Monthly Archives: December 2016

India to nudge Iran to resume Basmati imports

NEW DELHI: India is readying to send a delegation to Iran to protect its big basmati rice market in the face of an aggressive campaign by Pakistan to paint the Indian variety as inferior.

The delegation comprising government officials and exporters will travel to Iran on January 27-29, Mohinder Pal Jindal, president of All India Rice Exporters Association, told ET. He said the industry is hopeful that Iran will lift the ban on imports of basmati rice from India that has been in place for the past four months.

“We have to counter other countries’ efforts because our share in Iran’s imports has fallen drastically,” said a government official, who did not wish to be identified.

Iran has been one of the largest importers of Indian basmati rice in recent years. But in 2015-16, however, basmati rice exports from India to Iran almost halved to $571 million from $1.1 billion in the previous financial year.

In the first half of this fiscal, basmati rice exports from India to Iran amounted to $356 million.

Both India and Pakistan have claimed geographical indication on aromatic long grained basmati rice, saying the variety is unique to the respective countries. Uruguay is another rice exporter to the West Asian country.

Iran has seen a spurt in trading ties with a large number of countries since January last year, when it was freed of economic sanctions imposed by the West for its nuclear programme. “We need to promote exports of basmati rice in Iran especially because other countries are aggressively promoting their varieties of rice,” said another official.

India is keen to quell any concerns over quality of its basmati rice even as Iran has strict preshipment quality checks for all imports.

“We need to dispel rumours about basmati rice which are being made by parties with vested interests,” said Rajen Sundaresan, executive director, All India Rice Exporters Association. “Iran is a stable but important market for us. They have not opened the permits for imports till now even though this should have happened in November.”

Iran has a permit system of imports. However, no major consignments have been shipped from India in the past six months. India is the leading exporter of basmati rice, having shipped 4.05 million tonnes of the aromatic long grain basmati rice worth Rs 22,718.44 crore in 2015-16.

The industry pegs exports to Iran at 1 million tonnes. Satish Goel, managing director of Shree Jagdamba Agrico Exports, which exports 50,000 tonnes of basmati rice to Iran annually, said that the country needs to dispel rumours that Indian rice is plastic. “Our image is being hampered and we need to put things in order,” he said.

Government raises import duties on consumable, luxury goods

The Federal Government has raised duties on luxury goods such as yachts and Sport Utility Vehicles (SUVs) imported into the country.But also affected are some food items such as rice, salt and sugarcane that have local alternatives.

The plan to raise the duties which was first contemplated by former Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo- Iweala under the immediate past administration of Dr. Goodluck Jonathan had remained on the drawing board due to Jonathan’s loss of the presidential election to the incumbent President Muhammadu Buhari and the consequent change of officials between the former administration and the current one.

Under the new Economic Community of West Africa (ECOWAS) Common External Tariff (CET) regime which administers import and export tariffs within the West African sub-region in the movement of goods, importers of yachts and other luxury automobiles such as SUVs, boats, sports cars, and other vessels used for pleasure are now to pay 70 per cent of the value of the vehicles as taxes (duties) to the Nigeria Customs Service (NCS). The new rate is a jump from the 20 per cent which the owners currently enjoy. The increase is contained in a circular by the Minister of Finance, Mrs. Kemi Adeosun to the NCS.

Other major items affected in the duty increase include sugar cane and salt from 10 per cent to 70 per cent; alcoholic spirit, beverages and tobacco from 20 per cent to 60 per cent; and rice from 10 per cent to 60 per cent.

Also included on the list are packaged cement, from 10 per cent to 50 per cent; cotton/ fabrics materials, from 35 per cent to 45 per cent; and used cars popular known as Tokunbo, from 10 per cent to 35 per cent respectively.

Medicaments such as anti-malarials and antibiotics; crude palm oil; wheat flour; tomatoes paste; and cassava products are also affected in the upward review of duties. But essential industrial sector accessories, including bolt, industrial oil and other equipment are to enjoy a downward review to spur local industrialisation.

The cut in the import tariff on items for industrial use may encourage entrepreneurs whose industries are shut down due to the high duties paid on imported components. Such companies may resume or expand their operations as a result of the incentives.

However, while the new policy may trigger a rise in the prices of some consumable goods until the demand for them is met locally, the NCS, which has been grappling with meeting the fiscal target set for it by the Federal Government may boost its revenue.

The policy which is coming on the heels of the recent ban by the NCS on all vehicle imports through the land borders in the country, as part of measures to curb smuggling of particularly used cars into the country is going to see citizens pay higher for used cars popularly known as ‘Tokunbo.”

The smuggling of cars into the country may have dealt a very big blow to the customs’ revenue generation as the budget minister recently announced that the NCS’ projected revenue for the third quarter of this year fell short of expectation by N100 billion, recording N200 billion instead of N300 billion target given to the agency by the Federal Government.

According to the Finance Minister, Buhari has already approved the new tariff regime.The circular reads in part: “This is to confirm that Mr. President has approved the 2016 fiscal policy measures made up of the Supplementary Protection Measures (SPM) for implementation together with the ECOWAS CET 2015 – 2019 with effect from 17th October, 2016.

“Consequently, all transactions prior to the effective date of this circular shall be subjected to the tariff rates applicable before the coming into effect of this 2016 fiscal policy measures.”
It added that the approved SPM was in line with the provision of the ECOWAS CET comprising the following:“An Import Adjustment Tax (IAT) list with additional taxes on 173 tariff lines of the extant ECOWAS CET; national list consisting of items with reduced import duty rates to promote and encourage development in critical sectors of the economy; an import prohibition list (Trade), applicable only to certain goods originating from non-ECOWAS member states.”

Adeosun declared that the current fiscal policy measures superseded those of 2015, and advised the customs and other stakeholders to ensure strict compliance.

U.S. Organic Rice Market – Analysis and Forecast to 2020

This report has been designed to provide a detailed analysis of the U.S. organic rice market. It covers the most recent data sets of quantitative medium-term projections, as well as developments in production, trade, consumption and prices.

U.S. imports of organic rice amounted to 24,444 thousand USD in 2015, which is nearly equivalent to their value in 2011. Over the period under review, imports showed mild fluctuations, rising in 2012 and 2013, and falling by 20% in 2014.

According to IndexBox estimates, Thailand remained the dominant foreign supplier of organic rice to the U.S. In 2015, Thailand’s organic rice imports totaled 10,966 thousand USD, which accounted for a 45% share in terms of U.S. imports. India, Argentina, China, and Italy were the other key suppliers of organic rice in 2015, with a 52% combined share of total organic imports.

China (+125.5% per year) and Argentina (+83.5% per year) were the fastest growing exporters of organic rice to the U.S. from 2011 to 2015. India significantly strengthened its position in terms of U.S. organic rice imports, growing its share from 22% in 2011 to 39% in 2015.

Import prices for organic rice grew by a modest 0.8% annually from 2011 to 2015. The highest annual rates were recorded in Argentina (9.2%), followed by China (2.6%).

The average import price for organic rice was 1.21 USD per kg in 2015. Import prices varied considerably by country of origin. Italy (2.38 USD/kg) was a high priced country of origin, while Thailand (1.14 USD/kg) and Argentina (0.94 USD/kg) were among the lowest.

Rice dull amid year-end holidays

RCE DULL

Rice markets in the world’s biggest exporters of the grain saw barely any deals amid Christmas and New Year holidays, traders said on Wednesday.
Prices in Vietnam, the world’s third-biggest rice exporter, were little changed from last week, with Vietnam quoting 5-percent broken rice RI-VNBKN5-P1 at $335-$345 a tonne, FOB basis, compared with $335-$350 a week earlier.
“Market is just quiet during this Christmas and New Year holiday; there’s only a few traders selling domestically as they have some stockpile left, but no exports,” said a Ho Chi Minh City-based trader.
“There’s some private contracts with the Philippines about to be shipped and there’s barely any order from China,” said another trader in Vietnam.
Vietnam is estimated to ship 4.88 million tonnes of rice in 2016, down 25.8 percent from a year earlier, the agriculture ministry has said.
Thailand is also expected to have no new rice order until after the New Year holiday.
“It’s quiet… prices are the same in Thai baht, but the depreciation of Thai baht made them look less in dollar terms,” said a Bangkok-based trader.
The trader quoted the benchmark 5-percent broken rice RI-THBKN5-P1 at $355-$360 a tonne on Wednesday, compared to $360 a week ago.

‘Plastic’ or not? Over 100 bags of fake rice seized in Nigeria

nigeria-fake-rice-exlarge-169

Nigerian authorities have seized 2.5 metric tons of reportedly fake rice during the holiday season.

On Tuesday, the Nigerian Custom Service said it intercepted 102 bags of a brand called Best Tomato Rice after the recipient of a gift of rice alerted authorities. The health ministry released a statement on Friday urging Nigerians to remain calm after preliminary findings found no evidence that the rice was plastic or consisted of toxic chemical substances. Yet, the country’s National Agency for Food Drug Administration Control has not released their investigative report.
The health minister’s statement contradicts earlier reports from customs officials.
Mamudu Haruna, comptroller of the Federal Operations Unit, called it “plastic” rice at a press briefing in Lagos Thursday. “We have done the preliminary analysis on the plastic rice. After boiling, it was sticky and only God knows what would have happened if people consumed it.”
Haruna described the importers of the fake rice as “economy saboteurs” seeking to capitalize off of Nigerians looking for bargains during the Christmas and New Year holiday season.
It is unclear where the shipment of rice originated. “A consultant said he was given 221 bags to distribute,” Jerry Attah, the public relations officer for the assistant superintendent of customs, told CNN.
One customer who avoided a potential mishap was Kikelomo Adediti. She said she bought 10 cups of the product (about 2 kg) from a small retailer in the Ikeja area of Lagos, in November.
“It looked perfectly normal and cost less [than regular rice] so I thought I got a great deal. Normally it would take about 20 minutes [to cook] but after 30 minutes it was still hard. I added more water and the aroma was chemical in nature so I decided to discard it thinking it had expired,” she told CNN. Adediti didn’t formally report the incident.
In another case, a woman who received rice as a gift noticed something was wrong after cooking it. Her husband then called customs officials.
Plastic, resin or none of the above
Yet, it’s still unclear what the rice is made of.
“If you look at it it’s rice. If you look at the pictures it’s rice. If you cook it and eat it it’s rice. It’s only when you touch it you’ll feel it that you realize it’s not,” Attah told CNN.
“That’s why I call it fake rice, not plastic rice. To me it’s more like flour coated in maybe rubber… I don’t know the kind of formulations or chemicals they use,” he said.
Attah said that a total of 221 bags — each weighing 25 kilos — came into Nigeria, but only 102 were recovered, which means 119 have already been distributed.
Nigerians’ love for rice
Rice is a major staple food in Nigeria and a favorite holiday meal, often prepared as jollof rice.
It is estimated that Nigerians consume 6 million metric tons of rice per year; in 2013, former minister of agriculture, Dr. Akinwumi Adesina, said the country spends more than $1 billion annually to import rice.

“Though rice contribute a significant proportion of the food requirements of the [Nigerian] population, production capacity is far below the national requirements. In order to meet the increasing demand, Nigeria has had to resort to importation of milled rice to bridge the gap between domestic demand and supply,” according to Professor Tunji Akande, author of An overview of the Nigerian Rice Economy.
Forex woes
With imports adversely affected by the country’s foreign exchange woes and the continued rise of the dollar against Nigeria’s currency the Naira, the cost of rice has more than doubled.
Bags of rice were on sale for NGN22,000 in Bodija market Ibadan and other major Nigerian markets on Thursday, compared with about NGN10,000 a year ago.
The desire for cheaper rice makes Nigerians vulnerable to counterfeit foods industry: “Rice is very expensive and people are looking for where to get it at cheaper rates. If a regular bag costs NGN17,000 but the plastic one is being sold for 9,000, many Nigerian families will buy it,” said economics expert Lanre Adigun.
“This is further aided by the porous nature of Nigeria’s borders. Since the Nigerian government had already banned rice importation into the country through the land borders, the commodity is still being smuggled into the country through the border with Benin Republic. You can go to any market and you will see all sorts of rice imported through the land borders,” said Feyikemi Oladokun, a nutrition expert who works with the agriculture ministry in Kwara state.
Not just Nigeria
In 2011, a Korean news report revealed some fake rice is produced from potatoes that are shaped as rice with the addition of industrial resin. Even when cooked, the report said the rice remained hard.
Dr. Victoria Feyikemi of Babcock University Hospital Ogun state, Nigeria, said the medical consequences of consuming such products can be severe because the fake rice has synthetic resin that is harmful to the body.
“When you eat three bowls of this rice, you are basically ingesting one vinyl bag and the toxicity and associated pathologies are numerous. We cannot afford to add plastic rice-associated medical emergencies to our numerous health challenges in Nigeria, remember we are still struggling with Lassa

Asia Rice-Thailand, Vietnam dull amid year-end holidays

Dec 28 Rice markets in the world’s biggest exporters of the grain saw barely any deals amid Christmas and New Year holidays, traders said on Wednesday.

Prices in Vietnam, the world’s third-biggest rice exporter, were little changed from last week, with Vietnam quoting 5-percent broken rice RI-VNBKN5-P1 at $335-$345 a tonne, FOB basis, compared with $335-$350 a week earlier.

“Market is just quiet during this Christmas and New Year holiday; there’s only a few traders selling domestically as they have some stockpile left, but no exports,” said a Ho Chi Minh City-based trader.

“There’s some private contracts with the Philippines about to be shipped and there’s barely any order from China,” said another trader in Vietnam.

Vietnam is estimated to ship 4.88 million tonnes of rice in 2016, down 25.8 percent from a year earlier, the agriculture ministry has said.

Thailand is also expected to have no new rice order until after the New Year holiday.

“It’s quiet… prices are the same in Thai baht, but the depreciation of Thai baht made them look less in dollar terms,” said a Bangkok-based trader.

The trader quoted the benchmark 5-percent broken rice RI-THBKN5-P1 at $355-$360 a tonne on Wednesday, compared to $360 a week ago.

DA wants QR on rice extended by 2 years

DA wants QR on rice extended by 2 years

The Department of Agriculture insists that quantitative restrictions on rice should be extended by two more years instead of being allowed to lapse beginning July 2017.

According to Secretary Manny Piñol, the recent national consultations showed farmers would like a two-year extension, which DA is supporting.

“This is the position of DA right now. We’d like to ask for a two-year extension. We believe within the next two years we can support farmers and make them competitive with other rice producers,” Piñol said.

The agriculture secretary said higher tariffs on beyond-quota rice imports should remain, as local farmers still cannot compete on the global stage.

The average cost of producing unmilled rice in the country is currently 12 pesos per kilo, or double the 6 pesos per kilo in Vietnam.

In a statement, the DA said that “with many Filipino farmers flocking to the urban areas to find other means of livelihood and those who are unable to compete with cheaper imported rice shifting to other jobs, domestic rice production will drop.”

In a separate statement, Piñol said a flood of imports may force Filipino farmers to seek other means of livelihood and this will affect domestic rice output.

“We also see the supposed benefits of full liberalization – such as cheaper rice for all consumers – as temporary. We expect this to quickly exert pressure on rice demand in the thinly traded international markets and steadily increasing international prices. We may actually end up with higher rice prices, of which we have no control or influence,” said the DA. This situation can lead to a dependence on imports, which, while cheap at the start could turn out to be more expensive in the long run, the DA pointed out.

“Even if we have the foreign exchange resources to buy from the international market, there may not be enough as international supplies become increasingly vulnerable to climate change impacts on exporters,” added the DA.

Piñol claimed supply can also be an issue even if the Philippines is able to afford the rates charged by international suppliers.

The country, he said, will be vulnerable to unilateral action by exporters, who, for example can impose bans without being sanctioned by the World Trade Organization.

For the DA, another two years will allow the country to achieve rice self-sufficiency, cancelling the need for tariff protections that have been extended several times by the WTO.

‘2 years not enough’

Economist Agustin Arcenas, however, doubts two years will be enough.

The University of the Philippines professor said “it doesn’t make economic sense anymore to keep insisting that we produce our own rice.”

He reminded everyone that “the reason we are not a major producer [is that we cannot match the productivity] of Thai and Vietnamese farmers.”

Two years “is short,” Arcenas insisted, adding, “I mean, we’ve been trying for many years and we haven’t gained headway in productivity.”

The proposal found support with the National Irrigation Administration, although the agency’s own target extends past two years to 2021.

NIA administrator Peter Laviña said the two years’ extension “is not our target…but we will support DA if that’s the target. We’ll support [that]; of course [there are limitations because we are] undertaking infrastructure projects” and immediate water will not be available as these projects pend. “We will not be able to achieve rice self-sufficiency without irrigation.”

Meanwhile, the DA’s position is at odds with the National Economic and Development Authority, which says the removal of the rice quantitivate restrictions will bring down domestic food prices.

Piñol said the DA is preparing contingency plans and may also insist on stricter inspections to make sure that rice imports are safe for consumption.

Programs to increase domestic production will continue, particularly the flagship Masaganang Ani 6000 scheme, where 1 million hectares of farmland will receive support in the form of hybrid rice seeds, sufficient fertilizer and irrigation, and mechanization.

2016 in review: Trouble for the rice industry

Shifting rice prices has had a huge impact on the rice industry in 2016.

The monsoon rice was priced at Ks350,000 (US$250) per 100 baskets, lower than last years price of Ks500,000.

From April 1 to December 16, the country exported around 590,000 tonnes of rice compared with more than 700,000 tonnes last year, according to the Ministry of Commerce.

The falling prices and trade volume are linked to rice surplus and lower demand.

The rice market, which is heavily dependent on Chinese buyers, had been hit hard since China banned imports earlier this year, with farmers, rice millers and merchants all suffering losses.

China has yet to permit rice trading with Myanmar.

Since China stopped importing,, last year’s rice remained in warehouses. When the new harvest hit the shelves, prices began falling due to the growing supply.

The Ministry of Commerce made efforts to obtain rice export contracts with other nations.

The Philippines has offered to make a government-to-government treaty to buy rice from Myanmar.

The country had exported around 60,000 tonnes rice to the EU and Africa every month, according to the Myanmar Rice Federation (MRF).

Moreover, climate disorder has contributed to the problem. Untimely rain destroyed more than 16,000 acres of rice fields, according to the Ministry of Agriculture, Livestock and Irrigation’s figures on August 8.

In a bid to solve declining rice prices, the government planned to buy rice from farmers at an inflated price. The Ministry of Commerce asked for Ks15 billion from the state’s revolving fund in order to purchase rice from farmers at a responsible price.

The move aimed to enable farmers to cover their production costs due to a decline in monsoon paddy prices. It could help increase demand, support the revival of rice market and benefit all those engaged in the supply chain system effectively.

Myanmar Agribusiness Public Corporation, formed by the MRF, also planned to import dryers in order to provide dryer services at rice mills.

Under this plan, members of the MRF, exporters, and rice millers will buy rice from farmers, and the government will increase its rice export volume.

After a period of continuous fall, the rice price spiked to Ks500,000 per 100 baskets in November due to dollar appreciation.

From April 1 to November 25 this financial year, the country earned over US$230 million on rice and broken rice exports, according to the Ministry of Commerce.

Innovations ratchet up rice production

Global rice production has increased enormously over the past few decades, improving the world’s food security. At the same time, the gains in production and resulting boost to the supply of rice have made the commodity much cheaper and ultimately less profitable, particularly for small farmers.

Thanks to more efficient machines and farming methods, better irrigation systems and new, more resilient and higher yielding varieties of rice, the major players — including China, India, Indonesia, Bangladesh, Vietnam, Thailand, Myanmar and Japan — now produce more of the primary staple with less cost in time and effort.

Production has increased substantially by almost 100m tonnes in the last decade. This production of raw rice translates into roughly 498m tonnes of milled rice.

Innovative Chinese technology is now boosting rice production in the country’s north-western and eastern regions. The Chinese-developed programme introduced in these regions in 2006 has shown improvement in yields, and the control of dangerous weeds, crop diseases, destructive insects and climate effects.

It was announced in November that one of the world’s most famous rice researchers, 86-year-old Yuan Longping, set a production record when one variety managed to produce 1,538 kilograms of rice per mu. One mu is equal to about 0.07 hectares.

Today, the global supply of rice is growing faster than demand.

Speaking to China Daily Asia Weekly, Thomas Voon, associate professor at Lingnan University’s department of economics in Hong Kong, said that rice production is now ‘open to mechanisation.’

“Besides, many types of high-yielding and disease resistant strains have been produced in recent decades. These are some of the reasons why rice prices have not gone up in tandem with some other commodities.”

Technology for rice plantation that saves water is one example of such a breakthrough. In 2012, the Japanese government, through a programme called the Rice-based and Market-oriented Agri­culture Promotion Project (RiceMAPP), introduced a water-saving technology that made rice fields much more productive.

According to UN Water, a coordination platform for freshwater-related issues, agriculture is the world’s biggest water user, with irrigation accounting for 70pc of global water withdrawals.

The International Rice Research Insti­tute estimates that 35 to 45pc of all water used in irrigation goes to rice farming — around 1,000 cubic kilometres per year.

Water has traditionally been the most expensive input in rice farming, and with increasing diseases and declining soil fertility, paddy farming is proving unsustainable.

New technologies are helping cut down on how much water goes into rice farming.

RiceMAPP’s research suggests that rice fields do not need to be flooded with water every day to give better yields. The program involves intermittent irrigation, where farmers are only required to irrigate their rice paddies for three days before taking a break of seven days.

To ensure an even flow of water into the farm, farmers are also trained to level their farms before planting seedlings. Rice seedlings are transplanted to the fields at three weeks instead of the usual five.

Farmers in various parts of Southeast Asia and Africa are also learning a new rice farming method called the System of Rice Intensification (SRI), introduced by the National Irrigation Board of Kenya in partnership with AgSri, an agricultural innovation organisation from India.

Farmers have been working with SRI on ways to save water, but the system is also providing a new seed variety that ensures good-quality seedlings and increases the chances of higher yields.

Using the SRI methodology, farmers and agricultural engineers have reported using just 5kg of seed per acre, about a quarter of the seed used in traditional rice farming. There are around 2.5 acres in a hectare.

Another key difference is the method of planting. In traditional paddy farming, seeds are planted directly under water. Using the SRI method, seeds are placed on raised seedbeds, which are watered sparingly, thus saving water.

Also, the method is faster, which can lead to more crops. The new method requires between eight and 12 days for seed transplantation compared to the 21 days required under more traditional methods.

Joel Tanui, regional manager of the National Irrigation Board of Kenya, expects the new method will more than double production from 2 tonnes of rice per acre to more than 4 tonnes.

Not only is research into planting methods facilitating more production but rice researchers and farmers are increasingly open to working with more resilient varieties.

Rice-producing countries are looking into climate-smart varieties that adapt to unfavourable environments. Climate-smart rice is much more resilient.

These varieties can withstand the adverse effects and growing number of environmental threats, including drought, flooding and salinity, an increasing problem associated with rising sea levels.

A case in point is the Philippines, a big producer but also one of the country’s most vulnerable to climate change, according to Calixto Protacio, executive director of the Philippine Rice Research Institute.

China authorises 22 Vietnamese rice exporters

China & Vietname

China has authorised 22 Vietnamese businesses to export rice into its market, Việt Nam’s Ministry of Agricultural and Rural Development (MARD) announced.

China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) has given only 22 firms permission to start exporting rice and rice products starting January 1, counting from the date of departure from the Vietnamese border.

Any businesses not listed by AQSIQ will be banned from exporting to the Chinese market from January 1, the ministry’s Plant Protection Department (PPD), which received the related documents from AQSIQ on December 23, said.

The PPD has notified the Vietnam Food Association, sterilisation companies for exported rice and the 22 listed businesses, and published the list online at www.ppd.gov.vn.

The PPD has ordered the 22 companies to comply strictly with the regulations on food safety and plant quarantine set by both Việt Nam and China. It has also urged sterilisation companies authorised by the AQSIQ to work with rice exporters to maintain the quality of the rice and ensure there are no storage pests.

The AQSIQ has issued the list after carefully considering numerous Vietnamese businesses that had applied for permission to export. A group of Chinese experts had travelled to Việt Nam to inspect 31 enterprises that had previously applied to the local ministry for export rights to China.

Among the several countries that import Vietnamese rice, China tops the list with 35.4 per cent of market share in the first three quarters of 2016, according to MARD.

The total rice export turnover into the Chinese market touched 1.35 million tonnes amounting to $613.4 million, down 23 per cent in terms of quantity and 13.9 per cent in terms of value as compared to the same period in 2015.