Monthly Archives: March 2016

Thailand sells 418,000 T of rice in second auction of 2016

Thailand’s military government sold 418,000 tonnes of rice from state stockpiles on Wednesday in its second auction of the year, the commerce ministry said, in a bid to offload stocks built up following a rice-buying scheme under the previous government.

Thailand, the world’s second-biggest rice exporter after India, has stocks of about 12 million tonnes and its military government has auctioned off 5.05 million tonnes of rice worth $1.53 billion through several tenders since taking power in 2014.

The government plans to clear the entire stockpile in warehouses by end-2017.

The commerce ministry said on March 16 that it aimed to sell a total of 641,000 tonnes of rice for human consumption and industrial use in its second auction.

In the first lot auctioned on Wednesday, 14 private firms out of 38 successfully bid for 418,000 tonnes of rice worth 4.43 billion baht ($126 million).

The ministry will auction a second lot of 223,000 tonnes of grade ‘c’ rice for industrial use on Thursday.

Wednesday’s auction included rice that the government has said is fit for human consumption, including sticky rice and Hom Mali, or jasmine rice, from 66 state warehouses in 26 provinces.

Thailand aims to export 9.5 million tonnes of rice this year, and has so far exported 2.65 million tonnes worth around 41.51 billion baht ($1.18 billion).

Dastgir replaces commercial attaché in Saudi Arabia

The Minister for Commerce Khurram Dastgir has decided to replace the commercial attaché in Saudi Arabia, who according to rice exporters was not adequately performing his professional duties.

The Rice Exporters Association of Pakistan (REAP) had earlier criticised the performance of the commercial attaché, saying that the official was not doing enough to help Pakistani exporters.

“Pakistan’s rice exports are already declining in Saudi Arabia; on top of it the unprofessional attitude of the commercial attaché created unnecessary problems,” said the REAP Chairman Chaudhry Muhammad Shafique.

“It is our aim to take the country’s rice exports to $4 billion from the current $2.5 billion, but such attachés make such targets unachievable,” stated REAP in a press release.

The association hoped the new commercial attaché would take his job “seriously” and do everything to support Pakistan’s exports in Saudi Arabia.

REAP had demanded the commerce minister to remove Waseem Hayat Bajwa, the commercial attaché in Saudi Arabia, for his unprofessional attitude, obstinacy and indifference.

A large delegation of REAP and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) failed to visit Saudi Arabia last year because Bajwa was unable to get visa letters on time.

Since he took charge, the commerce minister has been under pressure from exporters to replace all commercial attachés, especially in crucial markets.

According to exporters, many attachés are political appointees. “Their performance is unsatisfactory and that is why Pakistan’s products have not marketed properly in recent years.”

The Ministry of Commerce, however, has only been been able to finalise new officials after a gap of two and a half years. “The new batch of over 30 new commercial attachés will be dispatched in the next two to three months,” said Dastgir, replying to a question during his press conference.

Explaining reasons for the long delay, he said, “The attachés had to be selected through a rigorous process to meet the requirements of the job i.e. to market Pakistan’s products in different countries.”

Envoy for Pak rice exporters role in trade with Germany

German Ambassador to Pakistan Ms Ina Lepel has asked the rice exporters to play role in promoting bilateral trade and hence further strengthening economic ties with Germany.
Addressing members of Rice Exporters Association of Pakistan (REAP) on Wednesday, Ina said there was a great need for diversifying the two-way trade, as $2.3 billion trade volume recorded in 2014 was not up to the real potential both countries had.
“We have good economic relations but there is more room to further enhance these relations,” the ambassador said, adding, “Germany has more strong trade relations with Bangladesh, Sri Lanka and Malaysia as compared to Pakistan.”
She added that Germany had financially supported major hydropower projects and also the up-gradation of distribution system in Pakistan.
She said that Germany was currently focusing on renewable energies and energy efficiency in Pakistan. “The German Embassy is working with the Pakistani business community to strengthen business institutions,” the ambassador told REAP members.
Ina hoped the granting of licence to Pakistan-German Chamber of Commerce and Industry would further improve bilateral trade and economic relations.
She urged the exporters to pay attention to organic rice export, as Germans were very conscious about nutrition and health.
REAP Chairman Chaudhry Muhammad Shafique, in his address, said that in 2012-13, Pakistan exported 127,953 metric tonnes of Basmati and non-basmati rice varieties to the EU countries, which came to $111.812 million, while the current export to the EU countries stood at 206,000 metric tonnes per annum.
“In 2013-14, Pakistan’s exports to Germany were recorded at 9393 metric tonnes, which rose to 11,986 metric tonnes in 2014-15,” he informed.
He requested the German ambassador to relax visa policy for genuine businessman so that rice exports to Germany could be increased.
Shafique pointed out that developing countries were the largest rice producers as well as exporters and accounted for more than 80 percent of the world’s rice export.
“Especially, the Southeast Asian countries dominate the industry because of their diverse varieties and best quality of rice,” he informed.
He said since rice was an important staple food that was why it was mostly consumed in the country where it was cultivated, and less than 8 percent of that production was traded internationally.
“REAP has an incredible track record of earning $2 billion for the fourth consecutive year,” REAP chairman said, adding, “Different varieties of rice were grown in Pakistan such as Super Basmati, 1121 Kinat, Basmati PK-385, Irri-6, Irri-9 and KS-282 extra-long grain rice and PK-386.”
He said Pakistan was known for its aromatic rice (Super Basmati/Basmati PK-385).
“While Punjab has abundant Basmati Rice, Sindh, on the other hand, has the Irri varieties,” Shafique informed.
He added that currently Pakistan was the world’s fourth largest exporter of rice, with an annual production of more than 7 million tonnes, out of which 4 million tonnes were exported around the world; hence capturing around 15 percent of world’s total rice trade.

Rice sales slim as high prices keep exporters away

Rice trade in top Asian producers – Vietnam and Thailand – was slim this week as high prices kept buyers at bay, while severe droughts put more pressure on these countries’ limited supply, traders said on Wednesday.
Vietnam 5-percent broken rice remained unchanged from the previous week at $380-$385 a metric ton, free-on-board (FOB) basis, while the same grain in Thailand widened to $367-$381 a metric ton, from $371-$383 last week, traders said.

Rice export prices stayed high in Vietnam, the world’s third biggest rice exporter, as limited supplies prompted stockpiling by domestic traders and farmers as severe drought stressed the situation further.

“Buyers immediately jump to other markets such as Pakistan after hearing our rice prices,” said a Ho Chi Minh City-based trader.

Salination and dryness have affected 160,000 hectares (395,000 acres) of rice so far this year in the Delta, or about 10 percent of the total area planted under the key crop, according to theAgriculture Ministry of Vietnam.

Thailand is also facing its worst water shortage in two decades, while a shift in the baht/dollar rate widened the prices. Thai baht depreciated to 35.44 baht on Tuesday from 35.1 last Wednesday.

“Thai rice prices have hit a low number. They only appear to go up or down because of the baht/dollar rate,” said a Bangkok-based trader, citing that the value of rice itself has remained flat for months.

There was no deals signed from overseas importers in the world’s second-biggest rice exporter.

“There’s no order. It’s all very quiet,” said a Thai trader.

Thailand’s rice, corn recovering from drought

Thailand’s market year 2016-17 rice and corn production is expected to gradually recover from drought-reduced production in market year 2015-16 due to an acreage expansion and average yields, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Services (FAS) said in March 18 report.

Rice production is forecast to increase to 17.5 million tonnes, up 11% from 15.8 million tonnes in market year 2015-16 assuming some recovery of off-season rice production. Unlike in 2016, when new-crop rice supplies are tight, larger supplies of new-crop rice in 2017 will potentially boost Thai rice exports to 10 million tonnes. Meanwhile, tight supplies of new-crop rice in 2016 will likely limit Thai rice export potential at around 8 million tonnes despite heavily subsidized sales of the government stocks.

Thailand market year 2016-17 corn production will likely increase to 4.9 million tonnes after two consecutive years of drought. Meanwhile, the growth in demand for feed will likely decelerate in 2016 due to a slowdown in boiler production. This will lower the import demand for feed wheat in market year 2016-17, in contrast to market year 2015-16 when feed wheat imports increased to record 2.1 million tonnes. This is due to the shortages of domestic corn and broken rice.

Feed wheat imports are expected to decline to 1.5 million tonnes in market year 2016-17 due to a recovery of domestic production of corn and larger supplies of broken rice. Meanwhile, market year 2016-17 milling wheat imports will likely increase significantly to 1.4 million tonnes, particularly for high-protein wheat from the U.S. due to expanding capacity of large bakery manufacturers.

Big rice importers cancel rice imports from Vietnam

Vietnam has lost rice export contracts as some of its major markets including Indonesia and the Philippines have canceled their import plans.

Rice HQ

The Vietnam Food Association (VFA) has confirmed the information, saying that political factors in the first months of 2016 have affected import/export activities.

Dan Viet reported that Bulog, the Indonesian Bureau of Logistics? has ceased rice transactions with four supply sources which have memorandum of understanding (MOU) with the Indonesian government, namely Thailand, Pakistan, Cambodia and Vietnam in the February plan.

The head of the country’s Ministry of Agriculture believes that Indonesia has sufficient rice for the domestic demand and no need to import rice. The official also attributed the fluctuations of the domestic market to speculation, affirming that this will be stopped.

VFA has said that because of political issues, Indonesia would not import rice until the domestic price soars on the short supply. Import demand of the market will be clearer after Indonesia assesses the post-harvesting yield, slated for June.

The Filipino National Food Authority (NFA) has also canceled the plan to import 400,000 tons of rice it announced earlier this year.

The country is also awaiting the information about stocks, while it may allow private businesses to import 1 million tons of rice under the WTO’s minimum access volume (MAV) mechanism which includes 500,000 tons from special countries and the remaining 500,000 tons from other sources.

VFA said the Filipino import plan is also controlled by political factors. Some officials said the mechanism allowing businessmen to import under the WTO’s MAV has led to massive smuggling, thus badly affecting domestic production and the country’s food self-sufficiency policy.

A VFA official said the decisions by Indonesia and the Philippines, the two major export markets, have caused Vietnam lose big contracts. However, he does not think this would hurt Vietnam’s rice production and export.

The rice price in the Vietnamese domestic market has been increasing rapidly as export companies now rush to collect rice to fulfill the export contracts they signed before. Meanwhile, the demand from China is very high.

Phap Luat reported that farmers and merchants all try to store rice in anticipation of the price increase and short supply caused by the serious drought in Mekong River Delta.

The newspaper cited a source as reporting that the export volume in February was 400,000 tons higher than planned, which was 5.44 percent higher than the months before and 117 percent than last year in the same period.

“The rice price has increased by VND500 per kilo. The price increase is seen in all provinces and cities in the region,” said Pham Thai Binh, director of Trung An Company.

Namhong Asks Malaysia to Invest in Rice Mills

Foreign Minister Hor Namhong called for Malaysian businessmen to invest in rice mills and high-quality milling technology during a farewell meeting with the Malaysian ambassador to Cambodia, whose mission in the Kingdom ended yesterday.

Foreign Ministry spokesman Chum Sounry said Mr. Namhong emphasized the award-winning quality of Cambodian rice during his conversations with Ambassador Dato Raszlan Abdul Rashid.

“His excellency [Mr. Namhong] told the ambassador that Cambodian fields can produce four million tons of rice to export,” Mr. Sounry said. “But Cambodia is facing the problem of lacking rice mills to produce quality rice for exporting to foreign markets.”

Mr. Sounry added that Mr. Abdul Rashid told Mr. Namhong that Cambodian rice is the most popular in Malaysia.

According to Mr. Sounry, Malaysian investment in Cambodian sectors totaled $24 million in 2014, increasing to $62 million in 2015.

Recently, domestic rice millers and exporters in Cambodia asked the Commerce Ministry to prohibit imports of milled rice from Vietnam for six months or enact policy measures to stem them in order to boost Cambodian rice exports. It also called for both loans and improvements to infrastructure across the sector, as many analysts fear the industry’s collapse over the next several years.

Cambodian rice variety won the World’s Best Rice award at the annual World Rice Conference for three consecutive years, from 2012 to 2014. Milled rice exports from the Kingdom rose about 40 percent from 2014 to 538,396 tons last year, according to government figures. This amount, however, fell far short of the government’s export target of one million tons.

Pakistan wants good ties with all neighbours: Analysts

Analysts call for enhancing bilateral cooperation with Iran in diverse fields
Islamabad: Iranian President, Dr. Hassan Rouhani has said that his country desires to enhance mutual cooperation with Pakistan in diverse fields including education, technology and health.
Speaking in Radio Pakistan’s program, defense analyst Lt. General (Retd.) Amjad Shoaib said: “We are happy that another Indian spy has been apprehended in Balochistan and the network of India spy agency has been exposed. But this is not news for us. We are certain that India has been actively involved in sabotage activities inside Pakistan. We will certainly take this issue to the international forums. Now, our media and people have already realized that how deeply involved India is in our country. Indian Prime Minister Narendra Modi had admitted in Bangladesh that his country played a crucial role in the dismemberment of Pakistan. The Pathankot incident reflects the failure of Indian security agencies to safeguard its installations.”

Defense analyst Air Marshal (Retd.) Shahid Latif said: “The role of media was not vibrant in past but now it is changing. We have lot of evidence against Indian involvement but we could not present it to the world in an appropriate manner. We will have to intensify our diplomatic efforts to raise these issues at the international level. The arrested Indian spy should be presented before media and his interview broadcast to show the world the true face of Indian in making efforts to destabilize Pakistan. Our intelligence agencies should also strive to capture more Indian agents involved in our country.”

Senior analyst Dr. Shaheen said: “The arrest of Indian spy from Balochistan is not a new development, but India is continuously playing a dirty game to destabilize Pakistan. Pakistan has solid proofs on Indian involvement in Balochistan and Karachi and our government has already shared two dossiers with the United Nations in this regard. India is backing and sponsoring the terrorists in Pakistan and is behind many acts of terrorism. India should show maturity and not back such elements as it can harm the regional peace. It is also the duty of international powers to pressurize India to stop its nefarious designs in the region.”

IR expert Dr. Hussain Shaheed Soharwardi said: “The relationship between the United States and Iran is improving day by day and the sanctions have also been relaxed. Now, Iran once again has come into the mainstream due to the positive policies of Iranian President Hassan Rouhani. The Iran-Pakistan gas pipeline project was shelved due to the international sanctions on Iran but now it is the time that Pakistan should initiate this pipeline without any delay.”

Economist Dr. Mirza Ikhtiar Baig said: “Pakistan and Iran’s relations are improving after the lifting of sanctions from Iran. We have agreed for long term strategic relations. Both the countries have decided to increase bilateral trade up to 5 billion dollars in next five years. Pakistan is looking forward to export rice to Iran and it is optimistic to further enhance bilateral trade in diverse fields. Pakistan and Iran are brotherly neighboring countries and have potential to expand trade and have strategic prospects of engagement too.

Defense analyst Dr. Muhammad Khan said: “It is matter of great concern for Pakistan and entire world that India is playing a role of spoiler in the region, which is disaster for regional peace and stability. India portrays itself as secular and democratic country abiding by international laws. However, on ground it is involved in subversive activities and neighboring countries. It is promoting terrorism in Pakistan and trying to destabilize Pakistan. Pakistan should expose Indian true in front of global community. Pakistan is trying to get rid of menace of terrorism. Our security forces have conducted successful intelligence based operations and have dismantled the strongholds of terrorists.

IR expert Dr. Amna Mehmood said: “In my view, the visit of Iranian President will help to improve the bilateral relations between Iran and Pakistan. Iran is an energy rich country and wants to sell it to neighboring countries. Pakistan is facing energy shortage and it can buy oil and gas from Tehran. This meeting has enhanced the confidence of both countries on each other. Pakistan and Iran can mediate several disputes in Muslim world by performing their pro-active role. Pakistan and Iran have signed several agreements and are committed to increase trade volume up to five billion dollars.”

VN’s rice exports increase 40.8 percent in first quarter

For the first quarter of 2016, the country’s rice exports reached 1.59 million tons, an increase of 41.6 percent in volume and 40.8 percent in value against last year.

Rice HQ

Indonesia became Vietnam’s largest rice importer for the begining of this year, accounting for 31.42 percent of the market share, followed by China at 17.15 percent of the market share.

In the country, the rice prices from the winter –spring crop in the Mekong Delta are on the rise because China has sped up to buy rice from Vietnam.

In An Giang, fresh rice IR50404 increases VND 450 per kg from VND 4,550 to 5,000 per kg; rice OM 2717 up from VND 4,700 to VND 4,950; dried rice from VND 5,100 to 5,700 per kg.

In Bac Lieu, fresh rice hikes from VND 4,600 to 5,000 per kg; dried rice from VND 5,400 to 6,000…

On the other hand, farmers in Thot Not, Co Do of the Mekong Delta province of Can Tho yesterday sold rice at a cost of VND 6,200 to 6,300 per kg to traders.

The price level is higher VND 1,000 per kg against last end-February and VND 2,000 over end-January 2016. It is higest price level from the beginning of this crop.

According to Vietnam Food Association, dried rice prices in the Mekong Delta swing from VND 5,500 to 5,600 per kg and rice with 5 percent broken rice is sold at the price of VND 7,950 to 8,050 per kg.

This increase has caused farmers happy but enterprises are facing difficulties because they had signed export contract at the time when the prices were lower.

Currently, rice with 5 percent broken rice in Vietnam costs US$ 380-390 tons while Thailands’ rice is US$ 360 tons therefore Vietnam’s rice is hard to sell to the world’s market.

Rice export prices rise in Thailand and Vietnam

Rice export prices rose in Thailand and Vietnam this week as bad weather threatened to disrupt supply, with Thai rice propped up by a stronger baht and potential rise in demand from the Middle East and Africa, traders said on Wednesday. Thai 5-percent broken rice rose to $371-$383 a tonne, free-on-board (FOB) basis, from $365-$371 last Wednesday, while the same grain in Vietnam edged up to $380-$385 a tonne, from $375-$385 last week, traders said.

A severe drought is affecting production in the Mekong Delta food basket, while coastal Vietnam also suffers from one of its worst salinations, prompting stockpiling by both domestic traders and farmers in the world’s third biggest rice exporter. Salination and dryness have affected 160,000 hectares (395,000 acres) of rice so far this year in the Delta, or about 10 percent of the total area planted under a key crop, according to the Agriculture Ministry of Vietnam.

Thailand is also facing its worst water shortage in two decades, but traders neglected the annual weather disaster in the world’s second biggest exporter of the grain and attributed the price hike to a stronger baht. “Customers don’t find Thailand’s drought alarming anymore, because we face drought every year,” a senior trader in Bangkok said. Thai baht devalued for more than 4 percent against the US dollar since mid-January until late last week when the baht/dollar rate started picking up slightly.

A rebound in oil prices may also strengthen purchasing power of some oil-producing countries in the Middle East and Africa including Nigeria, once Thailand’s main importers, another Bangkok-based trader said. Despite a threat in supply, both countries saw little or no deals signed from overseas importers due to the price hike, meaning the quotations for the rice grades were indicative rates.

“Most of the purchases are domestic, with the state reserves department accumulating to ensure food security and Vinafood 1 buying to deliver existing offers,” said a Ho Chi Minh City-based trader. “Right now it is the exporters like us who are suffering,” another Ho Chi Minh City-based trader said.