13th august,2015 daily exclusive oryza rice e newsletter by riceplus magazine

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August 13, 2015

Vol 5.Issue XIII

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China to Slow Imports of Vietnam Rice Aug 12, 2015

China, one of the major destination for Vietnamese rice for the last few years, has cut down on rice imports from Vietnam since the beginning of this year. The Chinese actions have also impacted Vietnam's rice exports severely during the first half of this year.

Increasing demand for imported rice in China has been a boon to Vietnamese exporters over the last few years. China imports rice despite being the world's top rice producer with over 140 million tons annually. A few internal factors are said to have led to higher imports. One, fall in proportion of rice in the country's food basket has led to a decline in paddy rice acreage significantly; two, increasing prices of domestic rice prices; and three, Chinese preference to imported rice have contributed to higher imports in the recent years.

Experts say China normally imports higher volume when prices are low. But this year, low prices especially in Vietnam could not attract Chinese demand. However, both UN's Food and

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Agriculture Organization (FAO) and USDA are predicting China to import more rice from Vietnam in the second half of 2015 due to declining rice prices as well as the impact of droughtinducing El Nino pattern on Chinese production.

However, experts have expressed concern that since China is holding huge amount of stocks in its inventory and is unable to sell them to local traders, the Chinese government may ask traders to buy rice from the government stocks in exchange for import quotas.

In that case, they say Vietnam's rice exports may be impacted severely. The Vietnam Food Association (VFA) has last month forecasted Vietnam to export around 5.91 million tons of rice in 2015, down about 6.5% from an earlier estimated 6.32 million tons, Reuters quoted a report from the VFA. Meanwhile, a devaluation of the renminbi (yuan) is expected to make rice and other imports more expensive. Experts say China has acted proactively by devaluing its currency on concerns that the U.S. Federal Reserve (Fed) may hike interest rates, a move that could strengthen the U.S. dollar while putting upward pressure on the renminbi as it is linked to the dollar.

In this situation, China may not be in a position to take advantage of the low rice export prices. Vietnam 5% broken rice is currently quoted at around $345 per ton compared to Thai 5% rice at around $370 per ton, India 5% rice at around $370 per ton and Pakistan 5% rice at around $345 per ton.

On the other hand, following the Chinese yuan devaluation, Vietnam has doubled its trading band for interbank dollar/dong transactions letting dong to depreciate freely. These moves together with the lowering of the floor price of 25% broken rice may lead to further declining of the Vietnam rice export prices, say experts.

Floods May Lower Myanmar's Rice Exports in 2015, Says FAO Aug 12, 2015

The UN's Food and Agriculture Organization (FAO) forecasts the on going floods in Myanmar are likely to impact the volume of rice exports in 2015. The FAO had earlier estimated Myanmar to export around 810,000 tons of rice in 2015. But in the light of floods affecting vast areas of paddy fields, the UN agency says Myanmar's rice exports may be below the earlier estimated figure.

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The 2015 main (wet) season rice is currently at the vegetative to early reproductive growth stage.

Severe floods in the northern and western Myanmar are said to have damaged around 210,000 hectares of standing paddy crop. Prior to floods, the FAO forecasted the country's aggregate paddy production, including the on going 2015 main and the forthcoming 2015/16 secondary season, at around 29.2 million tons. However, the actual may be below this figure, says the FAO. Wholesale prices of the most commonly used rice variety Emata declined in July with the arrival of 2014-15 second season harvest but remained above their year-ago levels.

Conab Slightly Lowers Brazil 2014-15 Production Estimates Due to Likely Fall in Acreage Aug 12, 2015

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Brazil’s National Grains Supply Company (Conab) has forecasted the country's 2014-15 paddy rice production at around 12.432 million tons (around 8.45 million tons, basis milled), up about 2.6% from around 12.121 million tons (around 8.24 million tons, basis milled) in 2013-14, and slightly down from its July forecast of around 12.499 million tons.

Conab has estimated Brazil's 2014-15 paddy rice acreage at around 2.284 million hectares, down about 3.75% from around 2.373 million hectares in 2013-14, and slightly down from its July forecast of around 2.292 million hectares.

Most of the decline in acreage is expected in the North/Northeast region. Rice acreage in the North/Northeast regions is estimated at around 739,200 hectares, down 8.5% from around 808,400 hectares in 2013-14. On the other hand, paddy rice acreage in the key rice growing Centro-Sul (Center-South) region is projected at 1.545 million hectares in 2014-15, down about 1% from around 1.565 million hectares in 2013-14.

Average rice yield in Brazil in 2014-15 is projected at around 5.45 tons per hectare, up about 6.6% from around 5.11 tons per hectare recorded in the previous year, and slightly up from its July forecast of around 5.43 tons per hectare.

USDA estimates Brazil MY 2015-16 (April – March) paddy rice production at around 11.765 million tons (around 8 million tons, basis milled), down about 6% from an estimated 12.5 million tons (around 8.5 million tons, basis milled) in MY 2014-15. It estimates Brazil’s 2015-16 paddy

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rice acreage to decline slightly to around 2.3 million hectares. USDA estimates Brazil to export around one million tons of rice and import around 550,000 tons of rice in 2015.

Global Rice Quotes August 13th, 2015 Long grain white rice - high quality Thailand 100% B grade 375-385

↔

Vietnam 5% broken

340-350

↔

India 5% broken

380-390

↔

Pakistan 5% broken

340-350

↔

Myanmar 5% broken

405-415

↔

Cambodia 5% broken

425-435

↔

U.S. 4% broken

485-495

↔

Uruguay 5% broken

535-545

↔

Argentina 5% broken

530-540

↔

Long grain white rice - low quality Thailand 25% broken

350-360

↔

Vietnam 25% broken

325-335

↔

Pakistan 25% broken

310-320

↔

Cambodia 25% broken 410-420

↔

India 25% broken

345-355

↔

U.S. 15% broken

460-470

↔

Long grain parboiled rice Thailand parboiled 100% stxd

370-380

Pakistan parboiled 5% broken stxd

↓ ↔

415-425

India parboiled 5% broken stxd 370-380

↔

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Page 7 of 15 U.S. parboiled 4% broken

570-580

↔

Brazil parboiled 5% broken

545-555

↔

Uruguay parboiled 5% broken NQ

↔

Long grain fragrant rice Thailand Hommali 92% Vietnam Jasmine

850-860 485-495

↔

India basmati 2% broken

NQ

↔

Pakistan basmati 2% broken

NQ

↔

Cambodia Phka Mails 835-845

↓

↔

Brokens 320-320

↔

Vietnam 100% broken 310-320

↔

Thailand A1 Super

Pakistan 100% broken stxd Cambodia A1 Super

280-290

350-360

↔

India 100% broken stxd

305-315

Egypt medium grain brokens

NQ

U.S. pet food

↔

325-335

Brazil half grain

NQ

↔

↔

↔

↔

All prices USD per ton, FOB vessel, oryza.com

India Rice Sellers Lower Some of Their Quotes Today; Other Asia Rice Quotes Unchanged Today Aug 12, 2015

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India rice sellers lowered their quotes for 5% broken rice and parboiled rice by about $5 per ton each to around $380-$390 per ton and $370-$380 per ton, respectively, today. Other Asia rice sellers kept their quotes mostly unchanged today.

5% Broken Rice Thailand 5% rice is indicated at around $365 - $375 per ton, about $25 per ton premium on Vietnam 5% rice shown at around $340 - $350 per ton. India 5% rice is indicated at around $380 - $390 per ton, down about $5 per ton from yesterday and about $40 per ton premium on Pakistan 5% rice shown at around $340 - $350 per ton.

25% Broken Rice Thailand 25% rice is shown at around $350 - $360 per ton, about $25 per ton premium on Vietnam 25% rice shown at around $325- $335 per ton. India 25% rice is indicated at around $345 - $355 per ton, about $35 per ton premium on Pakistan 25% rice shown at around $310 $320 per ton.

Parboiled Rice Thailand parboiled rice is indicated at around $380 - $390 per ton. India parboiled rice is indicated at around $370- $380 per ton, down about $5 per ton from yesterday and about $45 per ton discount to Pakistan parboiled rice last shown at around $415 - $425 per ton.

100% Broken Rice Thailand broken rice, A1 Super, is indicated at around $320 - $330 per ton, about $10 per ton from premium on Vietnam 100% broken rice shown at around $310 - $320 per ton. India's 100% broken rice is shown at around $305 - $315 per ton, about $25 per ton premium on Pakistan broken sortexed rice shown at around $280 - $290 per ton.

Oryza Afternoon Recap - Chicago Rough Rice Futures Dragged Lower by Huge Losses in US Grains as USDA Surprises Market with Bearish S&D Report Daily Exclusive ORYZA Rice E-Newsletter Contents are published with permission of ORYZA.com

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Aug 12, 2015

Chicago rough rice futures for Sep delivery settled 8 cent per cwt (about $2 per ton) lower at $11.710 per cwt (about $258 per ton). The other fell tumbled today as the USDA surprised the market with what has been interpreted as a very bearish S&D report; Soybeans closed about 6.3% lower at $9.1000 per bushel; wheat finished about 2.9% lower at $4.9725 per bushel, and corn finished the day about 5% lower at $3.6800 per bushel.

U.S. stocks fell about 1% on Wednesday as a second day of decline in the yuan against the dollar increased concerns about global growth. The major averages trimmed losses in midday trade as oil recovered slightly to boost the energy sector 1% and Apple turned higher to gain more than 1%.The People's Bank of China set the yuan fixing at 6.3306 against the U.S. dollar on Wednesday, 1.6% weaker than the previous day's level. The move signaled Beijing's new commitment to set the daily fixings according to the previous day's closing spot prices and market-moves of other major currencies.

The yuan extended losses, dipping to 6.42 per dollar, its weakest level in four years, fueling expectations of more sustained weakness and a feared "currency war"—where countries artificially weaken their currencies to gain a competitive advantage. U.S. job openings totaled 5.2 million in June, versus 5.3 million expected. The Dow Jones Industrial Average traded down 138 points, or 0.80%, at 17,263. The S&P 500 traded down 15 points, or 0.74%, at 2,068, with financials leading eight sectors lower and energy and utilities leading advancers. The Nasdaq traded down 44 points, or 0.89%, at 4,992. Gold is trading about 1.4% higher, crude oil is seen trading about 0.1% higher, and the U.S. dollar is seen trading about 1.1% lower about 1:00pm Chicago time.

Tuesday, there were 6,239 contracts traded, up from 1,554 contracts traded on Monday. Open interest – the number of contracts outstanding – on Tuesday decreased by 99 contracts to 10,094.

India Rice Stocks in Central Pool Stand at 18.6 Million Tons as of August 1, 2015; Down 24% from Last Year Aug 12, 2015

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India’s rice stocks in the central pool as of August 1, 2015 stood at around 18.6 million tons (including a milled equivalent of about 5.021 million tons of paddy), down about 24% from around 24.56 million tons recorded during the same period 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 about 13% from around 21.5 million tons recorded on July 1, 2015. However, current rice stocks are about 61% more than the required buffer and strategic reserve norms of around 11.54 million tons for this time of the year, according to the FCI. Total food grain stocks (including rice and wheat) in the central pool stand at around 55.523 million tons as of August 1, 2015, down about 13% from last year's stock of around 63.639 million tons and down about 8% from last month's stock of around 60.323 million tons. Wheat stocks stand at around 36.778 million tons, down about 3.5% from last year's stock of around 38.108 million tons and down about 5% from last month's stock of around 38.68 million tons.

The government of India had revised the buffer norms for food grains, including rice, in the Central Pool in January this year. According to the new norms, buffer stocks for food grains to be maintained with the FCI at this part of the year is 41.12 million tons.

Oryza Overnight Recap – Chicago Rough Rice Futures Little Changed as Traders Daily Exclusive ORYZA Rice E-Newsletter Contents are published with permission of ORYZA.com

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Make Last Minute Adjustments to Positions Ahead of USDA S&D Report Aug 12, 2015

Chicago rough rice futures for Sep delivery are currently seen trading 1 cent per cwt (about $0.22 per ton) higher at $11.800 per cwt (about $260 per ton) during early floor trading in Chicago. The other grains are seen trading mixed this morning; soybeans are currently seen trading about 0.3% lower, wheat is listed about 0.7% higher and corn is currently noted about 0.2% higher.

U.S. stock index futures indicated another sharply lower open on Wednesday, with Dow futures down briefly more than 150 points after China moved to devalue its currency for a second day in a row. The People's Bank of China set the yuan fixing at 6.3306 against the U.S. dollar on Wednesday, 1.6% weaker than the previous day's level. The move signaled Beijing's new commitment to set the daily fixings according to the previous day's closing spot prices and market-moves of other major currencies. The yuan extended losses, dipping to 6.42 per dollar, its weakest level in four years, fueling expectations of more sustained weakness and a feared "currency war" – where countries artificially weaken their currencies to gain a competitive advantage. Traders on Wednesday may be busier watching market signals than the few earnings and data on the calendar.

On Tuesday, a negative technical sign appeared in the chart of the Dow, after its 50-day moving average crossed below its 200-day moving average, a bearish sign known as the "death cross".

European equities slumped after a yuan-related selloff in Asian stocks weighed on investor sentiment, with auto stocks coming under significant pressure. Some key data releases were also expected on Wednesday, with June JOLTS data due at 10.00 a.m. ET, followed by the July Federal Budget statement at 2.00 p.m. Gold is currently trading about 0.7% higher, crude oil is seen trading about 0.8% higher, and the U.S. dollar is currently trading about 0.9% lower at 8:45am Chicago time.

Philippines 2015 Paddy Rice Output May Fall Below Target Due to Drought, Says PSA Aug 12, 2015

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The Philippine Statistics Agency (PSA) has estimated the country's 2015 paddy output at around 18.86 million tons, about 6% below the targeted 20.08 million tons and slightly down from last year's output of 18.97 million tons, according to Reuters.

The country's first half harvest was impacted by the persisting dry conditions induced by an El Nino weather phenomenon. The Philippines paddy output in the first half of 2015 was recorded at around 8.3 million tons, down about 1% from last year's 8.39 million tons and down about 2.4% from the targeted 8.5 million tons The local weather bureau has warned of an intensifying El Nino in the coming months significantly affecting paddy output in central, southern and northern provinces. The PSA forecasts rice output in the second half of 2015 to drop about 0.5% to around 10.54 million tons.

The development implies that the government may be prompted to import more rice in the year.

The National Food Authority (NFA) has already imported 750,000 tons of rice (200,000 tons from Thailand and 550,000 tons from Vietnam) under government-to-government deals to ensure adequate stocks in the lean season (June – September). It has also allowed the private

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traders to import 805,200 tons of rice under the WTO minimum access volume (MAV) rule. The NFA is still authorized to import another 250,000 tons in case of adverse weather conditions.

It imported more than 1.8 million tons of rice (including 1.5 million tons of 2014 imports and 300,000 tons of 2013 residual imports) in 2014 to replenish rice stocks and control price hikes.

Pakistan Rice Growers Urge Government to Procure Paddy at a Fixed Price Aug 12, 2015

Pakistan rice growers are urging the government to fix the purchase price for paddy and procure paddy from farmers in order to help them come out of their financial problems, according to local sources.

Addressing a convention of paddy growers, the President of a Pakistan rice growers association noted that paddy growers in some rice growing regions are facing severe financial troubles as

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there are no buyers for their paddy. He noted that rice stocks worth $6 billion have not been exported and due to that millers and traders are not buying paddy from farmers this year.

He therefore noted that the government should purchase paddy from farmers through the Pakistan Agricultural Storage & Services Corporation Limited (PASCO) and the Pakistan Trading Corporation (PTC) to give a financial boost the them.

The official also urged the government to make arrangements for exporting the existing stocks on an emergency basis to protect growers and exporters from becoming bankrupt.

Other speakers in the convention also urged the government to modify its policies regarding paddy procurement, pricing and exports to protect the rice sector, which can earn billions of foreign exchange to the country.

Pakistan exported around 3.93 million tons of rice in FY 2014-15 (July-June), up about 6% from around 3.72 million tons exported in FY 2013-14, according to preliminary data from the Pakistan Bureau of Statistics (PBS).

Philippines Rice Stocks Decline for Second Consecutive Month in July 2015 Aug 12, 2015

Philippines rice stocks have declined for second consecutive month in July 2015, after increasing in April and May, according to the Bureau of Agricultural Statistics (BAS).

Total rice stocks in the Philippines as of July 1, 2015 stood at around 2.57 million tons, down about 15% from around 3.02 million tons recorded in June 2015, and up about 27% from around 2.03 million tons recorded during the same period last year.

According to the BAS, household stocks (which account for about 37.1% of total rice stocks in the country) stood at around 950,000 tons as of July 1, 2015, up about 8% from year-ago levels of around 880,000 tons. Commercial warehouse rice stocks (which account for about 32.7% of total stocks) have reached around 840,000 tons as of July 1, 2015, up about 22% from their yearago levels of around 690,000 tons. The rice stocks with the National Food Authority (NFA) (which account for 30.2% of total stocks) stood at around 770,000 tons, up about 67% from around 460,000 tons recorded in June 2014.

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Month-on-month, household rice stocks are down about 18%, commercial warehouse rice stocks are down about 24% and NFA rice stocks - in which about 91% are imported rice - are up about 2.6%, according to the BAS. The BAS says that the Philippines' rice stocks as of July 1, 2015 are enough to last for 76 days (household stocks are enough for 28 days, commercial warehouses stocks are enough for 25 days and stocks with NFA are enough for 23 days).

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