Monthly Archives: December 2014

Myanmar May Export Over 1.5 Million Tons of Rice in FY 2014-15; Up 25% from Last Year

Myanmar is expected to export more than 1.5 million tons of rice in FY 2014-15 (April – March), up about 25% from around 1.2 million tons exported last year, the Myanmar Rice Federation (MRF) Joint Secretary was quoted as saying to local sources.
Myanmar exported around 799,600 tons of rice in the first eight months (April – November) of FY 2014-15, up about 75% from around 455,800 tons exported during the same period last year, according to local sources.
The South East Asian nation’s rice exports slowed down significantly between August and November this year after China had officially banned rice imports through Myanmar’s northern borders. Though rice exports through the northern borders is considered to be legal from Myanmar’s point of view, Chinese authorities have been treating these cross border imports as illegal as there is no formal rice export agreement between China and Myanmar. China is also understood to have promised to lower border tax on imports from Myanmar.
Myanmar government had held talks with the Chinese authorities to chart a formal trade agreement between the two countries. In November, on the sidelines of the ASEAN summit, the Chinese Premier promised to import one million tons of rice from Myanmar in 2015 as well as legalize imports through borders.
The MRF Joint Secretary noted that the Chinese authorities began loosening controls on rice imports from Myanmar borders since mid-November though they have not publicly explained the patch up. He added that exports to China have been picking up since then and he expects more exports to China in the next three months of this financial year. Myanmar is likely to export 200,000 tons of rice formally to China this month. Of this, 100,000 ton would be exported through the borders and remaining would be exported through the sea.
He also told local sources that exports to European and African destinations have also increased considerably. The government is also negotiating with the governments of many other countries to expand its export market. He added that negotiations with Sri Lanka had completed recently. The Myanmar government is keen on increasing rice exports to around 3 million tons in the next few years and is planning to prioritize rice in its National Export Strategy, which is likely to be released in January 2015.
USDA estimates Myanmar to produce 18.98 million tons of paddy rice (around 12.15 million tons, milled basis) and export around 1.4 million tons of rice in MY 2014-15 (January – December 2015)

Thai military government approves sale of 247,000 tonnes of rice

Thailand’s military government approved the sale of 247,000 tonnes of rice in an open tender on Monday, part of its continued effort to offload rice from huge stockpiles accumulated under the previous regime.

The sale was the fourth by the current government, which ousted its predecessor in a May 22 coup following months of political unrest.

The government of Prime Minister Prayuth Chan-ocha, who led the May coup, has been struggling to offload some 17 million tonnes of rice in state stockpiles built up under the previous government’s state-buying programme.

The state-buying policy won electoral support in Thailand’s agrarian heartland but caused the country losses estimated at $15 billion.

Banjongjit Angsusingh, deputy director-general of the foreign trade department at the Commerce Ministry, which oversees rice stock sales, said the sale attracted bids from some 30 traders, including rice exporters and domestic retailers.

Three kinds of grain, including glutinous and white rice, were offered at the tender, in which 21 private companies bid successfully, Banjongjit said, with stocks coming from 52 state warehouses.

The ministry had offered nearly 400,000 tonnes of state rice stocks for sale. Banjongjit said the ministry was confident it could sell the remaining stocks and that some offers had been below the government’s minimum floor price.

“Some bidders bid below the base price but we are confident we can sell the full 390,000 tonnes,” Banjongjit told reporters. She said the ministry was pleased with the results of the tender.

The ministry did not reveal the sale price.

The price of common grade Thai 5-percent broken rice was quoted at $413 to $415 per tonne on Monday. The similar Vietnamese grade was at $390 to $395 per tonne.

On Friday, China signed a memorandum of understanding to buy two million tonnes of rice from Thailand on the sidelines of a regional summit in Bangkok.

This deal could ease pressure on the government to offload the stockpiles.

Prayuth told reporters last week Thailand would reclaim its former position as the world’s number on rice exporter in 2015 and the stockpile, only a tenth of which is of standard quality, would be sold within the next three years.

The latest state audit found that around 70 percent of the rice held in stockpiles is deteriorating.

Banjongjit said a remaining 150,000 tonnes of rice not sold at Monday’s tender would be offered in a new tender but did not disclose a new bidding date.

Thailand set to reclaim top rice exporter title

Thailand this year is certain to reclaim its crown as the world’s largest rice exporter, with volume reaching 10.7 million tonnes, valued at US$5.2 billion (Bt170 billion).

The expected comeback will result from the end of excessive prices under the previous rice pledging scheme, and huge rice stocks on hand.

With continued high-end stocks, and anticipated lower rice production in the world market next year, the Kingdom is expected to ship up to 10.5 million tonnes in 2015.

In 2013, Thailand lost its position as the world’s leading rice exporter, with a total of 6.9 million tonnes in shipments.

According to the Thai Rice Exporters Association, as of December 9 this year, the volume of rice shipments had reached 10.27 million tonnes, growing by a significant 66 per cent year on year.

The Foreign Trade Department also reported that rice shipments in the first 11 months reached 9.8 million tonnes, a 66-per-cent surge, while export value reached Bt156.43 billion, rising by 29.5 per cent. In terms of US dollars, export value rose 21.7 per cent to $4.87 billion.

About 1.06 million tonnes was exported under government-to-government or government-to-private contracts.

In the first 11 months of this year, India was the world’s second-biggest rice supplier, shipping 8.7 million tonnes, followed by Vietnam at 6.8 million tonnes, Pakistan at 3.2 million tonnes, and the United States at 2.7 million tonnes.

Duangporn Rodphaya, director-general of the Foreign Trade Department, said Thailand was expected to ship larger volumes of rice this year and throughout next year, as global production is down, while Thailand has the ability to ship large amounts from its stocks.

Duangporn said Thailand should maintain its status as the world’s largest rice exporter next year on lower output in many countries. Many rice-producing countries have been affected by the El Nino weather phenomenon and drought, while demand remains high.

The US Department of Agriculture reported that the world’s stocks of rice would be lowered from 106.8 million tonnes this year to 99.1 million tonnes in 2015. Global rice production would be down slightly from 476.9 million tonnes to 475.2 million tonnes. Demand for rice would increase from 480.2 million tonnes to 482.9 million tonnes, while total trade volume would be unchanged at around 41.9 million tonnes this year and next.

Currently, Thailand has about 17.7 million tonnes of rice in government stocks.

Duangporn said the government would continue to sell rice from the stockpiles next year. As part of its plan to clear up rice stocks, the Commerce Ministry will consider new methods, such as selling the entire stock to traders directly. This may cut government losses from quality deterioration in the warehouses, she said.

The department reported that many rice traders queued at the Commerce Ministry yesterday to join in the fourth rice auction of the year. The ministry was able to sell about 247,000 tonnes immediately from a total volume of 398,000 tonnes on offer because traders bid good prices.

Of the 34 traders, 21 offered bids above floor price, so the department decided to sell to them. For the remaining amounts, a working committee will ask bidders to raise their offers higher and the department will decide again whether to sell the rice at those new price levels. The next rice auction will open in the new year.

From this year’s four auctions, the ministry was able to release about 460,000 tonnes of rice.

Cambodia May Not Reach One Million Ton Rice Export Target in 2015

Lack of sufficient milling capacity and funding are major hurdles for Cambodia to achieve one million ton export target by 2015, according the country’s Prime Minister, report local sources.
Based on the current pace of rice exports so far this year, the Prime Minister noted that is unlikely for the country to meet the one million ton rice export target by 2015. He reminded that the government set the target in 2010 but had been improving the rice milling and storage facilities, which are crucial to enhance rice exports in the country.
The Prime Minister was quoted as saying that the government had failed in attracting investment in rice milling facilities. He noted that the current milling capacity is far below the production level. The government does not dare to procure more rice from farmers for export due to lack of sufficient storage facilities. Due to this, Cambodia is losing most of the export orders, he said. The PM also noted that farmers are forced to sell their paddy output to traders. Most of the rice traders are understood to sell rice informally to Vietnam and Thailand rice traders accounting for a huge amount of informal rice exports.
However, based on data from the Council Development for Cambodia (CDC), he expressed optimism that a number of approved investments in rice milling facilities are in pipeline and once completed may give Cambodia an advantage in expanding its export capacity.
The President of the Cambodia Rice Federation (CRF) also supported the PM’s view regarding Cambodia’s rice export target. However, he stated that the CRF has been striving to improve the country’s rice infrastructure. He added that the CRF is also considering additional loans to procure rice and stock in large amounts to ensure uninterruptable supplies for exports. He said the CRF is planning to bring the export figure next year close to the target even if it
cannot meet it. The CRF is reportedly exploring new export markets for its rice to help the country reach its export target.
A recent report by the Asian Development Bank (ADB) also highlighted the need for enhancing rice milling and storage facilities to increase the competitiveness of the country’s rice sector.
The recently launched Cambodia’s first large-scale paddy rice bank is expected to ensure uninterrupted supplies to millers and exporters. The Chinese government is also understood to have approved financial assistance of about $300 million to help Cambodia enhance its rice infrastructure such as warehouses and post-harvest facilities.
Cambodia exported around 335,925 tons of rice in the first eleven months of 2014, up about 1% from around 332,009 tons exported during the same time last year, according to the Secretariat One Window Service (SOWS-REF) under the Ministry of Trade.

Vietnam Foresees Stiff Competition in 2015 for G2G Rice Sales

Vietnam’s rice exports to the concentrated or G2G markets, to which Vietnam sells rice under government-to-government (G2G) deals, are expected to decline in 2015 due to an expected stiff competition between the top rice exporting countries including Thailand and India, according to local sources.
Vietnam normally sells rice under G2G contracts to China, Malaysia, Indonesia and the Philippines. Demand from these three countries is likely to reach around 2.5 million tons next year, but none of them has so far signed contracts with the Vietnamese rice exporters, said the Director General of Vietnam’s state-owned rice exporter Southern Food Corporation (Vinafood 2).
He told local sources that they are expecting lesser orders next year due to a strong competition in the market. He noted that they are particularly concerned of Thailand who is likely to offload huge amount of stocks from the government warehouses into the market next year.
The official said it is difficult to predict next year’s target exports particularly because of the instability of the Chinese market. Vietnam had been relying too much on China for the last couple of years. But it is understood that China has agreed to buy around 2 million tons of rice from Thailand and around 1 million tons of rice from Myanmar next year.
An official from the Vietnam Food Association (VFA) added that Vietnamese exporters have not been able to clinch any deals with African countries, which import nearly 14 million tons of white rice annually. Vietnam could not penetrate East African market and has very little presence in West African countries like Ghana and Ivory Coast. He noted that too many varieties of rice varieties within the common white rice market is diluting Vietnam’s rice competitiveness.
Rice export prices in all the top exporting countries have been declining for the last couple of months due to increasing supplies from ongoing harvests and increased competition. Export prices of Viet 5% broken rice currently stand at around $390 per ton, down about 10% from around $435 per ton in the first week of November. Similarly prices of Thai 5% rice declined about 2.4% to around $410 per ton, India 5% rice declined about 6% to around $390 per ton and Pakistan 5% rice declined about 6.25% to around $375 per ton during the same period.
Vietnam is targeting to export around 6.5 million tons of rice in 2014. It has exported around Vietnam exported about 5.961 million tons of rice in January 1 – December 18, 2014, according to the VFA. It exported around 6.71 million tons of rice exported in 2013.

Thailand Approves Sale of About 250,000 Tons of Rice in Auction

The Thai Commerce Ministry has approved to sell around 273,295 tons of rice worth 2.22 billion baht (around $67.5 million) in today’s auction to about 23 traders, according to Bloomberg.
The Ministry has offered around 400,000 tons of rice, including around 330,000 tons of broken white rice, around 52,000 tons of glutinous rice and 18,100 tons of white rice, in the auction.
According to the initial result from the Department of Foreign Trade, 15% broken white rice was offered at 11,230 baht per ton (around $341.69 per ton). Bidding price for 25%-broken white rice was between10,810 – 11,330 baht per ton (around $328.91 – $344.73 per ton); bidding price for 10%-broken glutinous rice was between 13,200 – 15,100 baht per ton (around $401.63 – $459.44 per ton); and bidding price for A1 broken rice was between 6,355 – 8,350 baht per ton ($193.36 – $254.06).
Official result needs to be approved by the Chairman of the Rice Policy Management Committee. It is understood that the Ministry will ask bidders to re-submit their bids for the remaining rice offered for sale as their proposed prices were below expected. The date of the bid is not decided yet.
According to Reuters, Thailand has approved sale of around 247,000 tons of rice to 21 bidders; and according to Dow Jones report, Thailand has approved sale of around 250,000 tons for 21 bidders.
Thailand sold around 348,000 tons of rice worth 3.6 billion baht (around $81 million) in the last three auctions. The government still has around 17.8 million tons of rice in its stockpiles. Of the stockpiled rice, around 16.7 million tons of rice are fit to be sold, the Thai Prime Minister was quoted as saying on last Friday after attending a meeting of the Rice Management and Policy Committee. He told local sources that around 2.1 million tons of rice was up to standard, around 14.4 million tons would need to be re-graded and around 6.94 million tons was spoilt or has no clear origin.
The Thai Rice Exporters Association (TREA) President noted that Thailand’s rice exports would reach around 10.2-10.5 million tons in 2014 and expressed confidence that the South East Asian nation would reclaim the world’s top rice exporter this year. Thailand exported around 10.07 million tons of rice between January 1 – December 2, 2014, up about 67% over 6 million tons exported last year.

Rice exporters expect weaker sales to G2G markets in 2015

VietNamNet Bridge – Vietnamese rice exporters say they are uncertain about export volume to the concentrated market (government-to-government, or G2G) in 2015 because of stiffer competition in the market.

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“We have sufficient information to predict demand in the G2G market in 2015,” said Huynh The Nang, general director of the Southern Food Corporation (Vinafood 2), one of the two most powerful rice exporters.

However, the market will be fiercely competitive because of the presence of strong rice exporters.

Nang said the Philippines, which has suffered from typhoon Hagupit, now has the demand for 600,000 tons of rice.

The country plans to invite bids in January 2015, though NFA, the country’s national food agency, has denied the possibility of importing more rice than was initially planned, because of Hagupit.

Some other markets including Malaysia and Indonesia have also announced their estimated demands.

It is expected that the demand from G2G markets, including the Philippines, may reach 2.5 million tons in 2015 (common white 5 percent, 15 percent and 25 percent broken rice).

Also, according to Nang, though Vietnamese rice exporters have received signs from importers about demands, they still have not obtained any contracts with considerable export volume for 2015.

“The demand is big. But whether we can sell rice will still depend on the competition between us and other exporters,” Nang commented.

Meanwhile, analysts warned that Vietnamese exporters should be aware of Thailand, a strong rival that now has a high inventory index.

An analyst said it is difficult to predict how much rice Vietnam will export in 2015 because of the instability of the Chinese market.

China is now Vietnam’s largest rice importer. However, according to Nguyen Dinh Bich, a renowned rice expert, China is also being eyed by Thailand and India.

“We have been relying on the Chinese market, but the market’s demand remains an unknown,” he said, adding that Vietnam will face big challenges in the short term and medium term with other exporters, especially in exporting common rice.

An official of the Vietnam Food Association (VFA) noted that the existence of too many rice varieties has reduced Vietnam’s rice competitiveness.

“In the common white rice market segment, for example, we offer at least 10 rice varieties. Meanwhile, some importers only accept rice with homogenous quality and variety,” he said.

The official noted that Vietnam has not been able to successfully exploit African markets which import 14 million tons of common white rice a year. It still cannot penetrate East African markets, and has only exported small volumes of rice to Ghana and Ivory Coast in West Africa.

State urged to boost rice sales

The government is being urged to improve selling procedures next year to ensure faster sales in order to keep pace with market requirements and to classify grain quality more clearly.
Prospective bidders inspect the quality of rice prior to the auction called by the Commerce Ministry yesterday. The ministry put up almost 390,000 tonnes, mainly broken rice, white rice and glutinous rice, drawing an active response from potential buyers. KITJA APICHONROJAREK
“Rotten rice stocks should be eradicated to let the market know the exact amount of the government’s rice stocks. This will affect rice prices and eventually lead the market to return to normal,” said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
“Given the massive volume held by the government, the chance for prices in the market to increase by US$50-100 a tonne would be difficult.”
He said the overall market was expected to remain tight in 2015 due to anticipated higher supplies by other rice-producing nations such as Vietnam and India.
Mr Chookiat predicts Thailand will export 10 million tonnes next year.
The Commerce Ministry forecasts Thailand will ship 10.7 million tonnes this year, a surge of 60% over last year, with value up by 29% to $5 billion.
Of the total, the government has shipped 1.06 million tonnes including 230,000 tonnes sold to China.
The Commerce Ministry targets exports of 10.5 million tonnes worth $5.2 billion in 2015. Next year’s production is estimated at 35 million tonnes of paddy or 22 million tonnes of milled rice, down from 37 million tonnes and 24 million tonnes this year, respectively.
Prime Minister Prayut Chan-o-cha, who chairs the National Rice Policy Committee, last Friday said the government had vowed to dispose of the 17 million tonnes left in its stockpile over the next two or three years through domestic sales as well as exports.
The government could sell the stocks on both a whole-warehouse and a stack basis and plans to beef up local sales.
The committee also acknowledged the recent audit of state rice stocks, which counted 17.8 million tonnes, although that included 400,000 tonnes already sold and 390,000 tonnes missing.
Of the 17 million tonnes still present, 2.35 million were found to be of good quality, 14.4 million substandard and 694,000 rotten.
Rice-subsidy schemes covering 15 harvests since 2004 have resulted in losses of 680 billion baht from total costs of 1.1 trillion used to buy 85 million tonnes of paddy.
The subcommittee inspecting the accounting of several governments’ rice-subsidy schemes earlier revealed that of the 15 programmes, four were rice-pledging schemes initiated by the Yingluck Shinawatra government with total losses of 518 billion baht.
The Commerce Ministry yesterday put up almost 390,000 tonnes for the fourth auction, mainly broken rice, white rice and glutinous rice, drawing an active response from potential buyers.
Duangporn Rodphaya, director-general of the Foreign Trade Department, said the government yesterday agreed to sell 247,000 tonnes from 52 state warehouses to 21 buyers.
The ministry sold a combined 348,836 tonnes in the first three auctions, raising 3.6 billion baht.
Ms Duangporn said the Commerce Ministry was committed to selling the state rice stocks on a continuous basis until next March before new supply from the second crop entered the market.

Cambodia May Not Reach One Million Ton Rice Export Target in 2015

Lack of sufficient milling capacity and funding are major hurdles for Cambodia to achieve one million ton export target by 2015, according the country’s Prime Minister, report local sources.
Based on the current pace of rice exports so far this year, the Prime Minister noted that is unlikely for the country to meet the one million ton rice export target by 2015. He reminded that the government set the target in 2010 but had been improving the rice milling and storage facilities, which are crucial to enhance rice exports in the country.
The Prime Minister was quoted as saying that the government had failed in attracting investment in rice milling facilities. He noted that the current milling capacity is far below the production level. The government does not dare to procure more rice from farmers for export due to lack of sufficient storage facilities. Due to this, Cambodia is losing most of the export orders, he said. The PM also noted that farmers are forced to sell their paddy output to traders. Most of the rice traders are understood to sell rice informally to Vietnam and Thailand rice traders accounting for a huge amount of informal rice exports.
However, based on data from the Council Development for Cambodia (CDC), he expressed optimism that a number of approved investments in rice milling facilities are in pipeline and once completed may give Cambodia an advantage in expanding its export capacity.
The President of the Cambodia Rice Federation (CRF) also supported the PM’s view regarding Cambodia’s rice export target. However, he stated that the CRF has been striving to improve the country’s rice infrastructure. He added that the CRF is also considering additional loans to procure rice and stock in large amounts to ensure uninterruptable supplies for exports. He said the CRF is planning to bring the export figure next year close to the target even if it
cannot meet it. The CRF is reportedly exploring new export markets for its rice to help the country reach its export target.
A recent report by the Asian Development Bank (ADB) also highlighted the need for enhancing rice milling and storage facilities to increase the competitiveness of the country’s rice sector.
The recently launched Cambodia’s first large-scale paddy rice bank is expected to ensure uninterrupted supplies to millers and exporters. The Chinese government is also understood to have approved financial assistance of about $300 million to help Cambodia enhance its rice infrastructure such as warehouses and post-harvest facilities.

Cambodia exported around 335,925 tons of rice in the first eleven months of 2014, up about 1% from around 332,009 tons exported during the same time last year, according to the Secretariat One Window Service (SOWS-REF) under the Ministry of Trade.

Burma’s rice exports, production up in 2014: FAO

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Despite a global drop in rice production in 2014, Burma increased cultivation and profits from export, according to the Food and Agriculture Organization of the United Nations (FAO).

In its December World Rice Watch Report, FAO reported that rice production in Burma had been estimated at 28.9 million tons for 2014 by the government, an increase from 28.3 million tons the year before, and up more than a million tons on 2012.

FAO estimated that Burma’s profits from exporting rice had also increased.

Thailand is due to reclaim its status as the world’s leading exporter of rice this year. It had lost out in recent years to India and Vietnam after a rice paddy pledging scheme for Thai farmers had failed, FAO said.

DVB reported in August that Burma’s rice exports were up 41 percent on the year before for the period between 1 April and 15 August 2014. A Commerce Ministry official was quoted saying that some 530,000 tons of rice was exported during that period, at a value of around US$196 million.