Monthly Archives: June 2016

Rice stocks enough for lean months

Philippines (Philippines News Agency) — The National Food Authority (NFA) has assured the public that there is enough supply of rice for the lean months.

“We have more than enough stocks of the good quality, low-priced NFA rice for the lean months,” said NFA officer-in-charge Tomas Escarez.

Escarez said that as of June 15, the agency has more than the 30-day buffer stock needed at the start of the lean months (July-September), with current inventories enough to last for 32 days.

“These stocks are now strategically prepositioned across the country, especially in calamity-vulnerable areas,” he said.

Despite that, Escarez said he has directed field offices to accredit more rice outlets for NFA rice so that supply will be more accessible to all low-income residents anywhere in the country.

“Closer price monitoring and the opening of more rice outlets will ensure that our people will always have access to NFA rice,” he said.

The country’s national rice inventory currently stands at 3.54 metric tons (MT), good to last for 110 days based on national daily requirement of 32,560 MT. Of this volume, some 1.02 million MT is with the NFA, 1.04 million MT is commercial rice, and 1.47 million MT is household stocks.

ASIA RICE-VIETNAM PRICES DROP ON SOUTHERN HARVEST; THAILAND HOLD STABLE

Rice export prices held stable in Thailand before a state stock auction in July, while rising supplies from a harvest in southern Vietnam have weakened prices slightly, traders said on Wednesday.

Buyers in Thailand, the world’s second-biggest rice exporter after India, held back purchases, creating thin demand, before the government auction expected next month, traders in Bangkok said. The date of the auction is not yet known.

In the last auction of state stockpiles held on June 15, the Thai government sold 1.11 million tonnes worth 11.54 billion baht ($327 million).

Thailand’s 5 percent broken rice stood unchanged in the past week at $415-$438 a tonne, FOB Bangkok.

Thai rice prices are expected to ease soon as the U.S. dollar has appreciated after the United Kingdom’s vote to leave the European Union last week, resulting in a slightly weaker Thai baht.

“This is likely to lower our dollar prices, making our rice prices more competitive with Vietnam,” a trader said.

Thailand has exported 4.7 million tonnes of rice in the first six months of 2016, up 11.42 percent from a year ago, Thailand’s commerce minister said June 23.

In Vietnam, export prices of lower-quality 25 percent broken rice eased on rising supplies because of an accelerating harvest, while buying demand has yet to pick up, traders said.

The variety weakened to $335-$340 a tonne, FOB basis, using fresh summer-autumn grain, from $340-$345 last Wednesday, while the 5-percent broken rice stood unchanged at $370-$380 a tonne.

China, Vietnam’s top rice importer, is not active, while Vietnamese jasmine rice has sold well to Ghana, traders said.

Ghana has passed the Philippines to emerge as Vietnam’s third-biggest rice buyer after China and Indonesia during the first five months of 2016, importing 203,000 tonnes during that time, up 49.2 percent from a year ago, Vietnam’s farm ministry said.

Vietnam’s first-half rice exports fell 6.8 percent from a year earlier to 2.78 million tonnes, based on government statistics released on Tuesday.

A smaller winter-spring crop, Vietnam’s biggest rice harvest period, has curbed the agricultural sector’s growth, slowing Vietnam’s economic expansion.

The crop paddy output fell 6.4 percent from last year to 19.4 million tonnes due to drought and salination, Nguyen Bich Lam, head of the statistics office, said in a report on Tuesday.

Supply from India, Thailand and Vietnam, the world’s biggest exporters, accounts for a combined 66 percent of global rice trade.

New restrictions aim to curb rice imports

The Ministry of Economy and Finance announced on Monday that the government will block all illegal rice imports at its borders and limit legal rice shipments from Vietnam based on production cost.

As part of the new regime, only milled rice with a production cost of $300 to $600 per tonne can legally be imported from Vietnam. The goal, according to the ministry, is to eliminate cheap Vietnamese rice that sells for $200 or less per tonne from the Cambodian market.

The ministry also requires identifying features, such as the name of the rice producer, rice variety and any trademarks, to be visible on imported packages in order to assess its true cost.

Moul Sarith, secretary-general of the Cambodian Rice Federation (CRF), the industry body representing the Kingdom’s rice millers and exporters, said the new policy would help Cambodia’s struggling rice sector survive amid an onslaught of cheap Vietnamese milled rice.

“This mechanism will control the flood of rice imports from Vietnam as well as rice smuggling,” he said yesterday. “It will also control the quality rice in the market.”

According to Sarith, Vietnamese rice produced for $200 to $300 per tonne was cheaper than locally milled rice, even with a 17 per cent import and VAT tax assessed.

He also said the government will exempt rice producers from paying a 15 per cent tax on day-worker salaries, as well as give a $20 million to $30 million loan to the CRF to help keep the local industry afloat, provided the organisation can produce a transparent spending budget.

In March, the CRF called on the government to take urgent measures aimed at addressing two key challenges to the domestic industry: millers’ insufficient access to capital and the flood of illegal rice imports from neighbouring countries.

The request followed a separate initiative by the Cambodian Rice Industry Survival Implementation Strategy (CRISIS) group, which provided a nine-point action plan to address what it described as an industry on the brink of collapse.

The government agreed to strengthen entry points along Cambodia’s borders to block illegal rice imports on March 30.

According to Kann Kunthy, CEO of Battambang Rice investment Co Ltd, the government has always claimed to support the rice sector, yet in reality provides little assistance.

“We need the government to take better action instead of talk a lot,” he said. “The government should take action on rice smuggling as it is much more prevalent than legal rice imports.”

Govt Approves Rice Loans

The government has come to the rescue of rice millers and exporters, currently in the throes of a serious financial crisis, with loans of between $20 and $30 million to the Cambodia Rice Federation (CRF). This is to help the sector purchase rice from farmers after the harvest this November, to store in warehouses and process them for export, said the CRF.

Hun Lak, CRF vice president, told Khmer Times yesterday that he and key rice millers and exporters had met with economy and finance minister Aun Pornmonirath on Monday.

In the meeting, Mr. Hun Lak said, important issues like an emergency budget to revive the rice sector following the severe drought that affected production, the flow of low-grade rice into the country from Vietnam, and high taxes imposed on rice millers were discussed.

“The government agreed to make out the loans of between $20 and $30 million to CRF, with the foundation acting as a guarantor. The CRF in turn will screen all applicants and hand out the money to deserving rice millers and exporters,” he said.

Mr. Hun Lak said the government would charge an interest rate of about seven to eight percent for the loans. “These loans would enable rice millers and exporters to purchase rice from farmers to store in their warehouses and later process them for export.”

Mr. Hun Lak said the CRF had already formed a working group with representatives from the Ministry of Economy and Finance and the Rural Development Bank to process all the loan applications.

“We hope to complete all the formalities immediately after CRF’s annual general meeting on July 2,” he said.

“All CRF members have to submit their loan request forms if they want to apply for the grants. There will be a formula for vetting the applicants to ensure that the loans would be put to good use to revive their businesses,” added Mr. Lak.

In March, rice millers and exporters wrote to the government urging intervention due to stiff competition in export markets as well as domestic ones. In the letter, they said they were facing a cash crunch due to a flood of low-grade rice from Vietnam while stressing that bankruptcy was widespread among farmers, millers and exporters alike.

The letter said Vietnamese companies were snapping up high-quality Cambodian paddy for export from Vietnam and flooding the Cambodian market with low-grade rice. This, the letter said, was driving domestic millers out of the market.

To make matters worse, many millers, exporters and farmers are in financial doldrums due to the severe drought early this year that saw rice production fall drastically.

Economy and Finance Minister Aun Pornmoniroth, stressed that Cambodia would not totally stop importing rice from neighboring countries. However, he said the government plans to reduce the export duty of milled rice.

Pakistan holds opportunity to gain access to halal food market in China

Pakistan, the second largest exporter of rice to China, has every opportunity to grab a sizable share of the halal food market as well as meet the demand for fruits, primarily mangoes, through better competitiveness in terms of quality and price, said Ministry of Agriculture Director for Asia and African Affairs Ye Anping .

Talking to a group of journalists from South Asia, who were on a visit to China, he said Pakistan and China should enter into livestock and agriculture quarantine agreements to clear the way for export of meat and agricultural products to Beijing.

In reply to a question, he said the balance of trade in agricultural products was in favour of Pakistan as in 2015 China imported agri-products, of which rice constituted 85%, worth $430 million from Pakistan and exported fruits and vegetables valuing $320 million.

“China does not want to reduce its trade deficit because it wants to expand agricultural trade to meet its domestic demand,” he said, reiterating that tremendous scope existed for Pakistan and other South Asian nations to capitalise on the opportunity.

Ye emphasised that countries keen to enhance exports of agricultural products to China needed to understand the demand from Chinese markets and also ought to be extremely competitive.

He also invited the countries interested in gaining access to the halal market of China to attend the China-Arab States Expo that was held in Ningxia Hui autonomous region every two years in September.

He acknowledged that the cost of Chinese agricultural products was comparatively high and Beijing, because of the constant shrinking of its cultivable land, had turned into the largest importer of agricultural goods in the world since 2012.

Millers oppose misuse of basmati tag in Rajasthan

Seeking a ban on the illegal use of ‘basmati’ by rice millers of Rajasthan and Madhya Pradesh, the Punjab Basmati Rice Millers’ Association has lodged a complaint to the Assistant Registrar of Trademarks and Geographical Indication Registry, Chennai.
They have further appealed the authorities concerned to investigate and verify the records of exporters who buy this rice.
The affected rice millers of the state had last month complained to the Agricultural and Processed Food Products Export Development Authority (APEDA) saying that the Intellectual Property Appellate Board (IPAB) had not given the geographical indication (GI) tag to basmati in these states.
The APEDA had, however, asked the millers to pursue their case with the Trademarks and Geographical Indication Registry.
Notably, the rice millers here are in a fix over falling prices of basmati and have suffered huge losses in the past.
Ashish Kathuria, general secretary of the association, said, “The IPAB has given the GI tag to basmati in Punjab, Haryana, Himachal Pradesh, western UP, Uttarakhand and two districts of J and Kashmir. MP and Rajasthan do not have the GI recognition for basmati.
Nevertheless, rice millers in these states are using GI of basmati on their bills, letter heads, websites, advertisements, web advertisements and SH code in the international market,” he added.
“Almost every merchant and retailer is selling the products of rice manufactured by the millers of Rajasthan and MP mentioning the basmati GI tag. This is clear case of infringement of registered GI,” he pointed out.
The association has even attached a list of some rice millers, sellers and exporters who are allegedly violating the norms. “With this illegal use of the GI tag, the millers and farmers of Punjab and Haryana have suffered an estimated loss of Rs 2,500 crore which should be levied on these culprits,” he said.
Geographical Indication tag
The geographical indication (GI) is a sign that identifies a product as originating from a particular place which gives that product a special quality or reputation or other characteristic, like Darjeeling (tea).

VIETNAM’S 2016 RICE EXPORTS SEEN DOWN 13 PCT Y/Y

Vietnam’s rice exports in 2016 could fall 13.2 percent from a year earlier to 5.7 million tonnes as supply was dampened by drought and salination, a government news website reported on Friday.

Rice exports in January-June by Vietnam, the world’s third-biggest exporter of the grain after India and Thailand, is seen down 8.4 percent annually at 2.73 million tonnes, the website quoted the Vietnam Food Association (VFA) as saying.

The annual estimate is lower than the association’s earlier forecast of 6.5 million tonnes as Vietnam suffers from its worst drought in 90 years that dragged the country’s economic growth last quarter to the lowest in two years.

A farm ministry official urged farmers to boost production to make up for supply losses in the previous crop, while future demand from key markets like China, Philippines and Indonesia is seen solid, the report said.

Vietnam exported 2.3 tonnes of rice in the first six months of 2016, almost the same as the corresponding period a year ago, government data showed.

Pakistan has failed when it comes to trade with China

Pakistan has been unable to fully tap and utilise the concessions granted by China under the China-Pakistan Free Trade Agreement (CPFTA) and only used 3.3% of the total tariff lines, said a review of the first phase of CPFTA.

According to official sources, the Ministry of Commerce is reviewing the first phase of the CPFTA, which revealed that Pakistan could only export in 253 tariff lines out of the total 7550, where average export value was $500.

Pak-China trade pact in favour of Beijing: Sartaj Aziz

“Pakistan mainly exported raw materials and intermediate products such as cotton yarn, woven fabric and grey fabric while value-added products were completely missing,” they said. “This is why Pakistan has not benefitted from the CPFTA. Some of the value-added products like garments are included in the concessionary regime.”

The officials said that Pakistan shared its concern regarding the insufficient utilisation of concession and competition faced by the local industries due to cheap imports from China. They said it was agreed that the tariff reduction modalities of the second phase would be designed in a way to accommodate all the genuine concerns of both countries adequately.

Pakistan and China are already negotiating for the second phase of Pak-China FTA since 2011, however, Minister for Commerce Khurram Dastgir recently said that the negotiations had been halted as Pakistani businessmen were protectionists and Chinese wanted more liberalisation.

The CPFTA on trade in goods was signed on November 24 2006 and implemented on July 7, 2007. The FTA on trade in services was signed on February 21, 2009 and in operational since October 10, 2009.

Under the Trade and Service Agreement, Pakistan will open the first banking channel of Habib Bank Limited in China by the end of this year and the Chinese authorities have already given the approval by relaxing the reserve limit from $20 billion to $15 billion.

Is Pakistan really a dream destination for China?

Bilateral trade volume, which amounted to $4 billion in 2006-7, reached an all-time at $12 billion in 2014-15. Pakistan’s exports jumped to $2.1 billion in 2014-15 from $575 million in 2006-07. Correspondingly, China’s exports to Pakistan increased to $10.1 billion in 2014-15 from $3.5 billion in 2006-07.

Pakistan’s major exports to China are cotton yarn/fabric, rice, raw hides and skins, crude vegetable material, chemical material, fish and fish preparations and crude mineral. Major imports from China are machinery (all sorts) and its parts, fertiliser manufactured, chemical element, yarn and thread of synthetic fibre, iron and steels, chemical material and product, vegetable and synthetic textile fibre, road vehicles and their parts, non-ferrous metals, tyres and tubes of rubber.

Exports to China, UAE decline

Pakistan’s exports to China and United Arab Emirates (UAE) have declined by 13.71 percent and 24.5 percent in the financial year-2015-16, respectively. According to sources, China has abandoned its policy to store raw cotton and yarn that comprises major portion of Pakistan export basket. China’s policy shift has also affected international price of yarn.

Pakistan’s exports to UAE have declined due to decrease in the exports of petroleum products, chemicals, jewellery and rice. South Africa has imposed anti-dumping duty on Pakistani cement companies, whereas, the demand from Afghanistan for cement has shifted to Tajikistan. Generalised Scheme of Preferences (GSP)-plus Pakistani products have duty free access in 28 member states of European Union (EU) since 1st January, 2014. As a result of these concessions Pakistani exports to EU grew by 22 percent in 2014. In 2015 also Pakistani export to EU grew by 11 percent in Euro terms. However exports to Britain after Brexit may dampen exports.

The sources said Pakistan’s export market lacked diversification and was concentrated only in a few regions and countries with 51 percent of exports confined to six countries/ regions like EU, US, UK, China, Afghanistan and Middle East. Pakistan has not been able to tap its export potential in the regional market and was facing tariff and non-tariff barriers in markets like Iran and India, they said.

Investment in exporting sectors has remained disturbingly low, as a cut-throat competition with emerging players like Bangladesh and Vietnam have made margins in the exporting business fairly unattractive. Sources said that rice being the second largest export item of Pakistan was given priority in the Strategic Trade Policy Framework 2015-18. To promote and develop rice exports, a Rice Development Council is being established. Basmati rice has been selected as one of the focus products for short term turn around in exports.

The sources said that Ministry of Commerce had recently signed Memorandum of Understanding with Indonesia for export of one million tons of rice over the next four years. Trade Development Authority of Pakistan (TDAP) organises participation of Pakistani rice exporters in all the leading international food fairs and organises trade delegations to the export markets. Federal government has also contacted Chinese Government for enhancing export of rice and an exercise is under way to identify/register rice processing plants for export of rice to China. A gift of rice (15,000 MT) was being sent to Cuba, sources further revealed, and added that that was more than a gift to the Cuban people. “It was a marketing effort which will expose the Cuban consumer to our rice and be our first step in the Cuban domestic rice market,” it added. According to documents, provincial governments are providing transport rebate of $90 per ton to the private sector for enhancing export of surplus wheat stocks of Provincial Food Departments of Punjab and Sindh.

The Ministry of Commerce has forecast rice exports to rise during the second half of this year

The Ministry of Commerce has forecast rice exports to rise during the second half of this year, reaching its annual output target of 9.5 million tons.

Commerce Minister Apiradi Tantraporn said the expected increase is due to continuous demand in both domestic and foreign markets, such as the government-to-government deal with China for one million tons of rice, which commences in August. Other notable rice importers, such as the Philippines and Indonesia, will be seeking additional G2G rice procurement.

Meanwhile, India, one of Thailand’s main competitors globally, is currently suffering from drought. The country has shifted to storing rice for domestic consumption, compromising its export capabilities.

Due to these factors, the Ministry of Commerce has concluded that Thailand will be able to achieve its annual output target of 9.5 million tons.

In the first half of 2016, Thailand exported 4.71 million tons of rice worth 1.55 billion dollars or 73.90 billion baht. The amount marks an 11.42% increase in rice exports and a 7.81% increase in export value, compared to the same period last year.

Thailand’s major export markets consist of Africa, Asia, the Americas and Europe.