Monthly Archives: July 2015

Thailand to Export 76000 Tons of Stockpiled Rice to Africa at $430 per Ton, Says TREA Official

Rice HQ

The government of Thailand has struck preliminary deals to export about 760,000 tons of stockpiled rice to African nations, including Mozambique, Nigeria and South Africa, Reuters quoted the Honorary President of the Thailand Rice Exporters Association (TREA).

He noted that African nations mostly buy parboiled rice and the Thai government is likely to begin shipments from September this year.

The TREA official also noted that rice would be sold at around $430 per ton raising a total of around $325 million.

The Thai military government still has around 14.5 million tons of rice in its stockpiles and it is planning to sell about 10 million tons this year. The government had over 17 million tons of rice when it took over in May 2014. It sold a total of 3.88 million tons of rice in eight auction for around 40.90 billion baht ($1.2 billion) since it took over in May 2014.

The government is planning to hold another auction this month. It is also considering to auction about 1.29 million tons of sub-standard rice in August.

Basmati rice remains weak on subdued demand

Basmati rice fell further by Rs 100 per quintal in the wholesale grains market today following sluggish demand from importers.

Barley also drifted on reduced offtake by consuming industries.

Marketmen said easing demand from importers against sufficient stocks position mainly kept rice basmati prices lower.

In the national capital, rice basmati common and Pusa-1121 variety fell by another Rs 100 each to Rs 5,700-5,900 and Rs 4,400-5,700 per quintal, respectively.

Other bold grain like, barley declined by Rs 20 to Rs 1,230-1,240 per quintal.

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

Wheat MP (desi) 2,350-2,700, Wheat dara (for mills) 1,545-1,550, Chakki atta (delivery) 1,550-1,555, Atta Rajdhani 10 kg) 220, Shakti Bhog (10 kg) 220, Roller flour mill 825-830 (50 kg), Maida 890-900 (50 kg) and Sooji 1,000-1,010 (50 kg).

Basmati rice (Lal Quila) 10,400, Shri Lal Mahal 10,000, Super Basmati Rice 9,500, Basmati common new 5,700-5,900, Rice Pusa (1121) 4,400-5,700, Permal raw 1,700-1,750, Permal wand 1,900-1,925, Sela 2,300-2,400 and Rice IR-8 1,600-1,625, Bajra 1,200-1,205, Jowar yellow 1,590-1,600, white 2,650-2,750, Maize 1,325-1,330, Barley 1,230-1,240.

Thailand to sell 760,000 tonnes rice to Africa from stockpiles -exporters

Thailand’s government has struck preliminary deals to export a total of 760,000 tonnes from its huge stockpiles to several countries in Africa, the Thai Rice Exporters Association said on Wednesday.

Rice will be supplied to Mozambique, Nigeria and South Africa, Chukiat Opaswong, honorary president of the association, told Reuters by phone from Johannesburg.

Thailand, the world’s second-largest rice exporter, has about 14.5 million tonnes of rice in stockpiles built up under a generous rice subsidy scheme run by a government that was overthrown by the military in May 2014.

The current military government aims to sell off the rice over two years, although industry observers say selling so much in such a short period will be difficult.

Most of the rice going to Africa is parboiled and shipments will start in September, Chukiat said.

The rice would be sold at around $430 a tonne, he said, netting the government more than $325 million.

Extreme weather: the new normal for Myanmar farmers

U Tin Win’s summer paddy looked perfect. The sight of the serried arrays of green plants brought joy to his heart. But that evening, July 14, was the last time he felt so good. The next day, torrential rains came to his plantation in Kan Thit village, Kin-U township, Sagaing Region. They have barely stopped since.

Rice HQ

“The fields were flooded, and so were the houses around. My summer paddy was drowned. I was going to sell the crop to pay off my debts. Now I’ll have to get another loan for the rainy-season paddy,” he said.

Sagaing Region was particularly badly hit from mid-July onward, with Wuntho Dam overflowing. As other rivers, streams, dams and dykes also burst their banks, houses and fields were inundated, with Kin-U, Kawlin and Wuntho townships particularly hard hit.

The 7.83 inches (198.88 millimetres) of rainfall recorded at Kanbalu in the 24 hours to 9:30am on July 18 was a 20-year record, while surrounding areas recorded similar amounts. State-owned media reported that 2453 acres of summer paddy, 36,689 acres of monsoon paddy and 3147 acres of monsoon seedlings owned by 13,851 farmers in 142 village tracts in the region were underwater.

As if that wasn’t bad enough, farmers in next-door Mandalay are suffering from drought.

In recent years Mandalay has seen a dangerous mixture of water shortages and heavy rain.

“A shortage of rain over the past three years has reduced yields,” said U Hla Myint Aung, a regional staff officer with Mandalay Region’s Ministry of Agriculture and Irrigation.

U Kyaw Lwin Oo, director of the Department of Meteorology and Hydrology, said Mandalay Region’s climate had changed significantly from a decade ago, with rainfall slumping from 60.71 inches in 2006 to 24.57 inches last year.

“Since 2011, Mandalay Region has suffered both record-breaking drought and record-breaking rains, in July and August,” he said, adding that “neither is good” for farmers.

Myanmar is one of the countries most affected by climate change, exposed as it is to the weather engine of the Bay of Bengal, which brings the early advance or late withdrawal of the monsoon, and more or fewer storms. At the mercy of the whims of the bay, some regions are turned into lakes even as their neighbours’ soil cracks and burns under the pitiless sun.

In its 2015 Climate Change and Environmental Risk Atlas, business risk analysis firm Maplecroft placed Myanmar 19th of 32 countries at “extreme risk” to climate change over the next three decades. Dependence on agriculture was a common thread between the 32 countries, with the sector employing an average of 65 percent of their working populations and accounting for 28pc of economic output.

It said that the UN Intergovernmental Panel on Climate Change had estimated declines of up to 50pc for staples such as rice, wheat and maize in some locations over the next 35 years due to the impacts of climate change. While Myanmar was not classified among 11 countries at “extreme risk” of food insecurity, it was considered “high risk”.

Myanmar is not likely to see less rainfall; many areas will even receive more rain. However, it will be concentrated into a shorter monsoon, with rainfall outside the monsoon declining, according to Myanmar’s National Adaptation Programme of Action (NAPA).

Myanmar’s farmers are already feeling the early effects. Figures from 1960 to 2009 cited in the NAPA report show that “shorter rainfall seasons in combination with erratic and intense rainfall resulted in numerous flooding events”.

For farmers, the unstable weather of recent years – both floods and droughts – has resulted in lost production and rising indebtedness.

These debts force them to use more insecticides and chemical fertiliser to improve their yield and compensate for earlier losses, driving up the cost of cultivation per acre. Most damaging is lack of access to credit; low-interest loans from the Myanmar Agriculture Development Bank and the Ministry of Cooperatives only cover a portion of the production costs, with the rest sourced at high rates from private creditors.

“It costs at least K200,000 per acre from sowing time to harvest time. But the agriculture bank won’t lend more than K100,000 an acre, so farmers have to turn to private lenders. They are trapped in a vicious circle of debt,” said farmer U Khin Oo of Patheingyi township, Mandalay Region.

U Kyaw Swar Soe, chair of the Farmer Development Party, said the government should provide a guaranteed market for crops, provide sufficient loans, and ease rules and regulations governing farm finance. These measures would raise farmers’ living standards and protect them from natural disasters, he said.

“The government is working for farmers’ development, but we’ve yet to see significant change. While businessmen have finished their buildings and are driving around in their cars, the farmer is still in his farm, and still paying his debt,” he said.

“Farmers in upper Myanmar have incurred losses because of climate change. There is not enough water when they need it, and too much when the time comes to harvest. Laws to protect farmers exist only on the books. They do not protect our interests,” he said.

In an effort to address some of these concerns, parliamentarians drafted and enacted the Protecting Rights and Enhancing Economic Welfares of Farmers Law in October 2013, which contains measures such as setting minimum prices for crops and the introduction of crop insurance. However, the necessary by-laws have still not been enacted by the Ministry of Agriculture and Irrigation, despite repeated requests by parliament.

Even with such measures, prominent meteorologist U Tun Lwin has a blunt message for farmers: prepare for change.

“Our traditional agricultural methods and philosophy,” he said, “will have to change based on the impact of climate change.”

Customs Seals Warehouses of Rice Importers

Nigeria Customs Service has commenced the sealing up of warehouses of four (4) defaulting Rice Importers.

The action is intended to give a bite to several letters of warming and ultimatum to the beneficiaries of rice import quota policy who imported in excess of their approved quotas.

The affected importers are: Olam, Stallion/ Popular Foods/Masco Agro, Ebony Agro And
Conti Agro (Milan)

The defaulting rice importers have refused to pay their total debt profile of N23,603,479,402.44 (Twenty Three Billion, Six Hundred and Three Million, Four Hundred and Seventy Nine Thousand, Four Hundred and Two Naira, Forty Four kobo.)

In addition to the sealing up of their warehouses, the importers and their sister or associated Companies have been blocked from the Customs NICIS system meaning they will not be able to make further declaration and or not be allowed to discharge.

To ensure that every amount owed Federal Government is recovered, a full scale legal action will be instituted against them.

Nigeria Customs Service wishes to assure the Public that it is not averse to concessions that help to engineer economic growth but will not relent on its role of holding beneficiaries accountable to their obligations.

For the avoidance of doubt, Genuine Importers are hereby advised not to exercise any fear as NCS action is only about enforcing payments that are legitimately due to the Federal Government of Nigeria.

Basmati rice declines on reduced offtake

Rice basmati prices moved down by Rs 200 per quintal at the wholesale grains market here today owing to slackened demand from importers against sufficient stocks position.

Barley also eased on reduced offtake by consuming industries.

Marketmen said besides subdued demand from importers, adequate stocks position on increased supplies from producing belts mainly kept pressure on rice basmati prices.

In the national capital,rice basmati common and Pusa-1121 variety fell by Rs 200 each to Rs 5,800-6,000 and Rs 4,500-5,800 per quintal respectively.

Barley shed Rs 10 at Rs 1,250-1,260 per quintal.

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

Wheat MP (desi) 2,350-2,700, Wheat dara (for mills) 1,545-1,550, Chakki atta (delivery) 1,550-1,555, Atta Rajdhani 10 kg) 220, Shakti Bhog (10 kg) 220, Roller flour mill 825-830 (50 kg), Maida 890-900 (50 kg) and Sooji 1,000-1,010 (50 kg).

Basmati rice (Lal Quila) 10,400, Shri Lal Mahal 10,000, Super Basmati Rice 9,500, Basmati common new 5,800-6,000, Rice Pusa (1121) 4,500-5,800, Permal raw 1,700-1,750, Permal wand 1,900-1,925, Sela 2,300-2,400 and Rice IR-8 1,600-1,625, Bajra 1,200-1,205, Jowar yellow 1,590-1,600, white 2,650-2,750, Maize 1,325-1,330, Barley 1,250-1,260.

Profits dry up for Thai rice farmers

Thailand’s unusually long drought will have little effect on the global price of rice, but could leave millions of Thai farmers on the edge of destitution, with the government’s US$1.8 billion (S$2.5 billion) relief measures offering only temporary relief to deepening rural poverty.

While monsoon rains have finally started to spread across the country, several areas are still very short of the quantities of water required for a rice crop. For many farmers, the rains have come too late. The damage is done. An early government estimate forecast rice production falling by 2 million tonnes. The Thai Rice Exporters Association earlier this month said production would fall between 2 million tonnes and 3 million tonnes – around 15 per cent to 20 per cent of normal production.

Exports would reach 9.5 million tonnes – half a million tonne less than a previous forecast of 10 million tonnes, the association said. Thailand exported 10.8 million tonnes of rice last year.

Vietnam Rice Sellers Increase Some of Their Quotes Today; Other Asia Rice Quotes Unchanged

Vietnam rice sellers increased their quotes for 100% broken rice by about a $5 per ton to about $315-$325 per ton today. Other Asia rice sellers kept their quotes mostly unchanged.

5% Broken Rice

Thailand 5% rice is indicated at around $370 – $380 per ton, about a $25 per ton premium on Vietnam 5% rice shown at around $345 – $355 per ton.

India 5% rice is indicated at around $385 – $395 per ton, about $15 per ton premium on Pakistan 5% rice shown at around $370 – $380 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 $350 – $360, about $20 per ton premium on Pakistan 25% rice shown at around $330 – $340per ton.

Parboiled Rice

Thailand parboiled rice is indicated at around $380 – $390 per ton.

India parboiled rice is indicated at around $375- $385 per ton, about a $40 per ton discount to Pakistan parboiled rice was last shown at around $415 – $425 per ton.

100% Broken Rice

Thailand broken rice, A1 Super, is indicated at around $320 – $330 per ton, about $5 per ton from premium on Vietnam 100% broken rice shown at around $315 – $325 per ton, up about a $5 per ton from yesterday.

India’s 100% broken rice is shown at around $305 – $315 per ton, about a $20 per ton premium on Pakistan broken sortexed rice shown at around $285 – $295 per ton.

Floods caused Rs334bn loss a year

Floods have taken toll in each of the last five years, causing loss of Rs334 billion a year in monetary terms to the country, according to a recent report by the US World Resource Institute.

The study indicates that Pakistan’s GDP is affected by one per cent annually due to river flooding. While the agriculture sector bears the brunt of the blow, transportation sector also suffers and due to disruption in supplies of goods, food prices start to run high.

Food inflation which weighs around 35pc in the CPI basket has the potential to lead to higher inflation. The government has set an inflation target of 6pc for FY16.

Until now, the flooding this year has inundated around 200 villages, mainly those of Chitral, D.I. Khan, Layyah, Muzaffargarh and Dera Ghazi Khan and around 0.3m people have been rendered homeless.

“According to reports around 400,000 to 500,000 cotton bales, which account for 4pc of cotton production, have been affected from flooding which could marginally affect agricultural output and GDP growth,” says Umair Naseer, economist at Topline Securities.

“So far, key provinces where agriculture and industrial activities are high, like Punjab and Sindh, have not been affected.”

But Umair cautions that it is too early to predict the exact amount of damage by flooding this year. However, if it continues to rain, other Kharif crops, including rice, sugarcane and maize, may also suffer.

Agriculture has 21pc weightage in GDP and major crops account for 5.4pc of the GDP.

Besides agriculture, the wheels of manufacturing facilities could also start to turn slower as infrastructure loss could affect transportation sector.

As a result, industry off-take, especially those of cement and fertiliser, could decline in the short run while construction activities have already slowed down due to heavy downpour and flooding.

The third sector that could have to bear losses would be the insurance business as insurance companies would brace to face higher claims.

Economists believe that floods would be negative for cement, fertiliser and insurance sectors and ‘neutral’ for the remaining sectors, such as E&Ps, OMCs and refineries, power, banks, auto assemblers, telecom, textiles and consumer goods.

Lower global rice output seen on PH production concerns

The expected volume of globally harvested rice for the crop year 2015-2016 that started this month was adjusted downwards due to production concerns in the Philippines.
According to the Food and Agriculture Organization (FAO), worldwide production is now forecast at 499 million tons, down by 2 million tons from last month’s figure.
Still, the reduced forecast is 4 million tons or 0.8 percent higher than the estimated 495 million tons harvested in the previous 12 months.

“Rice production [is] curbed, mainly on less positive prospects for India and the Philippines, and despite much improved expectations for Indonesia,” the latest monthly Market Monitor report of the Agricultural Market Information System (Amis) stated.
The Amis, an interagency body administered by the FAO, said rice-planting conditions remain mixed across the globe.
For example, conditions are generally favorable in India and China while there is some concern in Vietnam due to dry weather.
Similarly, “in the Philippines, planting of the wet season crop continues and there is some concern over dry conditions,” the Amis reported.
The Amis observed that conditions in Thailand, Vietnam, and the Philippines are drier than average, consistent with expectations for the El Niño years.