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Daily December 12, 2014
Exclusive ORYZA E-Newsletter
DAILYCompiled EXCLUSIVE ORYZA E-NEWSLETTER & Edited by Riceplus Magazine
December 12, 2014 Vol 4 Issue XII
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December 12, 2014
DAILY EXCLUSIVE ORYZA E-NEWSLETTER News Headlines…
EU Imports 65,280 Tons of Rice from LDCs in First Three Months of 2014-15, Up 5% from Last Year Domestic Asian Rice Prices Decline in November 2014 Amid Increased Supplies India Rice Stocks in Central Pool Stand at 21.57 Million Tons as of December 1, 2014; Down 23% from Last Year Asia Rice Quotes Unchanged Today Conab Estimates Brazil 2014-15 Paddy Rice Production at 12.21 Million Tons, Slightly Up from Last Year Oryza Overnight Recap - Chicago Rough Rice Futures Trade Lower as Sliding Crude Continues to Weigh on Market Oryza Afternoon Recap - Chicago Rough Rice Futures Slide despite Strong Export Sales and Gains in Neighboring Grain Pits Thailand Exports 8.77 Million Tons of Rice in First Ten Months of 2014; Up 62% from Last Year Global Rice Quotes Oryza U.S. Rough Rice Recap - Prices Hold despite Weaker Futures Market; Weekly Export Shipments Hit Marketing Year High USDA Forecasts U.S. MY 2014-15 All Rice Exports at 4.67 Million Tons, Up 10% from Last Year Worst Case Scenario - We Won’t Be Able To Harvest Rice At All by 2015 Pakistan Government Needs to Enhance Investment in Research to Meet Current Rice Sector Challenges, Says BGA President
News Detail… U Imports 65,280 Tons of Rice from LDCs in First Three Months of 2014-15, Up 5% from Last Year Dec 11, 2014
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December 12, 2014
DAILY EXCLUSIVE ORYZA E-NEWSLETTER The European Union's (EU) rice imports including milled and semi-milled, from the Least Developed Countries (LDCs) of Asia such as Cambodia, Laos and Myanmar under the Everything But Arms (EBA) Agreement have increased about 5% to around 65,280 from around 62,253 tons imported during the same period last year, according to data from the Ente Nazionale Risi, the National Agency for Rice.
Under the EBA clause, the EU imports rice from the LDCs at zero-percent duty. It was basically aimed to raise incomes and living standards of farmers in the LDCs. Rice imports (milled equivalent) from EBA countries mostly Cambodia and Myanmar) increased about forty times to around 402,000 tons in MY 2013-14 from just 10,000 tons in MY 2008-09, according to the new Chairman of Copa-Cogeca. Italy, the main rice producer, has been expressing its concern that the competitiveness of Italian rice has been declining significantly due to an increase in imports from EBA countries. The Italian government and the Ente Nazionale Risi (National Agency for Rice) have been urging the EU to adopt a safeguard clause to curtail imports from EBA countries. They also submitted their intention to the EU. Recently, the new Chairman of Copa-Cogeca (The united voice of farmers and their co-operatives in the European Union) Rice Working Party has also stressed the need for the adoption of a safeguard clause. The Italian Minister of Agriculture and the National Agency for Rice have jointly prepared a new dossier highlighting the negative aspects of increasing rice imports from the EBA countries. The Italian Agriculture Undersecretary noted that zero-duty imports from the EBA countries had started in 2001 as a unilateral plan of the EU to support EBA countries, but it cannot be continued considering the disadvantages to local rice sector. Meanwhile, the President of Myanmar visited the Paddy Seed Research Center (PSRC) of the Italian National Agency for Rice on October 17 and took a glance at different types of rice produced in Italy as well as latest technologies used. The Italian rice sector was reportedly surprised with the development in the light of it trying to curb imports from EBA countries, including Myanmar. Tags: EU rice imports from EBA countries, Everything but Arms Agreement, Italy's National Agency for rice
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DAILY EXCLUSIVE ORYZA E-NEWSLETTER
Domestic Asian Rice Prices Decline in November 2014 Amid Increased Supplies Dec 11, 2014
Domestic rice prices in all the Asian rice exporting countries, including India, Thailand, Vietnam and Myanmar, declined in November 2014 due to increased supplies from ongoing harvests and Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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low export demand, according to the UN's Food and Agriculture Organization (FAO). Rice prices declined in the Philippines declined for third consecutive month in anticipation of higher output from ongoing harvests. Prices remained stable in other Asian countries. Prices in Sri Lanka took a downward path after increasing for the last few months due to drought-reduced production. The government's action to reduce the subsidized prices of imported rice sold through its distribution centers and its decision to import 50,000 tons of rice from Bangladesh supported prices from falling. However, prices in Indonesia remained stable despite ongoing harvests. A sharp increase of more than 30% in fuel prices (gasoline and diesel), in mid-November, following the reduction of Government subsidies, supported rice prices from falling. Prices in China also remained stable despite increased supplies from ongoing harvests and imports. Prices were supported by high minimum support prices and the recent reinforcement of import controls. Prices in Bangladesh remained stable as the downward pressure from ongoing harvest was offset by the government Aman procurement program. Prices in Pakistan remained stable in November reflecting good harvests. In Africa, local rice prices in Ebola-affected countries such as Guinea, Liberia and Sierra Leone declined or remained stable in November 2014 due to the ongoing harvests. Imported rice prices remained stable in Liberia and Guinea, but increased in Sierra Leone. Domestic rice prices in Madagascar increased in November due to declining supplies before the first minor harvest in January 2015. Rice export prices in general declined in November 2014 for third consecutive month due to increased supplies from arrival of newly harvested crops, strong competition between markets, including Thailand, India, Vietnam and Pakistan, as well as subdued export demand. Tags: Asia rice prices, Thai domestic rice prices, India domestic rice prices, Vietnam domestic rice prices, Pakistan domestic rice prices, Rice export prices
India Rice Stocks in Central Pool Stand at 21.57 Million Tons as of December 1, 2014; Down 23% from Last Year Dec 11, 2014
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India’s rice stocks in the central pool as of December 1, 2014 stood at around 21.57 million tons (including a milled equivalent of about 16.89 million tons of paddy), down about 23% from around 28.19 million tons recorded during the same time last year, according to data from the Food Corporation of India (FCI). Month-over-month, India's rice stocks in the central pool are down by about 6% from around 22.93 million tons recorded on November 1, 2014. However, current rice stocks are about 45% more than the required buffer and strategic reserve norms of around 11.8 million tons for this Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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time of the year, according to the FCI.Total food grain stocks (including rice and wheat) in the central pool stand at around 49.381 million tons as of December 1, 2014, down about 17% from last year's stock of around 59.29 million tons and down about 8% from last month's stock of around 53.565 million tons. Wheat stocks stand at around 27.569 million tons, down about 11% from last year's stock of around 31.067 million tons and down about 9% from last month's stock of around 30.132 million tons. Tags: India rice stocks, Food Corporation of India (FCI)
Asia Rice Quotes Unchanged Today Dec 11, 2014
Asia rice sellers kept their quotes mostly unchanged today. 5% Broken Rice Thailand 5% rice is quoted at around $400 - $410 per ton, about $15 per ton premium on Vietnam 5% rice shown at around $385 - $395 per ton. India 5% rice is quoted at around $395 $405 per ton, about $25 per ton premium on Pakistan 5% rice quoted at around $370 - $380 per ton. 25% Broken Rice Thailand 25% rice was last quoted at around $350 - $360 per ton, on par with Vietnam 25% rice shown at around $350 - $360 per ton. India 25% rice is quoted at around $360 - $370, about $30 per ton premium on Pakistan 25% rice quoted at around $330 - $340 per ton. Parboiled Rice Thailand parboiled rice is quoted at around $400 - $410 per ton. India parboiled rice is quoted at around $380 - $390 per ton, about $30 per ton discount to Pakistan parboiled rice quoted at around $410 - $420 per ton. 100% Broken Rice Thailand broken rice, A1 Super, is quoted at around $330 - $340 per ton, on par with Vietnam 100% broken rice shown at around $330 - $340 per ton. India's 100% broken rice is shown at around $300 - $310 per ton, about $10 per ton premium on Pakistan broken sortexed rice quoted at around $290 - $300 per ton. Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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Tags: Vietnam rice prices, India rice prices, pakistan rice prices, Thailand rice prices
Conab Estimates Brazil 2014-15 Paddy Rice Production at 12.21 Million Tons, Slightly Up from Last Year Dec 11, 2014
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Brazil’s National Grains Supply Company (Conab) has forecasted the country's 2014-15 paddy rice production at around 12.21 million tons, slightly up from around 12.12 million tons in 201314. Conab lowered its projections for Brazil 2014-15 paddy rice production by about 2.3% from its last month's projection of around 12.51 million tons. Conab has estimated Brazil's 2014-15 paddy rice acreage at around 2.359 million hectares, slightly down from around 2.373 million hectares in 2013-14 and slightly down from its previous month's projection of around 2.372 million hectares. Paddy rice acreage in the key rice growing Centro-Sul (Center-South) region is projected at 1.557 million hectares in 2014-15, slightly down from around 1.565 million hectares in 2013-14. Rice acreage in the North/Northeast regions is estimated at around 802,600 hectares, slightly down from around 808,400 hectares in 2013-14. Average rice yield in Brazil in 2014-15 is projected at around 5.174 tons per hectare, up about 1% from around 5.108 tons per hectare recorded in the previous year, and down about 2% from its last month's projection of around 5.271 tons per hectare. USDA estimates Brazil MY 2014-15 (April – March) paddy rice production at around 12.28 million tons (around 8.35 million tons, basis milled), slightly up from an estimated 12.2 million tons (around 8.3 million tons, basis milled) in MY 2013-14. It estimates Brazil’s 2014-15 paddy rice acreage at around 2.45 million tons, up about 2% from an estimated 2.4 million hectares in MY 2013-14. USDA estimates Brazil to export around 900,000 tons of rice and import around 700,000 tons of rice in 2014. Tags: Brazil paddy rice production, Conab, Brazil paddy rice acreage, Brazil paddy yield
Oryza Overnight Recap - Chicago Rough Rice Futures Trade Lower as Sliding Crude Continues to Weigh on Market Dec 11, 2014
Chicago rough rice futures for Jan delivery were trading 11 cents per cwt (about $2 per ton) lower at $12.150 per cwt (about $270 per ton) during early floor trading in Chicago. The other grains are seen mostly higher: soybeans are currently seen 0.3% higher, wheat is listed about 1% lower and corn is noted about 0.8% higher. U.S. stocks rose on Thursday after the prior day's drubbing, as investors embraced data that had retail sales climbing in November and jobless claims falling last week. Figures from the Commerce Department had retail sales rising 0.7% last month, the largest increase in eight Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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months. Separately, the Labor Department reported fewer Americans filed unemployment claims last week. Speaking at a conference in New York, Treasury Secretary Jack Lew called lower energy costs an unquestioned positive for the U.S. economy. The Dow Jones Industrial Average rose 122.05 points, or 0.7%, to 17,655.17. The S&P 500 added 12.92 points, or 0.4%, to 2,039.06, with energy the best performing of its 10 major industry groups, all of which advanced. The Nasdaq gained 31.84 points, or 0.7%, to 4,715.86. Gold is currently trading about 0.9% lower, crude oil is seen trading about 0.1% lower, and the U.S. dollar is currently trading about 0.5% higher at 8:10am Chicago time. Tags: chicago rough rice futures, U.S. rice market, U.S. rice prices
Oryza Afternoon Recap - Chicago Rough Rice Futures Slide despite Strong Export Sales and Gains in Neighboring Grain Pits Dec 11, 2014
Chicago rough rice futures for Jan delivery settled 17.5 cents per cwt (about $4 per ton) lower at $12.085 per cwt (about $266 per ton). Rough rice futures continued to slip today, shedding nearly 20 cents per cwt (about $4 per ton) by the ringing of the closing bell but managing to finish 5 cents per cwt (about $1 per ton) above the session low of $12.030 per cwt (about $265 per ton). Today’s move has returned the market to a position below the 20-day moving average and along with yesterday’s loss has nearly eclipsed the gains earned on Tuesday and has once again has returned the market to its bearish trading pattern. It is likely that the market will continue lower and probably test psychological support at $12.000 per cwt (about $265 per ton) and possibly lower. The other grains traded higher today; Soybeans closed about 1% higher at $10.4225 per bushel; wheat finished about 2.7% higher at $5.9750 per bushel, and corn finished the day about 1.2% higher at $3.9850 per bushel.U.S. stocks surged on Thursday, cutting weekly losses, as investors embraced data that had retail sales climbing in November and jobless claims falling last week. Figures from the Commerce Department had retail sales rising 0.7% last month, the largest increase in eight months. Separately, the Labor Department reported fewer Americans filed unemployment claims last week. After a 220-point jump, the Dow Jones Industrial Average was lately up 154.25 points, or 0.9%, at 17,687.40. The S&P 500 added 20.53 points, or 1%, to 2,046.67, with consumer discretionary the best performing of its 10 major industry groups, all of which advanced. The Nasdaq gained 57.28 points, or 1.2%, to 4,741.23. Gold is trading about 0.1% lower, crude oil is seen trading about 1.8% lower, and the U.S. dollar is seen trading about 0.5% higher at about 1:00pm Chicago time.Wednesday, there were 360 contracts traded, down from 1,085 Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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DAILY EXCLUSIVE ORYZA E-NEWSLETTER
contracts traded on Tuesday. Open interest – the number of contracts outstanding – on Wednesday increased by 69 contracts to 10,235.
Tags: chicago rough rice futures, U.S. rice prices, U.S. rice market
Thailand Exports 8.77 Million Tons of Rice in First Ten Months of 2014; Up 62% from Last Year Dec 11, 2014
Thailand has exported around 8.77 million tons of rice in the first ten months (January - October) of 2014, up about 62% from around 5.4 million tons exported during the same period in 2013, according to data from Thai Rice Exporters Association (TREA). In value terms, Thailand’s rice exports earned about $4.31 billion from total rice exports in January - October 2014, up about 18% from around $3.64 billion earned during the same period in 2013. In October 2014, Thailand exported around 1.214 million tons of rice, up about 26% from Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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around 960,042 tons exported in September 2014; and up about 59% from around 762,196 tons exported in October 2013. Of the total October sales, white rice accounted for around 437,180 tons (about 36% of total October exports), Hom Mali rice accounted for about 107,072 tons (about 9% of total October exports), brokens accounted for 163,632 tons (about 13% of total October exports), glutinous variety accounted for 13,395 tons (about 1% of total October exports), parboiled rice accounted for about 487,945 tons (about 40% of total October exports) and husked/brown rice accounted for about 4,900 tons (about 0.4% of total October exports). Thailand's October 2014 exports earned around $580.12 million, up about 27% from around $457.49 million earned in September 2014; and up about 31% from around $442.6 million earned in October 2013. In October 2014, average export prices of white, Hom Mali, brokens, parboiled and husked rice varieties increased, while prices of glutinous rice declined over those in September 2014. Average export prices of husked rice witnessed the highest increase of about 39% during the month. Tags: Thai rice exports, White rice exports, Broken rice exports, Parboiled rice exports, Hom Mail rice exports, Husked rice exports, Thai Rice Exporters Association (TREA)
Global Rice Quotes December 11th, 2014 Long grain white rice - high quality Thailand 100% B grade 415-425 Vietnam 5% broken 385-395 ↔ India 5% broken 395-405 ↔ Pakistan 5% broken 370-380 ↔ Cambodia 5% broken 460-470 ↔ U.S. 4% broken 540-550 ↔ Uruguay 5% broken 595-605 ↔ Argentina 5% broken 595-605 ↔ Long grain white rice - low quality Thailand 25% broken NQ ↔ Vietnam 25% broken 350-360 ↔ Pakistan 25% broken 330-340 ↔ Cambodia 25% broken 435-445 India 25% broken 360-370 ↔ U.S. 15% broken 515-525 ↔ Long grain parboiled rice Thailand parboiled 100% stxd Pakistan parboiled 5% broken stxd India parboiled 5% broken stxd
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400-410 410-420 380-390
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U.S. parboiled 4% broken 580-590 Brazil parboiled 5% broken 570-580 Uruguay parboiled 5% broken NQ Long grain fragrant rice Thailand Hommali 92% 915-925 Vietnam Jasmine 525-535 ↔ India basmati 2% broken NQ ↔ Pakistan basmati 2% broken NQ ↔ Cambodia Phka Malis 820-830 Brokens Thailand A1 Super 330-340 ↔ Vietnam 100% broken 330-340 Pakistan 100% broken stxd 290-300 Cambodia A1 Super 385-395 ↔ India 100% Broken stxd 300-310 Egypt medium grain brokens NQ ↔ U.S. pet food 445-455 ↔ Brazil half grain NQ ↔
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All prices USD per ton, FOB vessel, oryza.com
Oryza U.S. Rough Rice Recap - Prices Hold despite Weaker Futures Market; Weekly Export Shipments Hit Marketing Year High Dec 11, 2014
The U.S. cash market was mostly unchanged today despite weakness in the futures market.Analysts insist that most farmers will not sell at levels that could possibly trade as they would rather wait to see if prices improve after the first of the year while buyer interest remains limited at best as most are still hand to mouth as it has paid them well to do so this marketing year.In the meantime, the USDA reported that cumulative net export sales for the week ending on December 4th, totaled 86,600 tons for 2014/2015.Increases reported for the following destinations including: 29,300 tons to Haiti, 28,800 tons to Libya, 13,000 tons to Japan, 12,000 tons to Honduras, including 8,000 tons switched from unknown destinations, and 5,000 tons to Guatemala. Decreases of 8,000 ton were reported for unknown destinations.U.S. rice exporters shipped 110,300 tons, a marketing year high, which was 71% higher than last week and 43% higher than the prior 4-week average. The primary destinations included: 28,800 tons to Libya, 23,800 tons to Haiti, 21,600 tons to Japan, 13,300 tons to Colombia, and 8,500 tons to Honduras.
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Tags: U.S. rice prices, U.S. rice market
USDA Forecasts U.S. MY 2014-15 All Rice Exports at 4.67 Million Tons, Up 10% from Last Year Dec 11, 2014
In its December World Agricultural Supply and Demand Estimates (WASDE) report, the USDA has forecasted U.S. MY 2014-15 all rice exports at around 4.67 million tons, up about 10% from an estimated 4.24 million tons last year, and slightly up from its last month's forecast of around 4.63 million tons.The increase is attributed to about 9% y/y increase in the U.S. longgrain rice exports to around 3.13 million tons. USDA increased estimates for U.S. long-grain rice exports by about 1.6% from last month's forecasts of around 3.08 million tons due to an expected increase in demand from the Middle East and South America. USDA increased estimates for MY 2014-15 (rough equivalent) milled rice exports by about 1.3% from last month's 3.04 million tons and kept estimations for rough rice exports at last month's level of 1.59 million tons. It estimates rough rice exports and milled rice exports to increase about 19% and 6% y/y respectively.It however, kept the estimates of medium and short grain rice exports unchanged from last month. They are estimated to increase about 12% y/y to around 1.54 million tons in MY 2014-15.USDA lowered estimates for U.S. MY 2014-15 all rice ending stocks by about 3% to around 1.81 million tons from its last month's estimates of around 1.86 million tons. It estimates U.S. all rice ending stocks to increase about 21% y/y in MY 2014-15.USDA lowered estimates for U.S. MY 2014-15 long-grain ending stocks by about 4% to around 1.22 million tons from last month's estimate of around 1.27 million tons. It estimates U.S. long-grain rice ending stocks to increase about 39% y/y in MY 2014-15.The U.S. agency kept the estimates of medium and short grain rice ending stocks unchanged from last month. They are estimated to decline about 6% y/y to around 480,000 tons in MY 2014-15.USDA estimates U.S. all rice farm Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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prices at around $308.64 - $330.69 per ton, down from last month's estimates of around $313.05 - $335.10. It also lowered estimates for long-grain and combined medium and short-grain rice farm prices to around $264.55 - $286.60 per ton and around $407.85 – $429.90 respectively due to unexpected substantial decline in October prices according to data from the National Agricultural Statistics Service. Tags: USDA WASDE, U.S. All rice exports, U.S. All rice ending stocks, Long-grain rice exports, Medium and short grain exports, Rough rice exports, Milled (rough equiv) rice exports
Worst Case Scenario - We Won’t Be Able To Harvest Rice At All by 2015 Dec 11, 2014
Pia Ranada, a journalist who travels globally and specializes on impact of climate change on agriculture, especially rice, talks about worse case scenarios that could happen if the climate conditions worsen. Oryza: We've all heard of climate change and how it will affect agriculture. How bad will the scenario be, for a crop like rice, say in 2025, if we continue to ignore warning signs of nature and keep assaulting nature? Pia: Worst case scenario is that we won’t be able to harvest rice at all during certain months because of severe drought. Rice is dependent on water and sensitive to temperature change. In the Philippines, every 1 degrees C rise in night temperature could lead to a 10% decrease in rice yield. At the very least, we can expect rice to become very expensive. Oryza: You have quoted the probable impact on Philippines. What about the world scenario, from your experience of covering agriculture beat extensively? The IPCC 5th Assessment Report states that climate-related declines in food productivity will impact on livelihoods and exports, increasing poverty levels. For instance, in Bangladesh, these factors would cause a net increase in poverty of 15% by 2030. The report sums up the wide-ranging impact across the world. Oryza: Currently, where is flood-tolerant rice varieties such as IRRI 156 or NSIC Rc238 (known to farmers as Tubigan 21), IRRI 154 or NSIC Rc222 (Tubigan 18) and IRRI 168 or NSIC Rc302 (Tubigan 25) available to third world countries such as India and how accessible is it? Pia: Yes, anyone can request for free seeds from the International Rice Research Institute Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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(IRRI). I know it's being used in other countries already. Oryza: Again, the drought-tolerant Sahod Ulan varieties developed by IRRI. Can we look forward to the entire world having access to this variety and growing this. If yes, how soon? Pia: It's already available and accessible for all. They need to contact IRRI for that and they can get it. Oryza: You have mentioned that the saline-tolerant climate-smart rice varieties are already available in the market. But it has been estimated that only around 10% of Filipino farmers are using them. Any specific reason why its usage is still minimal. Or is it just a matter of time before it is used extensively? Pia: It is simply lack of awareness. Also suspicion that it might ruin their rice fields or that it's not effective. Oryza: Those in the Philippines can call a certain number and get the deliveries. Does PhilRice have any plans to distribute it to other countries? Pia: Those who want seeds can contact IRRI on +63 2 845 0563 Oryza: As someone who has been reporting on agriculture, what do you think is the varieties of rice one can expect in 2015? Pia: IRRI scientists are working on varieties of rice that have all the climate-resilient traits (flood tolerance, saline tolerance, drought tolerance). I believe they are also working on a heat-tolerant variety. But the most ambitious project of IRRI's is its ‘C4 project’ which will make rice photosynthesize like corn. This could increase its yield by 50% and lessen its dependence on fertilizer and water. Well the next 'miracle' rice could be grown in the Philippines. Tags: Rice, rice news, Philippines, Pia Ranada, Climate change, impact
Pakistan Government Needs to Enhance Investment in Research to Meet Current Rice Sector Challenges, Says BGA President Dec 11, 2014
In an exclusive interview with Oryza, Mr.Hamid Malhi, President of Pakistan Basmati Growers Association (BGA) has discussed a number of issues plaguing the rice sector, especially the farmer community, in Pakistan. His suggestions to the government, if implemented, are expected to not only raise incomes of Pakistan rice farmers as well as increase its competitiveness globally. Excerpts from the interview....
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Oryza: As a farmers' representative, what government policies do you think are in the best interests of farmers? Hamid Malhi: The government has recently taken some bold steps in favour of the farmer, e.g. compensation for flood losses, compensation for basmati price decline, assuring support price of sugar cane. Whatever the reason, this trend towards agriculture is a change from the regular, and is seen as a good omen by the agriculture community, although a lot more needs to be done. Oryza: Do you think the recent policy by the government to provide Rs.10 billion (around $98.3 million) to small scale rice farmers with around 10 hectares of rice land will yield desired results? Hamid Malhi: Although it is insufficient as compared to the loss, which is more than 6 times this amount, nevertheless it shows government commitment to assist the farmer when he is in trouble. Oryza: Do you think the package is adequate for small scale basmati farmers? Else, what do you think should be the subsidy package amount? Hamid Malhi: Farmers do not favour subsidies; rather a long term policy of reduced costs of inputs through removal of GST on inputs and machinery would be more sustainable. Oryza: What measures is the government taking to ensure all the basmati farmers are covered under this scheme and the funds are not misused? Hamid Malhi: Corruption takes its toll everywhere, but the policy is a good gesture towards the basmati farmers who are losing huge incomes. Computerization of revenue record could minimise leakages. Oryza: Pakistan basmati export rice prices in general have been increasing over the last year. How long do you think will this trend continue? What factors do you think may lead to a decline in basmati rice export prices in the long run? Hamid Malhi: There is little hope that in light of the fallen domestic prices this trend in rising export prices would be sustainable. The most important factor is the cartelisation of the rice exporters who decided to give farmers half of last year’s basmati paddy price. There seems to be no justification for this and the farmer was forced to pay for the inefficiencies of others. Oryza: Farmers Associations have been demanding the government to set up a Minimum Export Price (MEP) for basmati rice, but the government has so far not reacted to their Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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demands. What are your comments? How much MEP do you think would benefit the farmers? Hamid Malhi: The government has its own procedures to follow in evolving a policy, but if the farmers view point prevails this would be a viable solution to stem the unprecedented decline in paddy and rice prices both domestic and international. An MEP of $1,150 per ton would be fair in light of last year’s average price of exports. Oryza: You earlier said millers and exporters are benefiting at the cost of farmers. Do you see any need to bring significant changes in the rice value chain and encourage farmers to directly involve in marketing of their produce? What measures are needed to inculcate awareness in them? Hamid Malhi: This is the only way out. Assisting the farmer in holding his produce and developing his capacity to resist immediate sales at harvest and also value addition would put him on solid ground in future to defend himself against cartels and unjustified profiteering. Seeing is believing. Farmers have to be hand held into these steps. Oryza: What are the main factors that have led to a decline in local paddy rice prices in the recent time? What measures do you think will push up paddy prices? Hamid Malhi: The decline in basmati exports in the last 3 years is due to increased production. The government should have been sensitive of these issues and prepared to handle any situation. The government was caught off guard this year and it led to this debacle. Announcing a support price with an intervention mechanism 2-3 months prior to harvest along with an MEP on exports could have easily stabilised paddy price. Officials concerned are ill prepared to take these decisions without political will of the government. Oryza: Also, Pakistan rice exporters have been opposing rice procurement by the government. What are your comments? Is their argument right from the farmers' perspective? Hamid Malhi: Why would they (exporters) support farmer friendly policies? There is a clear clash of interests. Their crocodile tears are no relief to the farmer while they are laughing their way to the bank. Exporting at above $1,400 per ton and buying at below $1,000 per ton. They have never made such a kill. All this is happening in broad day light with no remedy for the farmer and nobody has come to his rescue. Oryza: What was the impact of recent floods on the basmati rice acreage in Pakistan? Do you see any impact on production and exports as well? Hamid Malhi: There was an increase in sowing of basmati this year and the flood losses have Riceplus Magazine wwww.ricepluss.com mujahid.riceplus@gmail.com Cell: +92 321 369 2874 28
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December 12, 2014
DAILY EXCLUSIVE ORYZA E-NEWSLETTER
been covered. There is ample basmati rice for exports. Around half a million ton of last year’s stocks are also available for exports plus the current crop. Oryza: What kind of research is going on with respect to newer basmati rice varieties in Pakistan? What is the progress especially in developing climate-smart rice varieties such as flood-tolerant and drought-tolerant rice varieties? Hamid Malhi: Research is ongoing with nothing much to boast of. Increased financial allocations are required to meet the current challenges. Oryza: What government support are you getting/expecting in this regard? Hamid Malhi: None Oryza: What measures are being taken to increase basmati rice yields in the country? How are the post-harvest technologies in Pakistan vis-a-vis other rice producing countries? Hamid Malhi: Basmati Growers Association (BGA) has moved the government to introduce specialised paddy harvesters which would save grains and paddy straw from wastage. Oryza: Exporters have also been complaining that inadequate infrastructure, power shortages and poor port terminal operations have been impacting Pakistan’s rice exports. What are your comments? Hamid Malhi: Paddy is harvested and purchased during October – 15thDecember. It is milled and processed throughout the year. These impediments are no hurdle to exports. Government interest is primary for improvement of exports. Unfortunately its institutions are not geared for this task. The whole house has to be put in order. Commodity Boards for the guidance of government policy have to be established for timely decision making. Oryza: How are the basmati rice production costs in Pakistan? What is the ideal paddy price to be received by the farmers to cover their production costs? Hamid Malhi: The costs have been worked out at Rs.2,200 for 40 kilograms (around $546 per ton) of paddy. Currently Rs.2,500 per 40 kilograms (around $621 per ton) would be sustainable, this could be lowered down to Rs.2,200 for 40 kilograms (around $546 per ton) , if the fuel prices continue to fall or at least do not rise till next year’s harvest. Oryza: Lastly, what do you think should be the role of farmers in increasing the competitiveness of Pakistan rice globally? Hamid Malhi: The farmer can ensure quality and availability for the international market. The rest is up to the trade to do its bit. Cost of production has to go down to compete with the subsidised produce of the world. Agriculture cannot be taxed in comparison with trade and industry. This is not the norm worldwide. It makes us uncompetitive and eventually, farmer incomes suffer. Tags: Pakistan rice sector, Pakistan Basmati Rice Production, Pakistan basmati rice prices
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