Monthly Archives: May 2016

Cuba accepts shipment of MO rice from Governor Nixon

Leaders from Cuba formally accepted a 20-ton shipment of long-grain rice grown and processed in Southeast Missouri on Monday morning.

Governor Jay Nixon and leaders from the Martin Rice Company in Bernie, Mo. are part of a trade delegation in Cuba. The 20-ton shipment was sent to the people of Cuba by Martin Rice at no cost.

“Missouri farmers and workers produce the highest-quality products in the world and we are here to expand opportunities to get Missouri goods to Cuban consumers,” said Governor Jay Nixon.

According to the governor’s office, there have been no U.S. rice sales to Cuba since 2008.

Missouri now ranks fourth among U.S. states in rice production and Cuba was once a top export market for that rice.

Governor Nixon and other members of the delegation will meet with leading members of Cuban government officials in the areas of trade and agriculture.

China to Consider Rice Deal

Prime Minister Hun Sen yesterday asked China to consider Cambodia’s rice stocks as part of its effort to distribute food relief to other countries.

The request was made during a meeting between the premier and Ho Hau Wah, Vice-Chairman of the Chinese People’s Political Consultative Conference at the National Assembly.

Mr. Hau Wah is a former Chief Executive of the Macau Special Administrative Region of China and previously led about 100 Chinese investors and entrepreneurs in a seminar in Cambodia to discuss the potential of agriculture and tourism investments.

Dr. Kao Kim Hourn, a minister attached to the prime minister, said Mr. Hun Sen noted that China had been giving food assistance to other countries, “so Samdech [Mr. Hun Sen] has suggested that China should use Cambodia as a rice stock for China to help other countries.”

“This is one of the main requests by the prime minister. Now, China buys rice from Cambodia at about 100,000 tons a year.”

He added that the premier also said the World Food Program uses Cambodian rice stocks in its aid distribution efforts and that China’s acceptance to use Cambodian rice would benefit the Kingdom’s flailing agricultural industry.

“This [request] is to help boost the agricultural sector of Cambodia,” he said.

“He [Mr. Hun Sen] is finding a market for Cambodia, especially with powerful markets like China. If China choses Cambodia as a rice stock, it will be a good chance for the Cambodia market.”

In February, the Ministry of Commerce released a statement saying about half of the country’s rice millers and exporters went out of business last year and those clinging on are likely to follow suit within two years unless the government injects capital into the sector and takes measures to curb the flood of imported rice from Vietnam.

Mr. Hau Wah said he supported he premier’s request, and said China would consider it, Dr. Kim Hourn added.

This year, the government confirmed Cambodia had four million tons of rice to export and called on foreign backers to invest in the rice production sector in Cambodia.

New gov’t to curb rice import permit abuse

INCOMING President Rodrigo R. Duterte’s choice as Agriculture Secretary, Emmanuel F. Piñol, said he will allow private traders to import rice after all, but will impose more rigid safeguards against smuggling.

“We will still allow imports from private traders,” said Mr. Piñol in a phone interview over the weekend when sought to confirm his plan to ban private importers.

Mr. Piñol had said the directive came from the President-Elect.

“What happened is that the privilege [of importing] was abused. We will meet with them on Tuesday (today) and discuss how they can import while keeping them from abusing the use of import permits,” Mr. Piñol added.

President Benigno S. C. Aquino III recently signed a law imposing heftier fines on the large-scale smuggling of agricultural products.

Mr. Piñol is set to meet in Davao City with rice millers and the National Food Authority (NFA) to discuss the country’s rice stock. He said the government should prepare for a possible rice crisis on the back of one of the severest El Niño episodes the country has endured in years.

“This early, we’ll look at the inventory of NFA, rice traders, and millers with the expected rice shortage due to El Niño” said Mr. Piñol.

The Department of Agriculture (DA) forecast palay losses to hit 957,000 metric tons (MT) in the first semester. The agency’s latest report shows losses at 230,659 MT.

DA Undersecretary for Operations and Agribusiness and marketing Emerson U. Palad said the DA “[does] not see any possibility of a rice crisis.”

“[B]ut considering the La Niña, that’s something we cannot forecast,” he said.

The Philippine Statistics Authority — Bureau of Agricultural Research recently released its first quarter production report showing palay output slumping by 9.97% to 3.9 million tons, lower than the government forecast of 4.01 million tons.

Rice exporters look to Indonesia and Korea

To increase rice exports, Myanmar is looking to Indonesia and South Korea, says Khin Maung Lwin, the assistant secretary at the Ministry of Commerce.

Myanmar exports 90 per cent of its rice overland, mostly to China, with a bulk of sea exports going to Africa.

More than US$20 million was earned from rice exports this financial year until May 13, according to the ministry.

Rice accounts for 93 per cent of total land exports with a massive over-dependence on China. Penetrating overseas markets would take time, the ministry said.

Myanmar was paying more for rice than other countries, according to a report by Aung Than Oo, chair of the Myanmar Rice Merchants’ Association. It said between 2015 and January this year, the Pawsan rice price increased by 4.2 per cent, Emahta rose by 38 per cent and Ngasein rice by 39 per cent.

India-Indonesia deal on rice trade soon

India could sign a deal as early as this week to supply one million tonne of non-basmati rice to Indonesia to help it tide over a local shortage, reports Banikinkar Pattanayak in New Delhi.
Negotiations have been on for a government-to-government deal, in which case the grain will be supplied from official reserves. Once the memorandum of understanding is signed, this would be the highest export of rice from state-run Food Corporation Of India’s (FCI’s) reserves since 2003-04 when it had shipped out 2.78 million tonne, sources said.
For Indonesia, it will be a rare occasion when it sources rice from outside the ASEAN trading bloc, barring the exception of its recent deal with Pakistan.

While prices are being negotiated, India is interested in selling rice at the economic cost–which comprises the benchmark price paid to farmers for supplies and charges for transportation and storage, among others–to avoid losses on such exports, according to the sources.
A deal at the 2015-16 economic cost of rice will fetch India Rs 3,258 crore ($486 million), but more importantly, it will be a win-win situation for both the countries. Higher rice exports will help India, which is facing a decline in both rice as well as total farm exports. Indonesia, having struggled to finalise similar contracts with Thailand and Vietnam, seems to be keen on tapping the massive Indian grain market and diversifying import destinations.
However, Indonesia is learnt to be keen on lowering the price. According to the FCI, its economic cost of rice stood at Rs 32,580 ($486) per tonne for the common variety in 2015-16, which is estimated to go up to Rs 32,667 in 2016-17.
MMTC may be asked to supply rice from FCI’s reserves to Indonesia’s state-run Bureau Of Logistics, which handles food distribution and price control.
Both the countries are exploring the possibility of a long-term supply contract as well, although India wants to make it a non-binding one under exceptional circumstances. Apart from rice, Indonesia is also willing to enhance collaboration with India in pharmaceuticals, with a focus on generic medicine, said on of the sources.
Despite massive stocks, India has failed to export much from its official reserves even through government-to-government deals, mainly due to the fact that the economic costs of FCI grains are much higher than prices of Thai or Vietnam varieties. For instance, the 5% broken rice quoted an average of $395 per tonne in Thailand and $371 in Vietnam last month, while FCI’s 2015-16 economic cost was as high as $486 per tonne.
Negotiations with Bangladesh around 2010-11 to supply grains from official reserves fell through due to differences over prices. A major reason for the high costs of grains has been FCI’s “dis-economics of scale”, as stated in an earlier report by the Commission For Agricultural Costs and Prices. This means as FCI’s scale of operation increases, the per unit real costs also rise, in a stark contrast with the nature of operational costs of most companies. Consequently, the country hasn’t been able to export much of FCI rice since shipping 65,000 tonnes in 2004-05. As of May 1, rice stocks with FCI touched 21.32 million tonnes, much higher than the mandatory requirement of 13.58 million tonnes.
Indonesia is reported to have inked an agreement with Pakistan recently to import one million tonnes of rice at roughly $400 per tonne, to be supplied over a period of four years. However, Indian officials say our rice is better than the grain to be supplied by Pakistan to Indonesia, hence can’t be compared strictly. In case of a government-to-government deal, the State Logistics Agency (Bulog) of Indonesia will be involved along with the FCI.

FEARING EXTREME WEATHER, FARMERS SCALE BACK RICE CULTIVATION

Aung Kywe remembers how he had to stand by helplessly last year when massive floods in the wake of Cyclone Komen affected Ayeyarwady Delta and destroyed half of his 14 acres of paddy.

That traumatic experience came on top of years of decreasing yields, Aung Kywe said, adding that this monsoon season he will leave much of his land in Kawkatkyi Village, Zalun Township, fallow to avoid loss of money with another failed harvest.

“Paddy plots on the lower-lying land are almost sure to be flooded,” he said, adding, “Paddy yields have also decreased year by year, from 100 baskets per acre to 75 baskets.” A basket of rice weighs around 25 kilograms.

In neighbouring Maubin Township, also located in the heart of Myanmar’s ‘rice bowl’ delta region, farmers spoke of similar measures to limit exposure to what many believe are increased occurrences of climate change-related extreme weather, such as drought, heat and floods.

Kyaw Minn, from Palaung village, said, “I will not grow monsoon paddy this year, but will cultivate other seasonal crops when the water level drops after the rainy season.”

Farmers in the delta generally grow two rice crops, one in the rainy season and one in the cooler season in lower-lying areas that are fed with receding flood waters. They might also grow a third, short-cycle crop, such as beans, in the hot months before the monsoon.

Thein Aung, chairman of the Independent Farmers League in Ayeyawady Region, said that because of rising concerns among farmers vast areas of land will go uncultivated this year.

“The farmers from our villages will not be growing paddy in a total of 200,000 acres situated on the low lands,” he said, before adding that the impact on overall paddy production would probably be limited as these fields are some of the least-productive tracts.

The Ayeyarwady Delta is home to many millions of subsistence farmers whose income and food security relies on their annual harvest, and to a lesser extent fishing.

The drop in rice production follows the devastating impact of Cyclone Komen, which ravaged the farm sector with heavy flooding in 12 out of 14 states and regions from June to August last year.

Some 260,000 acres of monsoon paddy fields were flooded and 52,000 acres damaged, according to official figures, which showed that the cyclone killed 120 people and affected more than 400,000 households.

Sein Win Hlaing, chairman of the Paddy and Rice Producers Association, said, “Rice production declined by 20 percent last year due to the weather’s impact.” He added that the fall in rice production would hamper Myanmar’s export, which stood at around 1.5 million metric tons of rice before 2015.

Cyclones and other extreme weather are set to increase further and this trend should ring alarm bells with the agriculture sector and the new National League for Democracy government, said Tun Lwin, an independent meteorological expert and former government official.

“Traditional agricultural methods are no longer suitable for the changing weather conditions,” he warned, adding that the monsoon would be shorter and produce more volatile weather.

Ba Hein, the Minister for Agriculture, Livestock, Natural Resources for Ayeyawady Region, said development of the agriculture sector and of the water management infrastructure was ignored by previous, military-led governments.

“The delta has many rivers and streams, and these have not been properly managed,” he said, adding, however, that the state government had limited funds to improve water management infrastructure and that it was unlikely that the central government would provide more resources soon.

His administration, Ba Hein said, would focus on helping farmers find solutions to the changing weather conditions and boost overall agricultural development by, for example, launching new contract farming systems in cooperation with the Myanmar Rice Producers Association.

Thike Soe, an officer of the Agricultural Department in Maubin Township, said his department was trying to educate farmers about the changing weather patterns and the need to use different rice varieties in order to adapt to the changes.

“There will be a shortage of water supply for cultivation and crop yields may decline. So, they should grow rice seeds that can be harvested in a shorter period,” he said, adding that such varieties were available to farmers on local markets.

Soe Tun, chairman of the Myanmar Rice Association, echoed this idea but stressed water management should be improved in order to harness available water resources in times of drought.

“Myanmar has some alternative sources of water supply, including four major rivers. If the water from these rivers can be used efficiently, the country’s agricultural sector is sure to resurge,” he said.

Indonesian envoy for business collaboration with Pakistan

Indonesian Ambassador Iwan Suyudhie Amri has said that Pakistani businessmen should take advantage from the large Indonesian market.

He was talking to the Lahore Chamber of Commerce and Industry (LCCI) Vice President Nasir Saeed at the LCCI on Saturday.

The ambassador said that bilateral trade should be enhanced to the maximum, as Pakistan and Indonesia are potential markets. He said that Pakistani rice and meat have great demand in Indonesia therefore, Pakistani businessmen should avail this opportunity.

He said that the Lahore Chamber of Commerce and Industry is playing a significant role to strengthen the trade and economic relations between the two countries.

LCCI Vice President Nasir Saeed on the occasion said that the implementation of Pakistan-Indonesia Preferential Trade Agreement (PTA) would help begin a new era of cooperation and serve as a foundation for enhanced economic and trade cooperation. The Pakistani businesses would increase exports to Southeast Asia’s largest economy under the preferential trade agreement, he added.

He said that the bilateral trade figures fairly indicate the economic relations between two countries. However, he added, the gap of trade deficit is further widening, which needs to be shortened by way of allowing Pakistan to export more items to Indonesia.

The LCCI vice president said that there is also a lot of scope for Indonesia to make investment in Pakistan. “Indonesia has a fairly advanced petro-chemical, rubber, plywood, telecommunication and tourism industry. Indonesia can make direct investment in these industries and can also enter into joint ventures with Pakistani counterparts,” he added.

Uganda’s expenditure on transportation of rice imports high

Uganda spends about $105m (Shs367b) every month in transport costs to import rice from Pakistan.

While signing off a farming partnership between rice farmers in the country and Kingdom Rice – a new rice milling factory – on Tuesday in Namanve Industrial Park, outgoing State minister for Investment Gabriel Ajedra said Uganda has no reason to continue being ranked among poor countries of the world because the money Uganda loses to purchase and transport food like rice that can be locally grown here, explains the amount of money we waste as a country.

“Last week at the World Economic Forum, it was noted that in 2020, there is going to be a global food crisis and interestingly, Uganda was mentioned among the six countries in the world which can avert it if only they fixed their agricultural systems,” he said.

Cost of transport

Explaining the Shs367b bill, Uganda Revenue Authority (URA) commissioner customs field services Stephen Magera, who attended the meeting said every month, URA receives 300,000 metric tonnes of rice imported from Pakistan and another 25,000 metric tonnes from Tanzania yet the cost of transporting a metric tonne of rice together with other logistical arrangement is $350 (Shs1.2m) without the actual cost of the rice.

On the same day, Uganda Development Bank and Kingdom Rice signed a Memorandum of Understanding in which the bank is going to capitalise the rice company to help it raise rice production in the country.

Rice exporters demand inclusion in tax-free sectors

Rice exporters have demanded the government to elevate the market to industry level and include it in group of the five sectors for which taxes are waived off, reported Thursday.

According to the association, rice export amounts to USD 2 billion in a year and it could increase twofold if the government ends taxation and pay the pending funds under export refund.

Administrator of the association, Rahim Jano said that traders face many issues despite the fact that after textile, rice export is the biggest of all products in the country.

Rice sector should be declared zero-rated: REAP

Pakistan’s second largest exports sector – rice needs to have zero-rated regime instead of payment and refund cycle. Rice Exporters Association of Pakistan (REAP) Chief Patron Abdul Rahim Janoo, REAP Chairman Ch Muhammad Shafique and Senior Vice Chairman Noman Ahmed Shaikh said this while assuring full cooperation to the alliance of five zero-rated export sectors in this regard.

Furthermore, REAP has approached Prime Minister Nawaz Sharif to declare rice exports as industry and to put it on zero-rated regime along with five export sectors. Apart from textile, they said rice exports are much ahead of other four sectors, adding that negligence of rice sector would discourage rice exports and we would lose our established markets. If government’s intentions are good, then “No payment, No refunds” policy should be adopted as it would curb corruption and release many staff members of FBR to do other productive work, they said. If government wants to increase exports then why should penalize export sector to pay first and then get refunds? They asked. The working capital of exporters gets blocked and refunds are pending since many years while people have to borrow loans to run their units or shut down, they added.

Abdul Rahim Janoo said all other taxes/cess on all export items should be merged in one tax and should be collected through banks at the time of negotiating documents or on receipt of payments. He urged the government to exempt exporters from sales tax on packing material, local supply and their electric bills. “It will give peace of mind to exporters and exports as well as the government revenue will increase,” he said. “We are hopeful that if all these demands are met on war footing, REAP assures to increase rice exports to $4 billion by the end of 2018.”