from their produce as a result of the Department of Internal Trade (DIT)’s policy on sustainable rice management program, in which farmers will be given 13,000 baht for a ton of fragrant rice with 15% humidity.

DIT Director-General Boonyarit Kalayanamit revealed that the province has already signed a memorandum of understanding to that effect with local rice mills and is piloting the project in Phanom Thuan District.

So far, 900 farmers have subscribed to the project. Part of the rice sold to the project will be packed under the brand “Kao Hom Kan” and sold at various DIT’s Farm Outlets including those in shopping malls, governmental buildings, markets, Blue Flag fairs as well as in Ranong Province before expanding to other provinces of Thailand.

According to the Director-General, the new price will increase income of the farmers in the province and encourage them to improve the rice quality. The project will be expanded to other provinces in order to lift the farmers’ quality of life across the country.

Vast opportunities exist in exports of rice, fruits to Iran

Pakistani agricultural commodities especially rice, kinnow, potato and mango are in high demand in Iranian markets thus offering huge potential to increase exports of these commodities manifold between the two neighbouring countries. The Punjab government is taking many steps for enhancing the bilateral trade especially export of agricultural commodities to Iran which include steps to save these commodities from pests and different diseases in line with the international standards.

This was disclosed by the Punjab Minister for Agriculture Dr Farrukh Javed while addressing ‘Rice Exporters Conference’ held here on Thursday. The conference was also participated by a 14-member Iranian trade delegation and Iranian Consul General to Lahore Agha Bani Asadi. The Iranian delegation includes Iranian members of the parliament Dr Fatahi, Dr Abidi and Dr Tameeni, rice importers and agricultural experts while conference was also attended by the Rice Exporters Association of Pakistan (REAP) members including Pir Nazam Hussain Shah. Rice Research Institute (RRI) Kala Shah Kaku Director Dr Akhtar, Dr Ashfaq and Deputy Food Commissioner Dr Waseem also participated in the conference.

The Punjab Minister said both Iran and Pakistan were enjoying brotherly relations and also gave importance to increasing bilateral trade. He said that Iranian agricultural experts were welcomed in the fields and orchards of Punjab province to explore the potential of enhancing trade of agricultural commodities. Dr Farrukh Javed stressed the need for installing quarantine set-up at Pak-Iran border to allow agricultural commodities import and export after proper inspection according to hygiene principles.

He said only healthy citizen could play their role in the development and progress of the country and bringing agricultural production in line with principles of health we could not only meet food requirements but also promote a healthy society. Iranian Consul General Agha Bani Asadi speaking on this occasion said that he is advocate of strong and durable relations with Pakistan and trade of agricultural commodities could play an important role in strengthening brotherhood bond between the two nations. Members of the Iranian Parliament speaking on this occasion expressed their pleasure on visiting Lahore and said they enjoyed Pakistani hospitality a lot. Iranian delegation is on a three-day visit to Pakistan during which they met government representatives, exporters and also visited different rice mills and allied industrial wings.