Monthly Archives: February 2015

Rice stockpiles to be cleared in 2 years

Despite delaying a plan to release rice under an auction, the Commerce Ministry is confident it will be able to clear huge stocks within two years, said Commerce Minister General Chatchai Sarikulya.
He said that the ministry planned to release up to 18 million tonnes of rice via auctions and negotiate with rice-import countries to receive huge amounts under government-to-government (G-to-G) contracts.
The general said that Thailand had between 17-18 million tonnes stockpiled, and it recently negotiated to sell 2 million tonnes to China.
Although the ministry wanted to clear the warehouses, Chatchai said, the government would carefully consider all proposed contracts through the G-to-G and bidding processes to ensure transparency and prevent contracts defaulting.
If any bidder were found have a suspect background, the ministry would not sell rice to that dealer.
Under the plan to clear rice stocks, the ministry previously announced it aimed to sell about 10 million tonnes under many methods this year, including selling about one million tonnes via general auction each month.
However, the ministry could sell only about 500,000 tonnes through an auction in January, and will on March 6 open the second auction for one million tonnes after missing the February auction date.
Duangporn Rodphaya, director-general of the Foreign Trade Department, said that the ministry had already sold more than two million tonnes of rice in the first two months of the year.
Of those, she said about 1.5 million tonnes was sold under G-to-G contracts.
She said that the government was confident of releasing rice amounts as planned because many traders were interested in joining the government’s auctions due to the main harvest season ending.
Moreover, she said that in August the ministry would release low-grade rice grain to the market to supply the manufacturing sector.

Philippines to import 500,000 tonnes of rice from Thailand and Vietnam

The Philippines will sign deals with Thailand and Vietnam to import 500,000 tonnes of rice as the country looks to boost buffer stock ahead of the lean harvest season
rice-thailandAccording to the USDA, the Philippines may import 1.6mn tonnes of rice in 2015. (Image source: Paul Suesskind/Flickr)
According to the country’s National Food Authority (NFA), the country is expected to sign the contracts for the rice deal on or before 10 March 2015.
NFA is an agricultural agency, which is responsible for ensuring the food security of the country and the stability of supply and price of rice.
“Thailand had offered to sell 100,000 tonnes of rice worth US$780 per tonne. The prices were lower than Vietnam’s offers, but Vietnam agreed to match Thailand’s bid and the country will ship the remaining 150,000 tonnes of rice. All shipments will arrive in the Philippines by 30 April 2015,” added NFA.
In 2015, NFA may import rice between 500,000 tonnes to 600,000 tonnes. The NFA currently imports most of the rice requirement for buffer stocking.
Despite record high domestic harvests in recent years, including last year’s output, the Philippines remains one of the world’s biggest rice buyers. In 2014, the Philippines imported around 1.7mn tonnes of rice.

State Bank allows export refinance for broken rice

In order to facilitate rice trade, the State Bank of Pakistan (SBP) has allowed Export Refinance Facility for broken rice and withdrew Letter of Credit (LC) condition for financing of brown rice. Sources said on the request of rice exporters, the SBP has relaxed Export Refinance Scheme (ERS) requirements for rice – one of the largest exported commodity, which is generating over $1 billion foreign exchange annually for the country.

The State Bank, through its IH&SMEFD Circular Letter No 02 of 2015, issued on February 26, 2015 has made some changes in the negative list of EFS. Previously, export refinance facility was allowed for packeted Irri, Basmati, Parboiled, White and Brown rice in retail packets of 1-50 kgs. Broken rice was not eligible for the said facility. However, now the SBP has excluded broken rice from the negative list of EFS, after which exporters can also avail export refinance facility for broken rice in retail packets of 1-50 kgs.

Moreover, as per amendment, traders/exporters can get cheap financing for the export of Brown rice without Letter of Credit. Earlier, refinance facility for the export of Brown rice in bulk or lose was only for European Countries under EFS Part-I against Letter of Credit (LC). However, now banks have been asked to provide such facility for Brown Rice without LC condition and limitation of countries.

A para: (Excluding Packeted Irri/Basmati/Parboiled/White/Brown Rice in retail packets of 1-50 kgs. Moreover, the export of brown rice in bulk/loose is eligible to European countries under EFS Part-I against LCs only) for description of point No 8 of negative list for ERS has been replaced with: “Excluding Packeted Irri/Basmati/Parboiled/ White/Broken Rice in retail packets of 1-50 Kgs. Moreover, the export of Brown Rice in bulk/loose packing is also eligible under EFS.”

Meanwhile, Rafique Suleman, Chairman Rice Exporters Association of Pakistan (REAP) has appreciated the SBP’s decision saying this move will help enhance the country’s rice export. “We are expecting some 20-25 percent increase in rice exports during next fiscal year as LC requirement was a major hurdle in getting EFS for brown rice,” he said. Presently, Pakistan’s total rice exports stood at 3.8 million tons including 0.3 million tons of broken rice and some 0.1 million tons of brown rice, he added.

NFA bid awards set

The National Food Authority (NFA) is set to award contracts to Thailand and Vietnam for the supply of 500,000 metric tons of rice following Friday’s government-to-government bidding.

Piolito Santos, chairman of the Special Bids and Awards Committee, said that the NFA Council would recommend the results of the G2G offers – with Thailand winning 200,000 MT and Vietnam to supply 300,000 MT – for the final approval of NFA Administrator Renan Dalisay.

Santos also said that they expect to complete the issuance of notice of award no later than March 3, while the signing of contract will follow on March 4-10.

“By March 11, we will already give the winning bidders the notice to proceed to the delivery of the rice,” the official added.

A G2G transaction requires an existing executive agreement for a country to participate in the bidding of the rice. At present, only three countries – Vietnam, Thailand and Cambodia – have existing rice purchase agreement with Manila.

Under the terms of reference, the state-run grains agency will buy 250,000 MT of 25 percent broken and 250,000 MT of higher-grade 15 percent broken well-milled long grain white rice.

NFA’s bid specifications require bidders to deliver 50 percent of the volume to be awarded not later than March 31, 2015 and the other 50 percent not later than April 30, 2015

In Friday’s G2G tender, Thailand offered $441 per MT for 100,000 MT of well-milled long grain white rice with 15 percent broken grains, and another 100,000 MT at 25 percent broken for $421 per MT.

Vietnam, on the other hand, tendered an offer for the entire 500,000 MT, comprising 250,000 MT (15 percent broken) at $442.50 per MT, and 250,000 (25 percent broken) at $424.50 per MT. Cambodia, the other eligible supplier, did not join the bidding.

With Thailand only able to secure a total of 200,000 MT for both 15 and 25 percent broken, Vietnam has agreed to match Bangkok’s bid price offer to be able to supply the remaining 300,000 MT.

Malou de Leon, marketing officer for the Royal Thai Embassy in Manila, said that they were not able to bid for higher volume because of existing supply commitments to other countries.

She also said that restrictions in the terms of reference for the bidding have barred them to renegotiate for higher volume.

Manila is importing a total of 500,000 MT of rice through G2G to meet stock requirement before the start of the lean season in July.

The state-run grains agency is required by law to have at least 15-day buffer stock at any given time, and 30-day buffer stock during lean months. Traditionally, lean season in the Philippines starts in June and ends in September. With stocks dipping below the mandated volume, the NFA is now resorting to importation anew to beef up its inventory.

$50 billion target: Prime Minister asks exporters to double up efforts

Prime Minister Nawaz Sharif Thursday said his government is committed to making Pakistan the preferred destination for business. Addressing the launch of Expo Pakistan, country’s biggest trade fair that showcases the largest collection of Pakistan’s export merchandise and services, he said that Pakistan is a land of business opportunities.

“We offer our foreign buyers a very competitive sourcing option. The captains of our industry have carved out their niche in the world market due to their production efficiencies and business ethics,” he said. The Prime Minister said his government is dedicated and committed to economic development of Pakistan.

“My team and I are actively engaged to bring in long-term reforms in socio-economic sectors of Pakistan. We are well aware of the aspirations of the people of Pakistan and will do our utmost to vindicate the trust reposed in us,” the Prime Minister said. He said owing to consistent efforts, his government has succeeded in enhancing Pakistan’s exports to its highest ever turnover of over US $25 billion during the fiscal year 2013-14.

“I am sure our entrepreneurs will maintain and further accelerate this growth momentum to achieve the export level of US $50 billion within three years,” the Prime Minister said. The Prime Minister said the government recently approved its Textile Policy, which is aimed at doubling the exports of textiles and clothing sector from existing US $13 billion to US $26 billion by the year 2019.

He said that Asia is gradually emerging as the new global economic hub and Pakistan is fortunate to be located in the high economic growth neighbourhood. He said that Pakistan is currently not part of this highly competitive economic growth activity but has a strong resolve to achieve a similar target. The Prime Minister particularly highlighted the performance of Pakistani textile and apparel industry and said it is considered amongst the world’s leaders. The bedsheets, quilt covers, T-shirts and jeans produced in Pakistan are sold at international leading chain stores from discounters to upscale outlets and under leading brand names.

Prime Minister said that Pakistan has modern rice milling and processing industry and its exotic Basmati rice has made its mark in the world market. All these production advantages offer “unlimited business opportunities” that has been aptly chosen as the slogan of Expo Pakistan. He said as an incentive to adding profitability to business ventures, Pakistan has effectively negotiated the bilateral, multilateral and pluri-lateral trading arrangements with many regions and countries in the world enabling its products to enter the foreign markets at lower tariffs.

In this regard he mentioned the South Asian Free Trade Agreement (SAFTA) that is in operation and aimed at liberalising trade with its South Asian neighbours. He said bilateral free trade agreements with China, Sri Lanka and Malaysia already exist. “We have also entered into Preferential Trading Arrangements with Iran, Mauritius, Indonesia and similar arrangements with D-8 countries have been finalised.

“I would specially mention here the opportunity of zero rated market access to our biggest export market of European Union under GSP Plus scheme,” the Prime Minister told the investors. He said his government was committed to devising a consistent policy direction for its trade and industry. “We have announced a three-year Strategic Trade Policy Framework providing a long-term policy framework for consistency and predictability for businesses and to be able to plan and strategize expansion and growth.

“I have emphatically directed the concerned government agencies to simplify procedures, reduce red tape, and enhance transparency and efficiency creating a business-friendly environment,” he said. He said he is very mindful of the challenges confronting country’s industry and export sectors. He said the energy crisis has adversely affected national industry in meeting delivery commitments with foreign buyers.

“Our government has made the solution of this problem as its first priority and we have considerably improved the energy supply situation. “We are continuously working on further improving the situation and hope to overcome the problem in not-so-distant a future. This must provide an added comfort level to our foreign collaborators while dealing with Pakistani suppliers,” he said.

The Prime Minister said in the current highly competitive economic environment, no country can afford to be complacent in terms of retaining its international market share particularly of its most competitive products. “I exhort exporters to double the efforts in the coming years for further enhancing exports of Pakistan,” he said and added that he has also instructed the Ministry of Commerce and Trade Development Authority of Pakistan to extend maximum possible support to them, as his government considers it a national priority.

The Prime Minister also encouraged exhibitors to try and build long-term business relations with their customers to establish MADE IN PAKISTAN as a reliable and recognisable brand the world over. He also noted that the TDAP (Trade Development Authority, Pakistan) was taking the EXPO abroad and will be organising ‘Aalishan Pakistan’ in London. “I am sure it will be great success,” he said. He later handed over trophies amongst outstanding exporters.

Export-Import Bank of India extends $55 million credit line to Congo

Export-Import Bank of India has extended a $55 million line of credit (LoC) to the Republic of Congo to set up a greenfield 600 tpd rotary kiln cement plant.

This is the third LoC from the government to the Central African nation. Earlier, it was given $70 million for financing a rural electrification project and $89.90 million for developing a transport system.

Under the LoC, Exim Bank will reimburse 100 per cent of the contract value to Indian exporters, upfront upon the shipment of equipment and goods/provision of services.

Major exports to Congo include non-Basmati rice, tea, spirits & beverages, powerloom fabrics, pharmaceuticals, meat products, household steel articles and bicycles, among others.

With the signing of this LoC, the Exim Bank has now in place 192 LoCs worth over $11.64 billion, covering 63 countries in Africa, Asia, Latin America, Europe, Oceania and the CIS, with credit commitments available for financing exports from here.

Pricey rice may mar auction.

Rice HQ

The government’s ambitious attempt to sell its rice stocks could hit a snag as demand ebbs for costly Thai grains.
Thailand is likely to face difficulty selling rice now that global market demand is slowing amid greater supply and price competition, said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
World rice trade is estimated at 41 million tonnes this year, down from an earlier forecast of 42 million tonnes, he said.
Worse still, Vietnamese rice prices have dropped significantly, with 5% white rice quoted at US$350 a tonne. The price of Thai 5% white rice, meanwhile, is as high as $400-405 a tonne.
“We expect most buying nations are now delaying their purchases to wait and see about the rice price situation,” Mr Chookiat said.
As a result, he predicts tepid participation from bidders in the state’s second rice auction of an additional 1 million tonnes to take place next week, with the government selling 400,000 tonnes at best.
Duangporn Rodphaya, director-general of the Foreign Trade Department, said the government was set to call the second auction for an additional 1,008,837 tonnes next Thursday.
The total includes 762,700 tonnes of 5% white rice, with the rest comprising 10% white rice, 15% white rice, 25% white rice, 10% white glutinous rice and broken rice.
The rice up for sale will be available at 124 state warehouses in 33 provinces, with the names of qualified bidders announced next Friday.
The government sold about half the nearly 1 million tonnes of rice put up during the year’s first auction last month.
The plan is to dispose of 17 million tonnes of rice in state stockpiles within two years, with 10 million tonnes to be sold this year.
Sales this year will consist of both premium-grade rice (60%) and substandard grains (40%).

Vietnam’s January-February rice exports dip to 515,000 Tonnes

Vietnam’s rice exports in the first two months of 2015 are estimated to have fallen 34.4 percent from a year ago to 515,000 tonnes, the government said on Thursday.
Revenue from rice shipments in January-February is estimated at $237 million, down 35.6 percent from the same period last year, the government’s General Statistics Office said in its monthly report.
Vietnam, the world’s third-largest exporter after Thailand and India, has projected to ship 7 million tonnes of rice this year. Last year exports via official channels totalled 6.38 million tonnes.

Vietnamese ship capture confirmed; crewmembers safe

Rice HQ

The Vietnamese firm managing a vessel which was seized by the Philippine navy on Monday has said it has full legal papers on maritime transport activities of the ship, while another firm owning the ship also confirmed that it has all necessary shipping documents and bills of lading.
Do Ngoc Binh, Director of TTC Hai Phong Co – the unit which manages and operates the M / V AN BIEN-89-ALCI, reconfirmed that the ship, of which Nguyen Van Loi is the captain, was detained in the Philippines, Thanh Nien (Young People) newspaper reported on Wednesday.
The Philippine navy on Monday seized the Vietnamese ship with 16 crewmembers on board as the vessel was suspected of smuggling rice from Vietnam to the island nation.
The cargo ship, carrying 116,000 bags of rice, was detained and inspected by Naval Forces Western Mindanao in the afternoon when sailing off the coast of Pata island, according to a statement from the Western Mindanao Command, known officially as the WestMinCom, part of the Armed Forces of the Philippines.
The director of TTC Hai Phong Co., based in the northern coastal city of Hai Phong, said the ship is owned by Agribank Financial Leasing Company No 1 (ALC1) under Vietnamese lender Agribank.
The ship was delivered to the company on April 1, 2014. Before that date, the ship was under the management of Binh Minh Shipping and Trade Co., also headquartered in Hai Phong, Binh told Thanh Nien.
Before the incident, the ship had transported rice from the Mekong Delta province of An Giang to the Philippines under a contract with a partner that TTC Hai Phong declined to name.
Binh confirmed that TTC Hai Phong has full legal papers on maritime transport activities.
Regarding the goods on board, the owner will be accountable to the authorities, he said.
Nguyen Hong Long, CEO of ALC1, also told Thanh Nien that the captured ship has all necessary shipping documents and bills of landing.
However, he added that the ship was not licensed to export rice to the Philippines.
In addition to the Vietnamese ship, three other Philippine vessels were considered smuggling rice to the region, and were also arrested.
Authorities said they seized some weapons on board the three ships.
WestMinCom told GMA News that initially there were 152,000 bags of rice on the Vietnamese ship registered under Sunrise Commercial Shipbuilding Co. The rice is assigned to a person named Alfarsi Tan Hasiman in Jolo in Sulu province.
According to Philippine newswire Inquirer.net, Customs Deputy Commissioner Jessie Dellosa said “top Sulu politicians” were behind the attempt to smuggle the Vietnamese rice.
“Top Sulu politicians owned the smuggled rice,” Dellosa told the newswire on Tuesday.

BOC hunts for 20,000 sacks of smuggled rice

The Bureau of Customs (BOC) is now trying to look for some 20,000 sacks of smuggled rice from Vietnam, believed to be a part of the shipment the bureau seized together with the Philippine Navy in Sulu on February 23.

“Customs is still trying to locate the rest of the shipment with the help of local authorities,” Jay Crisostomo of the BOC Public Information and Assistance Division told GMA News Online on Thursday.

The Philippine Navy seized around 131,000 sacks of imported rice worth around P100 million from a Vietnamese ship and several local boats off Pata Island in Sulu, according to a BOC statement Wednesday.

Listed on the ship’s manifest are 152,000 sacks of rice consigned to the Sunrise Ship and Trading Company “but the Navy only found a total of around 130,000 sacks.”

“We are conducting follow up operations on this,” BOC Deputy Commissioner for Intelligence Jessie Dellosa said in a separate statement on Wednesday.

The cargo vessel M/V An Bien-89-ALCI, carrying 116,000 sacks of rice from Vietnam, arrived on February 19 but was apprehended at 3:25 a.m. on February 23.

“In the span of four days they were able to unload smuggled rice,” Crisostomo said.

Also apprehended were the local vessels M/L KH with 7,000 sacks or rice, M/L Fatima Numina with 1,000 sacks, and M/L Boy 1 with 7,000 sacks. High-powered rifles and grenade launchers were also seized.