Monthly Archives: May 2015

Iran may resume basmati imports by July

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Iran – the biggest buyer of Indian basmati – is expected to resume imports of the aromatic rice after July, officials said. Iran had banned rice imports mid-November last year to protect the interests of local growers on higher domestic output and stocks.

“We are getting feelers from various stakeholders that imports from Iran are likely to resume after Ramzan. However, there is no written communication from them so far,” said AK Gupta, Advisor, Agricultural and Processed Foods Export Development Authority (Apeda).’

Indian shipments
Iran imported about 9.35 lakh tonnes of basmati in 2014-15, accounting for about a fourth of the Indian shipments. India had exported a total of 11.65 million tonnes (mt) of rice in 2014-15, of which basmati accounted for about 3.78 mt.

In fact, the shipments to Iran declined by 35 per cent in 2014-15 over previous year’s 14.40 mt, largely due to the curbs imposed by the largest buyer of the Indian basmati.

Gupta said demand from other markets – mainly in West Asia, Europe and the US grew by around 20 per cent, which has helped offset the impact of Iran ban on exports.

Also, the domestic consumption of basmati rice is on the rise.

Irani market
Basmati shipments rose marginally to 3.78 mt in volumes during 2014-15 over previous year’s 37.57 mt. “We expect the shipments to increase by 10-15 per cent this year,” Apeda’s Gupta added.

Rice exporters are hopeful that Iran would open up the market for basmati to meet its consumption. The Iranian rice consumption is estimated at around 3 mt a year, of which their domestic production is pegged at around 2 mt.

“Iran has to purchase around one million tonnes of rice to meet their domestic demand and India has a major share in their imports,” said Rajen Sundaresan, Executive Director, All India Rice Exporters Association.

Acreage may rise
Rice exporters expect the basmati acreage to increase at least by about 5 per cent in the upcoming kharif season over previous year’s 2.1 million hectares, Sundaresan said.

Farmers in the key basmati growing States of Punjab, Haryana, Uttar Pradesh and Madhya Pradesh are expected to plant more basmati in anticipation of better returns.

Besides, the Punjab Government’s move to encourage farmers to plant more basmati, which consumes less water when compared to the normal rice crop, is also expected to help boost the acreage.

Vietnam Rice Exports Decline Due to Low Demand, Says MARD Report

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Vietnam’s rice exports declined about 11.4% to around 2.4 million tons in the first five months of 2015 from around 2.7 million tons exported during the same period in 2014, local quoted a report by the Ministry of Agriculture and Rural Development (MARD).

According to the report, the country’s rice export earnings declined about 14.6% to around $1.05 billion during the five-month period from around $1.23 billion last year. The average price of exported rice so far this year stood at around $436.7 per ton, down about 4.27% from around $456.2 per ton last year.

The Ministry report noted that a stiff competition with Thailand, India and Pakistan as well as reduced demand from importers were main reasons for a decline in this year’s exports. It stated that demand from China, Vietnam’s largest buyer in the last few years, has also been declining. Vietnam’s rice exports to China declined about 28% y/y in tonnage and about 31% y/y in earnings from last year.

Experts have been criticizing that Vietnam’s rice exports are low in quality and price compared to other rice exporters and have highlighted the need for a prominent rice brand. The government has recently approved a rice strategy to develop a national brand name for Vietnamese rice by 2020.

According to the Vietnam Food Association (VFA), Vietnam’s rice exports declined to around 6.6 million tons in 2013 from around 7.7 million tons in 2012. They further declined to around 6.5 million tons in 2014.

Pakistan Rice Sellers Increased Some of Their Quotes Today; Other Asia Rice Quotes Unchanged

Pakistan rice sellers increased their quotes for parboiled rice by about $10 per ton to around $415 – $425 per ton today. Other Asia rice sellers kept their quotes mostly unchanged today.

5% Broken Rice

Thailand 5% rice is indicated at around $365 – $375 per ton, about a $15 per ton premium on Vietnam 5% rice shown at around $350 – $360 per ton. India 5% rice is indicated at around $370 – $380 per ton, about a $35 per ton discount to Pakistan 5% rice shown at around $405 – $415 per ton.

25% Broken Rice

Thailand 25% rice is shown at around $350 – $360 per ton, about a $25 per ton premium on Vietnam 25% rice shown at around $325- $335 per ton. India 25% rice is indicated at around $345 – $355, about a $15 per ton discount to Pakistan 25% rice shown at around $360 – $370 per ton.

Parboiled Rice

Thailand parboiled rice is indicated at around $365 – $375 per ton. India parboiled rice is indicated at around $350 – $360 per ton, about a $65 per ton discount to Pakistan parboiled rice shown at around $415 – $425 per ton, up about a $10 per ton from yesterday.

100% Broken Rice

Thailand broken rice, A1 Super, is indicated at around $315 – $325 per ton, about a $5 per ton premium on Vietnam 100% broken rice shown at around $310 – $320 per ton. India’s 100% broken rice is shown at around $275 – $285 per ton, about a $30 per ton discount to Pakistan broken sortexed rice shown at around $305 – $315 per ton.

Government of Cambodia to Check ‘Unethical’ Rice Tampering

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The government of Cambodia is planning to increase checks on ‘unethical’ rice tampering as part of efforts to ensure Cambodian rice, slated for export, is not mixed with rice from neighboring countries, according to local sources.

In a letter dated May 11, 2015, the Ministry of Commerce has communicated to all exporters that it will stop issuing Certificates of Origin to exporters found to be using non-Cambodian rice for export.

The government became serious over the rice tampering issue following the European Union’s (EU) increased monitoring of rice imports for clear Certificate of Origins. Of late the EU has been keen on pausing or banning the rice imports without clear origins. There are also concerns that the EU may take this opportunity to withdraw its duty-free imports from Asian Least Developed Countries (LDCs) under the Everything But Arms (EBA) agreement.

The EU Ambassador to Cambodia noted that it is the responsibility of the Cambodian authorities to ensure of the quality of the commodities exported to the EU under the EBA agreement. “Indeed, as for any other product exported to the EU under EBA, were the rule of origin not respected, it may lead to an investigation by the EU,” he was quoted as saying in an email.

The Ministry also urged the President of the Cambodia Rice Federation, millers and exporters to strictly comply with the agreed code of conduct on rice exports the EU. The letter also stated that the Ministry would conduct surprise inspections in rice milling and exporting companies to ensure there is no rice tampering.

All is well, Indonesia govt says of Ramadhan food supply

The domestic supply of staple foods is adequate to meet an expected rise in demand during the Ramadhan fasting month and Idul Fitri, a senior trade official says.

The Trade Ministry’s director general for domestic trade, Srie Agustina, said the stock of key food commodities, including rice, sugar and meat, was sufficient to cope with the rise in demand.

Indonesia, home to the world’s-biggest population of Muslims, sees consumption peak during the Idul Fitri holiday, which this year will fall on July 17-18, and the one-month fasting period preceding the holy days in the Muslim month of Ramadan.

“In general, the food supply is enough. We only need to pay attention to shallots and chilli,” Srie said on the sidelines of an impromptu visit to Cipinang Wholesale Rice Market on Wednesday.

The adequacy of key staple-food supply is a major concern in Indonesia during the Ramadan, as it normally contributes to a higher-than-expected inflation rate.

The worry is more pressing amid the current economic slowdown, as any inflationary pressures could further erode people’s purchasing power and buying appetite.

Central Statistics Agency (BPS) data showed that the year-on-year (yoy) inflation rate in April stood at 6.79 percent, down from 8.4 percent at the end of last year but still higher than the government’s target of 5 percent this year.

Rice prices saw a 0.2 percent deflation during the month of April as food stocks soared during the harvest season.

As of Tuesday, rice stocks at the warehouse managed by state-owned logistics firm Bulog — which manages the government’s rice supply — totaled 1.35 million tons, while daily absorption from local farmers reached between 25,000 tons and 30,000 tons, according to Bulog corporate secretary Djoni Nur Anshari.

Meanwhile, the current supply of sugar is more than enough to fulfill household needs from May to July, with an expected surplus of some 353,000 tons in July, Srie said.

Srie did not comment on the exact figure for meat supplies.

Srie said the government would likely import shallots, but would tread carefully, as there remained a potential for abundant shallots harvests in some regions, such as Central Java.

In a separate development, Trade Minister Rachmat Gobel said the government would require rice-packaging and distribution firms, as well as packaged rice traders, to register with the ministry.

“By doing so, business players, types of rice and rice origins will be known,” Rachmat said in a statement. In addition, warehouse operators will have to report to the Trade Ministry regarding accumulating food stocks in line with prevailing regulations, he said.

Maldives tenders to buy 9,000 tonnes rice

HAMBURG, May 28, 2015 – The Indian Ocean state of Maldives has issued an international tender to purchase 9,000 tonnes of rice, European traders said on Thursday.

Tender offers will be opened on July 5, they said.

The parboiled rice can be sourced optionally from the United States, South America, the United Arab Emirates, Australia, Canada, India, Pakistan, Indonesia, Malaysia, Turkey, Thailand, the Philippines, Singapore, Sri Lanka or Europe, they said.

Govt to revamp farm export policy, focus on value addition

To arrest the fall in rural income growth, the government has decided to be more liberal with the export of farm items and put in place a stable policy. The idea is that farmers, who have in recent years seen a moderation in the increase in minimum support prices (MSP), be compensated with better opportunity to sell products in the export markets.
Agricultural exports, which had surged from $17.7 billion in 2009-10 to $42.7 billion in 2013-14 but fell to $39 billion in 2014-15, would get a fillip with the new policy. Sources said once the practice of transient export bans and curbs are minimised, farmers will get the confidence to boost production and the agricultural products processing sector will be able to make value-added items, resulting in much higher export earnings for the country.
The commerce ministry officials said to a certain extent, shortcomings in the agri export policy have already been addressed but there is a need to make further headway in this regard. At present, export of pulses (barring kabuli chana and organic lentil) and edible oil (in bulk) are banned. These could be removed in phases, said sources.
Edible oil exports were allowed in 2013 in 5kg packs (to promote value-addition of Indian brands) with a minimum export price fixed at $1,500 a tonne and then MEP was brought down to $900 a tonne in February this year. A plan to increase area under pulses and oilseeds, and enhance value-added exports is on the cards.
Speaking to FE, Ashok Gulati, professor for agriculture at ICRIER and former chairman of the Commission for Agricultural Costs and Prices, said the government must ensure better price support operations for oilseeds and pulses. The MSP policy must be dovetailed with the trade policy to make sure the landed (import) costs of these items are not be below the MSP, he said.

Rice HQ

Simultaneously, the government is preparing a list of market-access barriers (non-tariff barriers such as sanitary and phyto sanitary measures, packaging norms along with high tariff) and market denials (outright bans) in overseas markets that hamper its agricultural exports. The plan is to take these issues up more strongly with the key importing countries. The government recently took up the issue of import ban and restrictions on Indian farm items with trading partners such as Vietnam (ban on Indian peanuts), China (yet to allow market access to Indian non-basmati rice), Saudi Ariabia (ban on Indian green pepper), Iran (general ban on rice imports) and European Union (ban on Indian snake gourd, bitter gourd, aubergine and colocasia leaves).
The government is also compiling more information on 60 Agri Export Zones (AEXs). The AEZ concept, launched in 2001, has not yet taken off as the government has not allocated enough funds. The government is planning to revamp the policy with a focus on value-added exports. On May 11, the government had organised first outreach programme (in Mumbai) with exporters of farm products to inform them about the plan of a ‘stable export policy’ and elicit their responses on the problems they face in India and overseas. More such events are on the anvil.

IPAB to Hear Basmati GI Certification Case in July 2015

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The Chennai-based Intellectual Property Appellate Board (IPAB) will reportedly hear the claims of parties involved in the basmati gegraphical indications (GI) certification case for three days starting from July 8, 2015, a move that could see legal protection granted to Indian basmati rice, according to local sources.

India’s petition to grant a legal protection to basmati rice is being delayed since 2009, when the the Agricultural and Processed Food Products Export Development Authority (APEDA) applied for the GI protection for the first time.

However, based on complaints from the Madhya Pradesh department of farmer welfare and agriculture development and some basmati exporters in the state, in December 2013, the GI Registry directed the APEDA to file an amended GI application to include Madhya Pradesh as a basmati growing area.

Not convinced by the GI Registry’s directive, the APEDA approached the Intellectual Property Appellate Board (IPAB) in February 2014 to decide over the inclusion of Madhya Pradesh in its Geographical Indications (GI) application. The Madhya Pradesh state farmers’ body also appealed against the APEDA with the IPAB.

The APEDA has been very keen on not including other basmati growing states, other than those recognized by National Agricultural Research System under the agriculture and co-operative department, in its application as it views the GI status is critical in determining the genuine basmati rice cultivators. The Commerce and Agriculture Ministries as well as some renowned agricultural scientists in India are also opposed to the inclusion of Madhya Pradesh in the definition of traditionally basmati-growing geography as it would undermine the rights of those farmers who have been traditionally growing basmati in Indo-Gangetic plain.

Meanwhile, Pakistan’s Basmati Growers Association (BGA) also appealed to the IPAB against granting legal protection to Indian basmati rice.

A GI certification label certifies the geographical origin of a product and confirms adherence to some production standards. It also prevents producers who aren’t covered by the tag from using the same thereby providing a legal protection to the cultivation and use of the specific product.

New advice for farmers: Grow paddy and basmati in equal ratio

Setting aside agriculture department’s recommendations made a year ago, that had suggested cultivation of less water-consuming basmati instead of common paddy to promote crop diversification in view of alarming dip in subsoil water in Punjab, the farm department in Amritsar has now advised farmers to grow paddy and basmati in equal proportion this kharif season.

Importantly, the advice has come as basmati failed to give higher returns to cultivators last year on account of higher arrival and weak demand from buyers, mainly rice exporters.

“Out of 1.8 lakh hectares area, paddy was grown only on 20,000 hectares last year while the remaining land was under basmati. This time we are recommending farmers to grow paddy and basmati in equal ratio,” said Amritsar chief agriculture officer BS China.

He said in previous years, basmati was cultivated only over 17% of the total area in the district and remaining area was under paddy.

Chhina said paddy has a minimum support price (MSP), announced by the Union government, due to which farmers remain assured of marketing their produce. “Since there is no MSP for basmati, farmers get exploited by traders and end up making distress sale,” he said.

The officer said last year, paddy was procured at Rs 1,400 per quintal by the government agencies while rates of different varieties of basmati varied between Rs 2,100 and Rs 3,200 per quintal. He informed that the agriculture department recommends sowing different varieties of basmati, including Pusa 1121, Pusa 1509 and 386, so there was no glut of a particular grain in the market.

Chinna said last year a few farmers had sown short duration basmati variety Pusa 1509 before the recommended time due to which the quality of grain was poor and they had to suffer losses.

Daniel Masih, a rice broker who procures basmati for several prominent rice millers and exporters, said paddy had almost nil demand in Punjab. “Other states like Bihar, Andhra Pradesh, Uttar Pradesh and Madhya Pradesh are producing their own paddy and it is cheaper than the crop available in Punjab,” he said.

However, he said, basmati had great demand both in India and abroad. To save farmers from exploitation, Masih suggested that government should have a minimum rate for the aromatic grain that is exported to the whole of Middle East with Iran being the biggest importer followed by Saudi Arabia and UAE.

A farmer, Sukhbir Singh, who has seven acres of land, said he would be cultivating Pusa 1121 basmati. “I know yield of basmati is lower than paddy, but then it fetches good amount. Then why should I sow paddy,” he remarked.

Cross Border Rice Exports to China May Increase Sharply in 2015, Says USDA Post

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USDA Post estimates Myanmar’s rice exports to increase about 10% to around 1.85 million tons in 2015 from an estimated 1.688 million tons in 2014, and about 16% from USDA’s official estimates of around 1.6 million tons.

The Post expects cross-border rice exports to China to increase sharply as a result of the recent rice border trade agreement between the Governments of China and Myanmar. In February 2015, the China National Cereals, Oils and Foodstuffs Corporation (COFCO) signed a memorandum of understanding (MOU) with the Myanmar Rice Federation to purchase 100,000 tons of rice over the next one year and the first shipment under the MOU was supposed to commence in April/May. It expects Myanmar’s rice exports to reach to around 2 million tons in 2016.

The Post estimates Myanmar’s milled rice production to increase about 5% to around 12.6 million tons in MY 2014-15 (January 2015 – December 2015) from an estimated 11.957 million tons last year, and about 4% from USDA’s official estimates of around 12.15 million tons. The increase is attributed to increased use of high-yielding rice varieties and an increase in the irrigated dry-season paddy crop production. It estimates MY 2015-16 milled rice production to increase to around 12.8 million tons due to a continued expansion of the rice growing area.

The government is taking measures to increase production by providing loans to farmers through the Myanmar Agricultural Development Bank, developing infrastructure, introducing mechanization and technology transfer. It is also planning to finalize a national rice strategy this year.

It estimates the country’s rice consumption to slightly increase to 10.7 million tons in MY 2014-15 from an estimated 10.5 million tons in MY 2013-14. It estimates consumption to further increase to 10.8 million tons in MY 2015-16.