Monthly Archives: October 2015

Thai rice exporters to finance storage in effort to support market

Thailand’s rice export industry group will finance storage of 100,000 tonnes of Asia’s staple food in an attempt to stem falling prices as farmers bring in their main crop, the head of the group and the Thai commerce minister said on Friday.

The measure is the latest announced by Thai authorities as they seek to soften the impact on farmers of selling their grain at prices near an 8-year low.

Rice exporters will buy the rice at market price and the Thai Rice Exporters Association will foot the bill for storing it from December through February, Commerce Minister Apiradee Tantraporn told reporters.

Taking the rice off the market for a few months would help stabilise prices, she said.

Thailand is one of the world’s largest rice exporters and is still sitting on stockpiles of millions of tonnes of rice built up under the generous subsidy scheme of former Prime Minister Yingluck Shinawatra.

The military government of Prime Minister Prayuth Chan-ocha ended the subsidy scheme when it overthrew the remnants of Shinawatra’s government in May 2014. Prayuth criticised the subsidies as vote-buying measures and offered little support to Thailand’s rural poor during his first year in power.

But with the economy performing poorly and discontent rising with Prayuth’s government in the countryside, the junta has announced a raft of measures since August aimed at boosting the rural economy.

The cabinet on Tuesday approved a US$1.13 billion (S$1.6 billion) plan to fund soft loans and grants to farmers.

The cost of storing the rice will be around 50 million baht (S$2 million), said Charoen Laothamatas, head of the Thai Rice Exporters Association.

“We have to help each other. As Thais, we’re all in this together,” Charoen told Reuters. “We don’t want to see farmers suffer.”

The 100,000 tonnes of rice is worth around 2.6 billion baht. Thailand has stocks of about 13.3 million tonnes but aims to reduce that to 4 to 5 million tonnes by the end of next year, Charoen said.

Thailand would export no less than 10 million tonnes of rice next year, he said. That would be around the same level as the 9.5 to 10 million tonnes the association expects Thailand to export in 2015.

The government is negotiating deals with Iran and African countries, he added.

Rice from Sino-S’pore food zone for sale soon

The first batch of Japanese rice grown in Singapore’s only agribusiness park in China will be on shelves here by December.

A pilot batch of 60 tonnes of the short-grain sticky rice will be sold in all FairPrice Xtra hypermarts and Finest supermarkets in 2.5kg and 5kg bags.

The price will be “affordable and competitive”, said Mrs Mui-Kok Kah Wei, senior director of purchasing and merchandising at FairPrice.

The Sino-Singapore Jilin Food Zone, as the park is called, showcased the product – the first it produced since it started in 2012 – at a food seminar here yesterday.

Japanese rice, which is imported here from Japan, the United States and Vietnam, has become more popular in recent years, with consumption more than doubling since 2011. Singaporeans consumed 1,359 tonnes of the rice last year, up from 602 tonnes in 2011.

Output from the agribusiness park in the north-eastern Chinese city of Jilin will provide an additional source, said Mr Yeo Chun Cheng, chief executive of the park and executive vice-president of Singbridge.

He told a briefing yesterday that the food zone will roll out more products in the coming months.

They will be sold in Singapore first before being distributed in other markets, including China.

“Anything coming out of this zone will be safe and of good quality,” said Mr Yeo. “And if Singaporeans like them, then they are likely to succeed elsewhere.”

Dr Lee Boon Yang, the park’s chairman, added: “(The park) is aimed at demonstrating a replicable and scalable model food zone for efficient production of safe and high-quality food.”

The park is a joint project started in 2012 by the Jilin city government and Singbridge, which is part of the Ascendas-Singbridge group that is majority-owned by Temasek Holdings. At 1,450 sq km, it is roughly twice the size of Singapore.

It has attracted 15 investment projects, including an integrated pig farm, a salmon farm and herbal beverage production. Their total worth is valued at more than 10 billion yuan (S$2.2 billion).

The 5 billion yuan integrated pig farming project, a joint venture between Singapore Food Industries and Thailand’s Charoen Pokphand Group, will start operating by the middle of next year.

It aims to produce 300,000 pigs a year by 2019, with 100,000 earmarked for Singapore.

The park is the only area in China endorsed by Singapore’s Agri-Food and Veterinary Authority as a disease-free zone. This makes it suitable for rearing pigs, which could add to Singapore’s source of imported pork.

The food zone signed four memorandums of understanding with investors yesterday, including one on a joint project to produce high-quality infant milk powder.

Pakistani suppliers to attend European fair

Foreign-trained suppliers from Pakistan are poised to showcase high quality natural ingredients to the European fair, seeking partnership in the high-end market.

Under the aegis of Centre for the Promotion of Imports from Developing Countries (CBI), new suppliers from Pakistan and South East Asia have been geared to clinch partnership with European Companies.

Premium natural ingredients like, dried mango, rice and coconut palm sugar are just a few of the high quality ingredients to be showcased at the CBI Pavilion during Fi Europe 2015, in early December in Paris Nord Villepinte.

It will be an exciting opportunity for both buyers and sellers about experiencing the highest standard of ingredients and meet 11 producers and suppliers from Indonesia, Pakistan and the Philippines who are trained, qualified and ready for European partnerships under a series of programs by the Centre for the Promotion of Imports from Developing Countries.

Some highlights to be sourced and showcased at the Centre for the Promotion of Imports from Developing Countries include new and organic products like organic coconut palm sugar from the Philippines; a healthy alternative to sugar and honey, new suppliers of ingredients from Pakistan, such as dried exotic fruits & nuts, herbal ingredients and spices.

These efforts are part of the Centre for the Promotion of Imports from Developing Countries’s endeavour to contribute sustainable economic development in developing countries through the expansion of exports from these countries.

At European fair, exhibitors can find Pakistani suppliers of high quality rice products and Himalayan salts for food and spa’s.

Each supplier has been carefully audited in terms of quality, consistency and reliability and has invested heavily to prepare for stringent market requirements, adapting processes and products to European standards.

Over the past four decades, CBI has successfully linked European buyers with reliable suppliers and new sources in emerging markets.

All companies are enrolled in the extensive CBI training in export management, product development, production management, quality assurance and the requirements necessary to succeed in the European marketplace.

All 11 companies present at the CBI Pavilion will continue to be mentored and guided by experienced CBI experts as they build their new trade relationships in the European Union.

Companies exhibiting at the Centre for the Promotion of Imports from Developing Countries Pavilions from Pakistan include: Shahpur Industries & Spices: Several varieties of rice and Himalayan salts; Lutfabad Farms Pakistan: Fresh and dried mango slices; MG Khan Traders: Japonica sticky rice and dried fruits; Kausar Rice & General Mills: rice, including basmati and non-basmati, brown (non-milled), parboiled and steamed; Kanwal Trading Company Pvt. Ltd.: rice, sesame seeds, spices and pulses; Minex International: Himalayan pink salts for cooking, barbecue, bath and spa; Perfect Food Industries: Dehydrated mango slices, red chili, turmeric, garlic, onion, fenugreek, mint and dried apricot; Zaiqa Food Industries: Spice mixes, plain spices, cooking pastes, sauces, pickles, fried onion, etc.

Single brand to strengthen market for fragrant rice

Cambodia must focus on building a single recognisable brand for its premium fragrant rice to strengthen its international marketing efforts, Minister of Commerce Sun Chanthol said yesterday.

“Once the consumer recognises our rice brand, as well as the design of the rice package, we will be able to fetch a higher price for our premium rice,” Chanthol said during a roundtable discussion with the British Ambassador.

Cambodia’s Phka Rumduol – a long-grain, aromatic variety of rice – has been awarded the World’s Best Rice at the annual World Rice Conference for three years running. But efforts to market the premium rice variety overseas have stumbled on labeling.

The most prevalent export label, “fragrant rice”, has been deemed too general, while the alternative label “jasmine rice” is also used by Thailand for their premium variety.

While Cambodia’s fragrant rice comes in a number of varieties, such as Phka Romdeng, Phka Romeat, and Phka Rumduol, the commerce minister said all should be marketed under an umbrella brand name.

“We should promote and stick to ‘Phka Romduol’,” he said. “This is what won the contest, so please let’s focus on this name and register it as a trademark or trade name for future use.”

Chanthol said the branding should extend beyond a name and include the packaging, which should incorporate traditional Khmer design elements and his ministry’s seal of approval.

He said a final decision on the sole brand name for the Kingdom’s premium fragrant rice would be made following consultations with the Cambodian Rice Federation and government agencies.

Turning to the issue of quality control, Chanthol rapped some local rice exporters accused of passing off imported aromatic rice as local product. He said consistent high quality was crucial to protecting Cambodia’s reputation as the producer of the world’s best rice.

David Puttnam, the UK Prime Minister’s trade envoy to Cambodia, said more efforts were needed to maintain the quality and consistency of rice exports, and to ensure that shipments of premium fragrant rice were not adulterated by lower-quality varieties.

“The most important thing is the integrity of the product,” he said. “Create the product, get confidence in the product, and then go out and say this is the best in the world.”

Puttnam said quality control was pivotal to landing supply contracts with big buyers. The entire supply chain must be disciplined to prevent its weakest links from destroying the brand reputation the country is working so hard to build, he added.

Rice is Cambodia’s most important agricultural commodity and a staple food item. Milled rice exports reached 387,000 tonnes in 2014, far short of the government’s target of 1 million tonnes a year by 2015.

Thai govt approves RM 4.7 billion worth of measures to help rice farmers

Rice HQ

Thailand’s cabinet approved measures worth about 40 billion baht (RM 4.7 billion) to help rice farmers, a government spokesman said today.
The government gave the green light to three measures to help rice farmers prepare for the next harvest, including credits and an interest rate reduction for farmers, Sansern Kaewkamnerd, a government spokesman, told Reuters.
An interest rate cut by state-owned Bank of Agriculture and Agricultural Cooperatives (BAAC) for one million families, steps to help co-operatives and communities collect rice from markets, and grants for farmers in the country’s north and northeast were among the measures approved, said Sansern.
The measures come after growing criticism levelled at the military regime from rice and rubber farmers who have seen their income fall following the end of the subsidy schemes, introduced by an ousted civilian government, that funnelled billions of dollars to agricultural communities.

The military government that took power after a 2014 coup slashed rural subsidies saying it wanted to wean farmers, who make up a large percentage of Thailand’s 67 million population, off expensive schemes used by previous administrations.
It has acknowledged in recent months that weak exports and low global commodity prices have hurt rural income.
Somkid Jatusripitak, a deputy prime minister, told Reuters last month that he would prioritise reviving the rural economy.
Last year the military government offered rice and rubber farmers a direct subsidy of 1,000 baht ($28.18) per rai (0.17 ha), capped at 15,000 baht.

Peace or not, India & Pak first need to unite to save Basmati

It will be a ‘do or die’ situation for India’s Basmati, which occupies pride of place in the country’s agricultural trade, when the Chennai-based Intellectual Property Appellate Board (IPAB) next week takes a call on granting ‘GI’ (geographical indicator) tag to the world famous long grain aromatic variety of rice. Chances of it getting the tag depends on whether India joins hands with Pakistan to get a joint registration by prevailing upon Madhya Pradesh to withdraw its claim of being included in the geographical area for Basmati.

If Basmati fails to get the tag, India and Pakistan will lose its exclusivity in the world market. Obviously, India will be the bigger loser because it has more than 95% of the share in the exclusive geographical zone for this unique variety Besides, the share of Basmati is also quite high in India’s overall rice export. Roughly, Basmati contributes Rs 33,000 crore out of total Rs 40,000 crore worth of the country’s annual rice export.

If India does not get the tag, there is a possibility that China may get this variety from Pakistan and go for large-scale cultivation in newly acquired big farms in different African countries under different agreements.

“Kenya, Tanzania and Ethiopia are among certain east African countries where conditions are conducive for Basmati cultivation. China has acquired big farms in these and other east African countries,” said an Indian scientist on condition of anonymity.

Though MP had not traditionally been part of the areas that cultivate Basmati, it staked its claim for getting specific areas in 13 of its districts included in geographical areas when farmers there opted for this high-paying variety in the past few years. Pakistan, which has traditionally been cultivating Basmati in its Punjab province, opposed MP’s move, forcing the matter to reach before the IPAB.

Besides MP, Rajasthan and Bihar had also staked their claim for being included in the geographical areas for Basmati. But Indian agriculture scientists claimed these two states preferred not to be parties to the dispute in larger national interest.

Sensing the urgency ahead of the crucial hearing, India’s premier agriculture research institute — the Indian Agricultural Research Institute — has requested the government to join hands with Pakistan in India’s interest. The issue was flagged by IARI joint director K V Prabhu during a conference in New Delhi on October 16, where he had said, “We do not want others like China to introduce Basmati in global trade at low prices and spoil our market, which is potentially imminent.”

Thailand Swears Off Subsidies in Bid to Cut Crop Surpluses

Thailand, the world’s largest rice exporter, vowed not to reintroduce subsidies in the face of a worsening drought as it pushes ahead with plans to eliminate crop surpluses.
Restoring market balance and improving farm income are key planks of Prime Minister Prayuth Chan-Ocha’s policy as the government seeks to restructure the farm sector and to eliminate the stockpile of 13 million metric tons of rice built up by former Prime Minister Yingluck Shinawatra at a cost of 885 billion baht ($25 billion).
“This government will definitely not interfere with product prices,” Chatchai Sarikulya, Minister of Agriculture and Cooperatives, said last week in an interview in Bangkok. “We want prices to move in line with the market mechanism. We focus more on strengthening farmers.”
Water levels in the four main reservoirs in Thailand’s central provinces dropped to the lowest since 1993 amid an El Nino-induced drought. The central region normally accounts for nearly half the nation’s rice output during the dry season that runs from November to April.
“We’re worried about this intensifying situation,” Chatchai said. “There’s risk that drought could damage rice crops. The government hopes farmers will not plant rice during the dry season as we have warned them in advance about inadequate water supply.”
Price Plunge
Chatchai wants to discourage planting of crops such as rice in favor of higher value products to help increase farm income and reduce overproduction. Last month, the benchmark domestic price of Thai rice fell to $350 a ton, the lowest level since 2007, according to the Thai Rice Exporters Association.
Thai rice production exceeded local demand by about 50 percent last year and rubber output exceeded consumption seven-fold, according to government data.
Output of rough rice may decline to as low as 22.98 million tons in 2015-16, the least since 1996-97, assuming there is no planting during the dry season starting in November, Thailand’s Office of Agricultural Economics said in September. That’s down 30 percent from 32.62 million tons a year earlier. Production may total 24.69 million tons if 20 percent of rice is planted in the dry season, the office estimated.
El Nino is changing weather across the globe, baking parts of Asia and bringing torrential rains to parts of South America. It threatens to parch fields in Asia and may disrupt harvests worldwide.
The government wants farmers to switch to high-value farm products that meet market demand and reduce surpluses through a voluntary crop zoning policy, that would match crops to soil conditions and water supply. The ministry is setting up 882 centers nationwide to educate farmers on zoning, farming technique and marketing.

Indonesia to decide on rice imports within two weeks

Rice HQ

Indonesia will decide within two weeks whether to ship in rice from Vietnam and other Asian countries, the head of the state food procurement agency said, as dry weather crimps local output and stokes domestic prices for the staple grain.
Indonesia, which is battling dry weather caused by the El Nino weather pattern, already has a contingency plan in place to import rice from Vietnam if needed.
Rice imports are a contentious issue in the country where President Joko Widodo is faced with fast-rising food prices but is also pursuing self-sufficiency in various foods to protect farmers.
“Yes it is true,” Bulog CEO Djarot Kusumayakti told reporters late on Monday, when asked whether Widodo would decide within two weeks whether to begin imports from Vietnam.
Kusumayakti, who earlier this year predicted rice imports would likely happen in early 2016, said calculations on potential volumes were still ongoing.
“Their (Vietnam) commitment was for 1.5 million tonnes,” he added. “But with limited time, their (port) capacity is not sufficient. They might only provide 1 million tonnes.”
There have also been talks with Thai rice sellers for about 500,000 tonnes, he said, adding that suppliers were also being sought in Myanmar, Cambodia and Pakistan.
Since coming to power a year ago, Widodo has aggressively pursued self-sufficiency in various foods as part of an increasingly nationalistic approach to protecting farmers, curbing state imports of rice in a country where private buying from overseas has been largely banned for decades.
The government had given Bulog a target to buy 4 million tonnes from domestic producers in 2015, but the agency has so far only procured around 2.5 million tonnes, with Kusumayakti estimating purchases for the year would total less than 3 million tonnes.
Bulog is the dominant rice buyer in Indonesia, tasked with maintaining annual stocks of 1.5-2 million tonnes.
Analysts have forecast that Indonesia will import 1.6 million tonnes of the staple grain this year.
Last week, the latest rice loading schedule data from Vietnam’s largest port showed 63,100 tonnes of the grain was loaded on vessels destined for Indonesia.

Apeda plans retail push for basmati in overseas markets

Rice HQ

In a bid to promote the basmati exports in retail packs with Indian brands, the Agricultural Products Export Development Authority (Apeda) plans to launch a campaign in key markets such as Saudi Arabia and Iran.

At present, a major chunk of the exports are shipped in bulk form and sold under private labels owned by the importers.

Apeda has invited expression of interest from agencies to launch this promotional strategy that is expected to boost the shipments of the basmati rice.

Basmati holds a major place in Apeda’s export basket accounting for close to a fourth of the total shipments in value terms.

Campaign details
“We are working with the All India Rice Exporters Association on this proposed campaign, which may be launched early next year,” said AK Gupta, Advisor, Apeda.

“Initially, the campaign is proposed to be undertaken in Saudi Arabia and Iran, which account for over 50 per cent of the total exports,” Gupta said.

The initiative is aimed at creating better consumer awareness and education about the Indian basmati rice, while helping the exporters realise better value for their produce, Gupta added.

Further, he said that Apeda, as part of the proposed campaign, would be working with only those brands that already have a presence in these overseas markets.

Exports data
Basmati rice exports have seen a major increase over the past few years from about seven lakh tonnes in 2000 to over 37 lakh tonnes (lt) in 2015. In the current financial year for the April-August period, basmati shipments have seen an increase of 17 per cent in volume terms at 16.78 lt against 14.35 lt in the corresponding period last year, according to Apeda data.

However, in rupee value terms, the basmati shipments have declined 18 per cent to ₹9,940 crore for the April-August period against ₹12,180 crore in corresponding last year, mainly due to lower prices.

The shipments in dollar terms have dropped 23 per cent for the period at $1.559 billion ($2.031 billion).

Iran imports
Meanwhile, Iran is yet to resume the imports of Indian basmati, which it had banned mid-November last year to protect the interests of local growers on higher domestic output and stocks.

“We expect that Iran will resume imports in the next couple of months,” Gupta added.

Iran imported about 9.35 lt of basmati in 2014-15, accounting for about a fourth of the Indian shipments.

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

Rice prices at nine-month high in Vietnam, stable in Thailand

Vietnamese rice prices jumped this week to a nine-month high as exporters prepared loading for the Philippines and Indonesia amid potential fresh demand from Manila, while Thai rice prices were unchanged, traders said on Wednesday. The price hike in Vietnam, the world’s third-largest rice exporter after India and Thailand, started last month after it won a Philippine tender to supply 450,000 tonnes. Prices jumped again on Indonesia’s 1-million-tonne demand.

Vietnam’s 5-percent broken rice rose to $370-$300 a tonne, free-on-board (FOB) Saigon Port, from $355-$360 last Wednesday, while Thai 5-percent broken grain stood unchanged at $360-$365 a tonne, FOB basis. The recent jump in Vietnam rice prices could force buyers such as China towards Thailand and Pakistan, where prices are lower, traders said. “If anyone wants to buy now, rice is not ready,” a Vietnamese trader in Ho Chi Minh City said.

Despite a small harvest has been underway in the Mekong Delta, supply has become tight and Vietnamese exporters have stopped offering the 25-percent broken rice often sought by the Philippines, traders said. Indicative prices of the variety stood at $365 a tonne, up from $335-$345 a week ago. Traders said prices in Vietnam might ease in late February or early March, when fresh supplies arrive from the next crop’s harvest in the Mekong Detla.

In Thailand a stable currency and a lack of buyers have kept stable the export quotations for the 5-percent broken rice in the past two weeks, which have risen from $360 a tonne in early October, traders said. But Thai rice prices could advance if Thailand reaches any agreement to sell the grain to Indonesia, traders said. “If there is a successful agreement, prices will probably go up,” a trader in Bangkok said.