Monthly Archives: March 2017

Mexico grants Thailand rice quota

Thailand is expected to export 10,000 tonnes of long-grain white rice to Mexico soon after receiving a free import tariff quota from the Mexican government, says Commerce Minister Apiradi Tantraporn.
Mrs Apiradi said Mexico recently allowed zero tariff for 150,000 tonnes of imported long-grain white rice from March 2 to Dec 31 this year, as its government seeks to lower the country’s food costs and meet higher demand.
Apart from Thailand, the Mexico has also granted the zero tariff for long-grain white rice to Argentina, India, Italy, Uruguay, Vietnam and the US. The country’s import tariff for rice is normally set at 20%.
Under the combined 150,000 tonnes this year, the Mexican government has set a maximum 10,000 tonnes per company to get free import tariff.
Mexico’s Ministry of Economy announced the quota for these countries on the Official Gazette recently, said Mrs Apiradi.
“The quota allocation will be done on first-come first-serve basis so Thai companies should moves fast to ensure they benefit from the quota,” said Mrs Apiradi.
Exporters can ask to ship rice under the quota at the National Agro-Alimentary Health, Safety and Quality Service (Senasica), which is the food and drugs authority of Mexico.
The quota accounts for 13% of total Mexican demand for rice in 2016 of 1.12 million tonnes.
Mexico relies heavily on imported rice. In 2016, its demand for imported rice rose by 7% from 2015 to almost a million tonnes, or 83% of total rice consumption last year.
The Mexican government has attempted to cope with the high demand over the past five years by promoting domestic rice plantation. Since then rice output per year has only risen by 8.5%.
In 2016, Thailand was the fourth largest long-grain white rice supplier to Mexico, with a 3% market share, following the US, Uruguay and Argentina.
The US share was as high as 45%, Uruguay 40% and Argentina 7.7% .
Last year, Thailand shipped a total of 7,690 tonnes of long-grain white rice to Mexico worth US$ 3.3 million, which was about 50% lower than 2015, both in terms of volume and value.
The decrease of Thai rice exports in Mexico was mainly due to higher logistics costs than its rival countries.
Mrs Apiradi said that the ministry has planned to promote Thai rice more aggressively through Mexican rice importers and retailers such as Costco Department Store which operates 37 branches in Mexico, and Walmart.
“Through these retailers, we hope to increase the presence of Thai rice among Latin American countries,” said Mrs Apiradi.
The Commerce Ministry anticipates Thai milled rice exports to reach 10 million tonnes this year, of which 5.2 million are expected to be sold in Africa, 2.2 million tonnes in Asia, 600,000 tonnes to the US, 400,000 tonnes to the euro zone, 360,000 tonnes to the Middle East and 210,000 tonnes to Oceania.
Rice sales through government- to-government deals (G2G) comprise deals with China, under which Thailand has agreed to deliver 100,000 tonnes per month this year. Further G2G deals are under discussions with Indonesia, Philippines, Sri Lanka, Bangladesh and Egypt.
Duangporn Rodphaya, director-general the Foreign Trade Department said the Commerce Ministry will lead the Thai delegation to Japan to meet rice exporters there in March 7-10.
She added that the Thai delegation hopes to discuss the opportunities to export short-grain white rice to Japan before Japan’s Crop Production Bureau of the Ministry of Agriculture, Forestry and Fisheries begins its annual rice import auction for 2017 in April until March 2018.
Thai rice shipments to Japan average more than 300,000 tonnes per year.
In 2016, Japan imported 325,436 tonnes from Thailand, an increase of 15% from the year before.
For the first month of this year, Japan has imported almost 46,000 tonnes of Thai rice, an increase of 37% from last year.

Mexico offers zero tariff for rice import

Thailand is expected to export 10,000 tonnes of long-grain white rice to Mexico soon after receiving a free import tariff quota from the Mexican government, says Commerce Minister Apiradi Tantraporn.
Mrs Apiradi said Mexico recently allowed zero tariff for 150,000 tonnes of imported long-grain white rice from March 2 to Dec 31 this year, as its government seeks to lower the country’s food costs and meet higher demand.
Apart from Thailand, the Mexico has also granted the zero tariff for long-grain white rice to Argentina, India, Italy, Uruguay, Vietnam and the US. The country’s import tariff for rice is normally set at 20%.
Under the combined 150,000 tonnes this year, the Mexican government has set a maximum 10,000 tonnes per company to get free import tariff.
Mexico’s Ministry of Economy announced the quota for these countries on the Official Gazette recently, said Mrs Apiradi.
“The quota allocation will be done on first-come first-serve basis so Thai companies should moves fast to ensure they benefit from the quota,” said Mrs Apiradi.
Exporters can ask to ship rice under the quota at the National Agro-Alimentary Health, Safety and Quality Service (Senasica), which is the food and drugs authority of Mexico.
The quota accounts for 13% of total Mexican demand for rice in 2016 of 1.12 million tonnes.
Mexico relies heavily on imported rice. In 2016, its demand for imported rice rose by 7% from 2015 to almost a million tonnes, or 83% of total rice consumption last year.
The Mexican government has attempted to cope with the high demand over the past five years by promoting domestic rice plantation. Since then rice output per year has only risen by 8.5%.
In 2016, Thailand was the fourth largest long-grain white rice supplier to Mexico, with a 3% market share, following the US, Uruguay and Argentina.
The US share was as high as 45%, Uruguay 40% and Argentina 7.7% .
Last year, Thailand shipped a total of 7,690 tonnes of long-grain white rice to Mexico worth US$ 3.3 million, which was about 50% lower than 2015, both in terms of volume and value.
The decrease of Thai rice exports in Mexico was mainly due to higher logistics costs than its rival countries.
Mrs Apiradi said that the ministry has planned to promote Thai rice more aggressively through Mexican rice importers and retailers such as Costco Department Store which operates 37 branches in Mexico, and Walmart.
“Through these retailers, we hope to increase the presence of Thai rice among Latin American countries,” said Mrs Apiradi.
The Commerce Ministry anticipates Thai milled rice exports to reach 10 million tonnes this year, of which 5.2 million are expected to be sold in Africa, 2.2 million tonnes in Asia, 600,000 tonnes to the US, 400,000 tonnes to the euro zone, 360,000 tonnes to the Middle East and 210,000 tonnes to Oceania.
Rice sales through government- to-government deals (G2G) comprise deals with China, under which Thailand has agreed to deliver 100,000 tonnes per month this year. Further G2G deals are under discussions with Indonesia, Philippines, Sri Lanka, Bangladesh and Egypt.
Duangporn Rodphaya, director-general the Foreign Trade Department said the Commerce Ministry will lead the Thai delegation to Japan to meet rice exporters there in March 7-10.
She added that the Thai delegation hopes to discuss the opportunities to export short-grain white rice to Japan before Japan’s Crop Production Bureau of the Ministry of Agriculture, Forestry and Fisheries begins its annual rice import auction for 2017 in April until March 2018.
Thai rice shipments to Japan average more than 300,000 tonnes per year.
In 2016, Japan imported 325,436 tonnes from Thailand, an increase of 15% from the year before.
For the first month of this year, Japan has imported almost 46,000 tonnes of Thai rice, an increase of 37% from last year.

Pakistan poised to boost food exports to ECO countries

Pakistan can boost its food exports to ECO countries as it now leads this 10-nation economic bloc for the next five years and as the China Pakistan Economic Corridor opens up a lot of fresh opportunities.

According to an old study conducted by the ECO secretariat, out of the 15 top items that Pakistan can export to ECO countries, five fall into the food category. These are: fruits and vegetables, rice, cereals cereal preparations, animal and vegetable fats and live animals.

“Food exports must be prioritised in all our efforts to increase overall exports to ECO countries, because, except in the case of Turkey and to some extent Iran, our key exports to ECO fall into the foods category.”

Afghanistan is already one of the country’s biggest food exports market. Food exports to Iran are growing after the lifting of US-led international sanctions on that nation. Chances for boosting food exports to Turkey have also brightened after the establishment of a Halal certification authority in Pakistan.

“And, food exports to Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan are expected to rise as they have start realising that trading with us is easier and strategically important in the CPEC era,” says a senior official of the Trade Development Authority of Pakistan.

“Already 80pc of our total exports to these countries fall into the foods category and demand keeps growing.”

$27.3 bln of export revenue for Vietnam in two months

Vietnam’s total export earnings hit $13 billion in February, raising the total in the first two months of this year to $27.3 billion, up 15.4 percent annually, said the Ministry of Industry and Trade (MoIT).

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Of the two-month figure, 19.7 billion USD was contributed by foreign investment sector, including crude oil, marking a 16.8 percent increase while the remaining was from domestic sector, up 12.2 percent.
The MoIT’s statistics showed that agro-forestry-fisheries earned 3.2 billion USD in February, or 9.9 percent rise year-on-year, accounting for 11.4 percent of the total.
Several commodities raked in less export revenues, including rice (21.4 percent), pepper (26.9 percent), cassava and its products (15.8 percent).
Mineral and materials group saw a 49.2 percent surge to nearly 0.7 billion USD, equivalent to 1.9 percent of the total. Meanwhile, processing industry group earned 22 billion USD, up 1.5 percent year on year and making up 80.6 percent of the total. Only a few commodities suffered steep export prices such as pepper (21.1 percent) and ore and other minerals (48.4 percent).
Notably, the US remained Vietnam’s largest importer with a two-month growth of 18.9 percent, or 21.8 percent of the country’s total shipment. It was followed by Asia, European Union, China and the Republic of Korea.
According to experts from the MoIT’s Export-Import Department, the decrease in export volumes of agro-forestry-fisheries, minerals and materials shows that domestic exporters are facing increasingly intense competition from their Cambodian, Philippine, Bangladeshi and Pakistani rivals, pointing to the need to outline a long-term scheme to stabilise export capability.
During the two months, the import of iron & steel wastages and nine-seater automobiles from ASEAN and India rose significantly due to a reduction of tariff imposed on ASEAN automobiles with fewer than nine seats from 40 percent to 30 percent as committed in the ASEAN Trade in Goods Agreement, and steep discount of made-in-India car prices to compete with those from Thailand and Indonesia.
The MoIT is embarking on a sustainable export development scheme, in which, specific measures are outlined to restructure the market, renew growth and improve competitiveness of export products.
It will also accelerate trade promotion of goods of high competitiveness, expand export markets for key items and develop production to meet domestic and overseas demand, towards a more balanced trade.

Rice growers awash in import problems

Charley Mathews Jr. says rice farmers try to do everything they can to improve efficiencies, lower costs and increase production without sacrificing quality.

Charley Mathews Jr. grew up working in his family’s rice fields.

“Like many farm kids, I started to drive a tractor when I was 12, irrigated rice in the summertime, and always participated when I could for planting and harvest,” he said.

He grew up near Marysville, Calif., where he still farms.

Mathews grows medium, premium medium and sweet rice. The medium and short grain varieties grown in California have all the characteristics of Japanese rice — soft and sticky — which is prefect for sushi. California is the world’s low-cost producer of sushi rice, and it is marketed around the world.

Like most crops, rice faces insect and weed pests, he said.

“Since rice is grown in an aquatic environment under a continuous flood, many aquatic weeds thrive and compete with rice for sunlight and nutrients,” he said. “The rest of the weeds are drowned by deep water.”

Insects are a minor challenge but require constant monitoring, he said.

Rice, Mathews said, has historically been viewed as a water-intensive crop. It actually uses about as much water as any other row crop.

Rice is grown in heavy clay and hardpan soils that have an impermeable layer below the root zone that does not allow water to percolate downward.

This soil type would drown trees and other row crops, but is perfect for rice. It does not suffer from salt buildup or any other long-lasting issues.

“I have a rice field that has been in continuous production for almost 80 years,” he said. “The yields seem to go up every year.”

Rice is not as labor-intensive as many other crops and growing it is highly mechanized. With expensive machinery to operate, it is important that growers find talented labor who can get the most out of the equipment.

“Rice growers have several challenges,” he said. “The ones we face locally have to do with air and water quality, and that fact that we are competing with an encroaching urban population that does not like noise or dust.”

Through the efforts of the California Rice Commission, he said, new urban neighbors are beginning to understand the environmental and social value of a rice field.

“Outside California we are challenged with a strong dollar that makes us less competitive,” he said. “Other rice-growing countries are illegally subsidizing their rice production to keep world prices low and unprofitable for us.”

In addition, World Trade Organization trading partners are not allowing California rice on store shelves in their countries as a way to protect their own rice growers, he said.

Imported rice has been competitive with California rice. It is mostly Jasmine from Thailand and Basmati from India. They are very different varieties but are taking normal customers away, he said.

“No one in the rice industry takes what we have for granted,” Mathews said. “We have watched other California crops like sugar beets simply disappear due to poor economics and world competition.”

He said rice farmers try to do everything they can to improve efficiencies, lower costs and increase production without sacrificing quality.

“But at the end of the day, we can only do so much and greatly depend on customers that understand the real value of our product and not just a simple commodity,” he said.

Checks for rice exporters

More than 40 rice millers have applied for quality checks to allow for export to China but most have not yet reached a high enough standard, the Agriculture Ministry said.

Applications were received in a second call for expressions of interest after 28 millers gained certification in the first round.

Hean Vanhan, director-general of the ministry’s general directorate of agriculture, said most of the millers have not done enough preparation for the quality checks.

“The Agriculture Ministry will conduct a workshop this month to help them learn about the policies and preparation for the checks,” he said.
“We want to help them pass the inspections for quality checks made by our officials and Chinese experts.”

He added that the ministry will send officials to check rice millers’ quality three weeks after the workshop.

Mr. Vanhan said he was not sure how long the quality checks by local officials and Chinese experts would take, but said millers which passed in the second round will join the other 28 in shipping 200,000 metric tons a year to China.

He also said that millers who failed in the first round are among the 40.

The ministry started their inspection of 60 millers in October, and in November, a group of Chinese experts inspected the quality and safety of the 28 successful rice mills during a week-long visit in Cambodia. All of them passed.

But only 18 of them were given priority to export rice to China due to their experience of Chinese markets, according to Cambodia Rice Federation (CRF).

“After a discussion between the Chinese company COFCO, CRF, and Green Trade from December, in Beijing, three parties agreed to allow the first 18 local rice mills to start fulfilling the export quota as most of these companies have experience exporting rice to China in the past,” Hun Lak, CRF vice president said previously.

China tops the biggest markets for Cambodia’s milled rice last year, with the country’s total 542,144 metric tons, 127,000 metric tons of which were shipped to China.

Cambodian milled rice exports reached 109,000 metric tons in the first two months this year, up 14 percent over a year before, according to the ministry’s month report. Of this, 46,000 metric tons were sent to China.

Rice import goes up in two weeks

Rice import has been increasing for last two weeks amid its persisting higher price in the domestic market and decline in prices in neighbouring India, said sector insiders.

Even after paying 25 per cent customs duty, private importers are making profits by importing two specific rice varieties from India, they added.

The food ministry data showed that private rice millers so far brought over 54,000 tonnes of rice in the current financial year (FY’17) of which 14,000 tonnes entered just in last 15 days.

The rate of rice import was 160-172 tonnes a day earlier which increased to 900-1,000 tonnes in March, said a food ministry official.

L/C (letter of credit) has been opened to bring another 43,000 tonnes of rice, he added.

Rajib Kumar, a Dinajpur-based importer, told the FE that Brri dhan-28 is now selling at Tk 43-43.5 a kilogram at local mill gates.

He said import cost (including 25 per cent customs duty) of the same variety, known as Ratna in West Bengal, India ranges between Tk 41 and Tk 42 a kg. He said the difference between the prices in India and Bangladesh is encouraging imports.

Lalit Saha, another importer, said prices of Swarna and Ratna declined to some extent in India in February last.

He said finer Swarna was selling at Tk 36-36.5 a kg at mill gates in Bangladesh, but its import cost was Tk 34.0-Tk 34.5.

However, he informed the FE that most of the L/Cs have been opened between February and the first week of March when prices of Swarna and Brridhan-28 were US$ 343- 360 a tonne in India.

The government imposed 25 per cent customs duty at the very beginning in FY’17 following paddy price debacle during harvesting periods which caused huge losses to the farmers. After imposition of import duty, rice prices in Bangladesh started rising.

The price hike of different varieties of rice ranged between 7 per cent and 23 per cent in last seven months, according to Trading Corporation of Bangladesh (TCB).

Coarse rice Swarna is now selling at Tk 37-Tk 40 while medium quality Brridhan 28 and Paijam at Tk 45-Tk 48 and finer variety Miniket, Jeerashail and Najirshail at Tk 48-Tk 58 a kg in the country.

Md Hazrat Ali, a Nilphamari-based trader, said import of Brridhan-28 will continue until the beginning of local Boro harvesting from next month.

The mills face a supply shortage of Brridhan-28, the most-consumed rice variety which grows during the Boro season.

He also pointed out that many big stockists who have a huge stock of Swarna paddy are now making hefty profits.

According to Bangladesh Bureau of Statistics (BBS), Brridhan-28 accounts for nearly 44 per cent while Swarna accounts for over 24 per cent of the country’s total rice output.

Secretary of Bangladesh Auto Major Husking Mill Owners Association K M Layek Ali said paddy prices were much higher from last Aman season which benefited the farmers.

The prices of rice will come down to some extent from May with starting of the harvesting season, he said, adding that the existing customs duty should remain in force to protect the local rice industry.

The government should strengthen monitoring so that no one can bring animal food in the name of rice for human consumption, he said. The government has now a stock of nearly 0.64 million tonnes of rice which was 1.06 million tonnes in the corresponding period last year.

Bangladesh produced over 34.57 million tonnes of rice in FY’16 against a demand for 31.0 million tonnes, according to BBS and Directorate General of Food (DGoF)

China set to cut into India, Vietnam rice exports in 2017 – USDA

Falling demand and overseas competition are expected to bite into Vietnam’s rice exports.
India and Vietnam, the world’s leading rice exporters, may see overseas sales fall below previously expected levels due to slowing demand and rising competition from China, the U.S. Department of Agriculture (USDA) said in a recent report.

India’s rice exports year could fall by 300,000 tons to only 10 million tons “on slower pace and stronger competition in West Africa”, the USDA said in its March report, putting it on a par with shipments expected from Thailand.

It more than doubled its forecast for China’s rice exports this year to 500,000 tons from 225,000 tons, the report said, citing rising sales in East Asia and West Africa.

The USDA also cut Vietnam’s rice export forecast by 3.6 percent to 5.6 million tons this year, citing “reduced trade to Southeast Asia and Africa”.

With the lower projections, India and Thailand will share the world’s largest rice exporter title this year, followed by Vietnam and Pakistan. Last year, India was the world’s biggest rice exporter, followed by Thailand.

Vietnam’s rice exports in the first two months of this year fell 23.5 percent from the same period in 2016 to 738,000 tons, based on data from Vietnam Customs released this week.

Rice exports in the two-month month period brought in $314 million, 24.7 percent below the corresponding period in 2016, data showed.

On a brighter note, Mexico has given the green light for 150,000 tons of rice to be imported at a zero percent tariff, starting from March 1, to meet domestic demand and diversify its supply sources, a move that would cut the market share currently held by the U.S. and open the door to Vietnamese rice.

“The United States is expected to remain the dominant supplier (for Mexico), but recent history suggests that other suppliers will likely gain additional sales,” the USDA said.

Chinese poised to agree to new rice deal

The Ministry of Commerce says a new agreement is under way to export 100,000 tonnes of rice to China by sea.

“It’s not the ministry itself that will export. The Myanmar Agribusiness Public Corporation [MAPCO] was previously offered the quota by China to export 100,000 tonnes of rice. There’s now a deal underway for another quota of the same amount. The previous quota is almost fulfilled,” said Khin Maung Lwin, a senior official from the ministry.

The previous deal was reached in 2014.

Myanmar exports most of its rice to China through the Muse border and also exports rice to more than 30 countries by sea.

Rice exports to China last year saw a significant decrease due to rebel attacks on Muse and Chinese officials taking strict action on Myanmar’s exports.

Other exports also decreased this year due to the instability in the border areas and increased security checks.

The MAPCO chose instead to export rice by sea and the weak kyat has driven up exports. Maritime exports struggled in the past because of the policies of the former government.

The MAPCO is preparing to sell its shares at the Yangon Stock Exchange.

Asia Rice-Rice prices advance in India, Vietnam while Thai prices drop on weaker baht

Rice prices in India and Vietnam advanced while Thai prices dropped due to a weaker baht, traders said on Thursday.
In India, the world’s biggest rice exporter, 5-percent broken parboiled rice prices rose to $375-$380 per tonne from $373-$378 last week, as demand improved from African buyers.
“In last few days African buyers have become active,” said an exporter based at Kakinada in southern Indian state of Andhra Pradesh.
Another exporter in Kakinada said local buyers were also activate in the market.
“The competition between exporters and local buyers is keeping paddy prices firm,” he added.
Along with private buyers, government agencies are actively buying paddy for the public distribution system, pushing prices up above the minimum purchase price, exporters said.
The country’s rice production in 2016/17 is likely to rise by 4.3 percent to a record high 108.86 million tonnes, Farm Ministry said on Wednesday.
In Vietnam, the world’s third largest rice exporter, 5-percent broken rice prices rose to $355-$360 a tonne, from $350-$355 a tonne last week on thin supply near a new harvest season.
“Prices in Vietnam now are higher than other countries, keeping foreign importers from buying,” said a Ho Chi Minh-based trader.
He added that Vietnam’s market was quiet but will be more lively once the harvest season starts by the end of this month.
The harvest season will significantly raise supply, which in turn will ease prices.
In the world’s second biggest exporter, Thai benchmark 5-percent broken rice narrowed to $350-$355 a tonne, free-on-board (FOB) Bangkok, from $350-$360 last week.
Traders said this was due to the Thai baht weakening against the U.S. dollar at 35.33 baht per $1, down from 34.98 baht per $1 last week.
“There isn’t much demand going on, and the baht is weaker,” a trader in Bangkok said.
Thailand sold 1.35 million tonnes of rice from state stockpiles in its first auction of the year worth $376 million on Tuesday.
It also said it will hold another auction for 3.66 million tonnes of spoiled rice for industrial use but did not say when.
Thailand has exported about 2 million tonnes of rice this year up until March 6, the ministry said, down 2.05 percent from the same period last year. ($1 = 35.33 baht)