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Pakistan Ships Over 800,000 Tons Rice to China in 2011-12 By news desk on November 28,2012
Pakistan has become one of the chief suppliers of rice for China, accounting for over 800,000 tons or 40% of the total estimated rice imports of around 2 million tons by China this year, according to sources. China’s total rice imports reached 600,000 tons in 2011, according to FAO, but the country has become one of the top rice importers this year mainly due to high domestic prices. According to Pakistani rice traders, a record 800,000 tons of rice has been shipped to China in the year ending September 2012, and the demand is growing. Average prices of Pak 5% rice stand at around $435 per ton, compared to over $500 per ton of comparable quality rice in China, say traders. Pakistan is able to supply rice at low prices due to the low freight charges at below $10 per ton. Traders add that while Vietnam also supplies rice at competitive prices, Chinese prefer the aroma and taste of Pak rice over rice from other origins.
Venezuela Increases Price Cap on Rice to $1,764 Per Ton, Up 28%; Imports Continue Despite Increase in Rice Acreage By news desk on November 28,2012
The Venezuela government has allowed the price cap on rice to increase almost 28% from 5.62 bolivars (about $1,307 per ton) to 7.2 bolivars (about $1,764 per ton), according to the Agriculture Minister Juan Carlos Loyo. Price caps for several other agriculture products, including corn and coffee, were also raised. In Venezuela, increasing production of rice and other agriculture products remains a challenge as a large percentage (about 70%) of agriculture lands lie in the control of a few private owners, leading to low utilization and productivity. The Chavez government has embarked on recovery mission of lands since 2001 to make the country self-sufficient in food production and also to diversify the country’s economy from oil to agriculture. The government has also placed price controls on essential commodities since 2003 to prevent speculation on commodities. 2 Rice Plus Magazine www.ricepluss.com News and R&D Section mujajhid.riceplus@gmail.com Cell # 92 321 369 2874
According to local sources, the government has recovered over 4 million hectares of the total 30 million hectares of arable land and redistributed it to small farmers and cooperatives. However, the country has to rely on imports to meet the domestic food consumption. Recently, the President Hugo Chávez said that the country’s food production has reached around 80% sufficiency, with rice sufficiency at 90%. He also said that this year the country may achieve 100% rice sufficiency depending on weather conditions. However, the USDA says that Venezuela produces only about 385,000 tons of rice or around 60% of its domestic requirement of around 625,000 tons. Earlier this year, the USDA Post in Venezuela said while government efforts have led to an increase in rice acreage this year, the country has to continue imports of rice at least until 2013 to meet domestic demand. The Ministry of Food and Corporation CASA estimates that Venezuela’s paddy rice imports in 2012 could reach around 625,000 tons (about 420,000 tons, basis milled), up almost 70% from the USDA official estimates of around 250,000 tons of milled rice.
Brazil Paddy Rice Prices Decline 2.5% to $360 Per Ton Last Week By news desk on November 28,2012
Average Brazilian paddy rice prices declined sharply last week to around 37.38 real per 50 kilograms (about $360 per ton), dropping below the 38 real per 50 kilogram ($370 per ton) mark for the first time since first week of September. According to Brazil's paddy rice index maintained by CEPEA, average paddy prices as of November 27 stood at around 38 real per 50 kilograms (about $360 per ton), down almost 2.5% from 38.49 real per kilograms (about $370 per ton) recorded on November 19, 2012. Current prices are down almost 8% from this year’s peak of around $390 per ton prices in the first week of October. However, prices are still about 4% higher than around $345 per ton recorded in the last week of August this year, and about 30% higher than around $278 per ton average paddy prices recorded on November 28, 2011. Speculations that production may decline this year combined with strong exports led to a spike in Brazilian rice prices this year. However, recent rice auctions by the National Supply Company (Conab) and fresh official estimates that paddy rice production is unlikely to drop below last year levels of around 13.6 million tons have stabilized prices in the past week.
Thailand PM, Rice Mortgage Program Survive No-Confidence Vote By news desk on November 28,2012
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After three days of debate in Thailand’s Parliament over alleged irregularities in the rice mortgage program and other schemes, the ruling government survived a no-confidence vote mainly due to the three-fifth majority that the coalition enjoys in the Parliament. Today, members of the Parliament voted 308 to 159 in favor of Prime Minister Yingluck Shinawatra and the government rice mortgage program which had been criticized by the opposition in the three-day debate. The opposition alleged that the rice mortgage program led to huge losses for the government and traders, allowing India and Vietnam to overtake the country as the largest rice exporter after nearly 25 years. The opposition also claimed that benefits of the program did not reach the poor farmers and that it had rampant corruption. The government has also been criticized of hiding facts about the government-togovernment rice deals under the garb of secrecy because most of the deals (particularly the recent deal with China) are not transparent. In response, the Thai PM assured the Parliament today that the rice mortgage program benefits the poor rice farmers and has helped increase rice prices. She added that the government is planning to use IT and cameras to keep corruption under check.
However, the Opposition has said that it will ask the National Anti-Corruption Commission (NAAC) and the AntiMoney Laundering Commission (AMLC) to probe the irregulaties in the rice mortgage proggram and the G2G deal with China. Under the rice mortgage program, the government buys paddy rice from farmers at 30-40% premium over market rates. The program was an electoral promise of the ruling party and was implemented in October 2011. However, it has led to a 40% drop in Thai rice exports and is believed to cause losses amounting to about 200 billion baht (about $6.5 billion) per year.
Oryza Quick Glance at MDA Rice Crop Weather Update By news desk on November 28,2012
Oryza shares some of MDA Earth Satellite Weather’s latest rice crop weather updates: Rainfall in the past weeks helped rice planting in northern Brazil and moisture supplies will further improve in centre-south Brazil due to continued rainfall this week. Moisture supplies increased in Argentina and Uruguay last week, favoring rice crop there. Heavy rainfall is expected in South China this week, which may further delay harvest of the rice crop there. Rainfall is likely to lessen in Japan this week, averting any major delay of the harvest of the rice crop. Dry weather will favor harvest in Thailand. Light rainfall in the Philippines last week favored rice harvest in some areas; more rains are required in central and northern areas for secondary rice crop planting. 4 Rice Plus Magazine www.ricepluss.com News and R&D Section mujajhid.riceplus@gmail.com Cell # 92 321 369 2874
Active rainfall in Indonesia is likely to improve conditions for main crop season but delay harvest of secondary rice crop. Flooding continues in some parts of southern Nigeria and western Cameroon, but reduction in rainfall in northern Nigeria will favor harvest of main rice crop. Rainfall in southern India favored rice crop there. Rest of the country is expected to remain mostly dry this week. For more complete weather information, contact http://www.mdafederal.com/mda-earthsat-weather.
Philippines 2013 Rice-Sufficiency Target Unrealistic, Unachievable, Says Study By news desk on November 28,2012
A new study says that the Philippine government cannot meet its target to achieve self-sufficiency in rice
next year or even by 2020, because of slow growth in the country’s rice yield and production. The study commissioned by Philippine Institute for Development Studies (PIDS) says that to meet the targets set under the government’s Food Staples Sufficiency Program (FSSP), rice yield has to increase at 5 Rice Plus Magazine www.ricepluss.com News and R&D Section mujajhid.riceplus@gmail.com Cell # 92 321 369 2874
the rate of 3.8% per year, while rice production has to increase around 6.3% per year between 2011 and 2016. However, the growth rates of rice yield and production between 1994 and 2010 are around 1.5% and 3.2% respectively, said a researcher of the study. The researcher said that the targets under the FSSP are unrealistic and has asked the government to concentrate on making rice affordable and nutritious instead of focusing on reducing rice imports. The Philippine government plans to end rice imports next year. It hopes meet the goal by increasing paddy rice production from the current 18 million tons to 20.04 million tons in 2013, 21 million tons in 2014 and 22.7 million tons by 2016, which is will be around 26% more than the current production levels. Recently, a representative of the Asian Development Bank (ADB) had said that growing population, lack of agriculture lands and high input costs make Philippines’ rice-sufficiency targets impossible to reach in this lifetime. Significantly, while the Philippines Agriculture Secretary says that the country may at most import around 100,000 tons of rice in 2013 to maintain buffer stocks, the FAO says that the country will import
around 800,000 tons of rice in 2013, while the USDA says that total rice imports (including contraband imports) may reach up to 1.5 million tons in MY2012-13 (May to April).
Oryza Afternoon Recap – Chicago Rough Rice Futures Log Second Consecutive Day of Double Digit Gains Despite Continued Drop in Crude By Oryza News on November 28,2012
Chicago rough rice futures for January delivery settled 10.5 cents per cwt (about $2 per ton) higher at $15.190 per cwt (about $335 per ton). After starting the day on a negative note, rough rice futures were able to maintain their upward momentum and finish the day with solid gains. After dipping to a multi-month low in midNovember the bulls have returned and there appears to be little selling interest in the way to stop prices from continuing higher. The current move may be accelerated if specs decide to abandon losing short positions and head for the exit. Although the other grains also finished mostly higher, their gains were limited as a continued dip in crude prices weigh on the complex. Soybeans traded down about 0.2% at $14.4625 per bushel; wheat traded up about 0.3% at $8.7600 per bushel; and corn finished the day marginally higher at $7.6025 per bushel. U.S. stocks held their gains across the board Wednesday, with the S&P 500 trading above 1,400, after U.S. President Obama addressed the ongoing “fiscal cliff” issue and following some positive comments from Speaker John Boehner. The Dow Jones Industrial Average rallied, erasing its earlier triple-digit loss. The S&P 500 and the Nasdaq also turned higher. U.S. stock markets are trading up about 0.5%, gold is trading down about 1.4%, crude oil is currently trading down about 0.8%, and the U.S. dollar is trading about 0.1% lower at about 2:00pm Chicago time. Looking to the daily continuation chart of Chicago rough rice futures for January delivery, the market has continued its recent rally and added another double digit as trade activity continues to pick up. Today’s move confirms yesterday’s breaking of resistance provided by the 20-day moving average and places the market firmly in bullish territory. Nearby resistance is seen around $15.280 per cwt (about $337 per ton) provided by the 1st level pivot point, while the first point of support is provided by the 38% retracement of the 4-week high at $15.144 per cwt (about $334 per ton). Although the short-term trend has turned bullish, the slower moving 100 and 200-day moving averages have recently converged and currently indicate a longer-term sideways trend and indicate that prices may simply be moving within a wider trading range. Today’s trading range is
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noted as $14.945-$15.200 per cwt (about $329-$335 per ton) marking another day of consecutive higher highs. Tuesday, there were 917 contracts traded, up from 617 contracts traded on Monday. Open interest – the number of contracts outstanding – on Tuesday fell by 78 contracts to 14,373.
Oryza Overnight Recap – Chicago Rough Rice Futures Break below $15.000 per cwt; Negative Macros Weigh on U.S. Grains By Oryza News on November 28,2012
Chicago rough rice futures for January delivery were trading 5.5 cents per cwt (about $1 per ton) lower at $15.030 per cwt (about $331 per ton) as of 9:00am Chicago time. Rough rice futures have come under pressure this morning as all of the grains are being weighed down by the looming U.S. “fiscal cliff”which is sending investors towards the exit as they shed unnecessary risk. As of this writing the grain complex is
trading lower: soybeans are trading down about 0.4%, wheat is trading down about 0.8%, and corn is trading down about 0.6%.
Looking to the intraday 15-minute chart for rough rice futures for January delivery, after a last minute rally that sent prices firmly higher yesterday afternoon the market was fairly subdued overnight. It has been only within the last hour that trade activity has picked up and bears made their presence felt once again, pushing prices below the key $15.000 per cwt (about $331 per ton) level. A sudden uptick in selling interest saw prices fall to as low as $14.945 per cwt (about $329 per ton) but quickly recovered as opportunistic buyers snapped up futures at attractive prices and returned the market above $15.000 per cwt (about $331 per ton). As of this writing the current session trading range is noted as $14.945-$15.065 per cwt (about $329-$332 per ton) and total volume traded is listed as 153 contracts. U.S. stocks extended their losses Wednesday, with the Dow falling more than 100 points, following a weaker-than-expected new home sales report and amid ongoing worries over the looming “fiscal cliff.” The Dow Jones Industrial Average dropped, after finishing lower in the previous session. The S&P 500 and the Nasdaq also tumbled. U.S. stocks are currently trading about 0.5% lower, gold is currently trading down about 1.9%, crude oil is trading down about 2%, and the U.S. dollar is currently trading about 0.2% higher at about 9:00am Chicago time.
Thailand 2012 Fragrant Rice Exports to Meet Government Target of 2 Million Tons; Total Exports in January to November Cross 6.2 Million By news desk on November 28,2012
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Thailand’s exports of fragrant Hommali rice are expected to reach the targeted 2 million tons in 2012. Exports of Hommali rice from January to October 2012 stood at around 1.6 million tons, according to the President of Thailand Trade Representatives. He also revealed that the government is targeting 2.4 million tons of Hommali rice exports in 2013, up around 20% from the previous year. According to the official data, Thailand’s rice exports (excluding Hommali rice and export through the border) from the beginning of the year to November 27, 2012, have reached over 4.6 million tons. This suggests total rice exports so far this year stand at over 6.2 million tons, down almost 21% from around 7.9 million tons exported during the same period last year.
Vietnam Rice Sellers Lower Some of Their Quotes; Thailand, India, Pakistan Rice Sellers Keep Indications on Hold By news desk on November 28,2012
Vietnam rice sellers lowered their quotes for 25% broken rice by around $5 per ton to around $395 - $405 per ton today. Thailand, India and Pakistan rice sellers kept their quotes mostly unchanged. Thai 5% rice is quoted around $545 - $555 per ton, about a $120 per ton premium over Viet 5% rice shown around $425 - $435 per ton. Indian 5% rice is quoted around $425 - $435 per ton, about a $5 per ton discount over Pak 5% rice shown around $430 - $440 per ton. Thai 25% rice is quoted about $530 - $540 per ton, about a $135 per ton premium over Viet 25% rice indicated around $395 - $405 per ton, down about $5 per ton from yesterday. Indian 25% rice is quoted about $375 - $385 per ton, about a $10 per ton premium over Pak 25% rice shown around $365 - $375 per ton. Thai parboiled rice is quoted around $565 - $575 per ton. Indian parboiled rice is quoted around $415 $425 per ton, about a $40 per ton discount to Pak parboiled rice shown around $455 - $465 per ton. Thai broken rice, A1 Super, is quoted about $495 - $505 per ton, about a $135 per ton premium over Viet broken rice shown around $360 - $370 per ton. Indian broken sortexed rice is quoted about $335 - $345 per ton, on par with Pak broken sortexed rice indicated around $335- $345 per ton.
Oryza Rice Recap – Rice Quotes Flat as Buyers and Sellers Duel; India Food Supply Chain May See Major Changes; Global Markets Dogged By Liquidity, Solvency, Transparency Concerns By Oryza News on November 28,2012
Rice supplies are generally tight, excluding the massive tons of rice stored by India and Thailand, neither of which are likely to be liquidating these stocks very quickly anytime soon. That leaves some available pressure for prices to rise, if buyers are willing, which they so far don’t seem very keen about. Buyers generally appear comfortable to keep their inventories slim and their bids very competitive, thus the mostly flat indications in recent weeks. In the U.S., companies relying on Mississippi River traffic – such as those companies shipping rice downriver for export- are pushing for the U.S. Corp of Engineers to blast rock from the bottom of the river in Southern Illinois while also asking that season water declines from the Missouri River be reversed. They are also lobbying the government to avoid “an economic catastrophe in the heartland of the United States,” according to the Wall Street Journal. Stoppages are expected to create a bottleneck of traffic between St Louis, Missouri and Cairo, Illinois by mid-December. Transportation delays and rising costs may put downward pressure on U.S. rice bid by exporters who say buyers continue to only buy 8 Rice Plus Magazine www.ricepluss.com News and R&D Section mujajhid.riceplus@gmail.com Cell # 92 321 369 2874
hand-to-mouth and are reluctant to pay up. On the other hand South American rice supplies remain tight and acreage in the coming year may suffer as farmers switch to other crops like soy and corn. While buyers in Central and South America remain reluctant, they may be forced to eventually raise their bids. In Asia, India’s federal government has indicated for the first time that it may be open to allowing foreign companies to run supermarkets in the country, according to the Wall Street Journal. This could transform supply chains for commodities including rice. Right now, the Indian government buys about one third of the nation’s rice crop for storage and dispersal via its Public Distribution System, a system lauded for its success in avoiding the mass famines of previous decades while also criticized as being wasteful as many of India’s poor remain malnourished, some grain is lost due to ineffective/insufficient storage, and farming losses and farmer suicides. Allowing a more commercial process to take hold has the potential to streamline logistics from the farm to the plate, possibly delivering cheaper rice to the consumer without reducing farm incomes, instead squeezing out production and logistical inefficiencies from the middlemen operators that are providing questionable amounts of value. Bloomberg reports that Bonds for global commodity trading house Olam International Ltd. Have tumbled to 85 cents on the dollar, a level considered “distressed” after research firm Muddy Water LLC likened the trading firm to Enron, saying it’s likely to fail due to excessive debt and illiquid assets (mostly inventory). Olam has called the allegations “false and misleading.” Global financial markets are also being unsettled on increasing regulatory inquires about insider trading – by investors and company executive alike – as well as the potential ticking time bomb of the shadow banking sector used to describe non-banking financial activities where money is being borrowed in the short-term and lent out of the long-term, leaving an organization vulnerable to collapse if its short-term funding dries up. If this weren’t all enough, bankers questioned about manipulating the Libor borrowing rate – a major international benchmark for lending costs and the health of the financial sector as a whole – are failing to provide regulators with answers; regulators say dozens of banks including Deutsche Bank, Barclays, UBS AG, and Royal Bank of Scotland were colluding to rig Libor, hiding the banks’ true borrowing costs.
Oryza Overnight Recap – Chicago Rough Rice Futures Break below $15.000 per cwt; Negative Macros Weigh on U.S. Grains By Oryza News on November 28,2012
Chicago rough rice futures for January delivery were trading 5.5 cents per cwt (about $1 per ton) lower at $15.030 per cwt (about $331 per ton) as of 9:00am Chicago time. Rough rice futures have come under pressure this morning as all of the grains are being weighed down by the looming U.S. “fiscal cliff”which is sending investors towards the exit as they shed unnecessary risk. As of this writing the grain complex is trading lower: soybeans are trading down about 0.4%, wheat is trading down about 0.8%, and corn is trading down about 0.6%.
Looking to the intraday 15-minute chart for rough rice futures for January delivery, after a last minute rally that sent prices firmly higher yesterday afternoon the market was fairly subdued overnight. It has been only within the last hour that trade activity has picked up and bears made their presence felt once again, pushing prices below the key $15.000 per cwt (about $331 per ton) level. A sudden uptick in selling interest saw prices fall to as low as $14.945 per cwt (about $329 per ton) but quickly recovered as opportunistic buyers snapped up futures at attractive prices and returned the market above $15.000 per cwt (about $331 per ton). As of this writing the current session trading range is noted as $14.945-$15.065 per cwt (about $329-$332 per ton) and total volume traded is listed as 153 contracts. 9 Rice Plus Magazine www.ricepluss.com News and R&D Section mujajhid.riceplus@gmail.com Cell # 92 321 369 2874
U.S. stocks extended their losses Wednesday, with the Dow falling more than 100 points, following a weaker-than-expected new home sales report and amid ongoing worries over the looming “fiscal cliff.� The Dow Jones Industrial Average dropped, after finishing lower in the previous session. The S&P 500 and the Nasdaq also tumbled. U.S. stocks are currently trading about 0.5% lower, gold is currently trading down about 1.9%, crude oil is trading down about 2%, and the U.S. dollar is currently trading about 0.2% higher at about 9:00am Chicago time.
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