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Rice acreage goes up in Louisiana, but prices fall The US probe of rice trade won’t yield much China's summer grain output at record high DA determined to pursue rice self-sufficiency goal Aquino urged to stop rice imports, impose price control while raiding rice hoarders Korea to announce rice market opening next week New Association Seeks To Improve Rice Market Anti-graft agency probing rice deals, links to ministers All’s Not Well in the Rice Market
News Detail… Rice acreage goes up in Louisiana, but prices fall Jul. 13, 2014 |
LAKE ARTHUR — Rice prices have fallen because of a big jump in Arkansas rice acreage, an LSU AgCenter agricultural economist said recently at the Vermilion Parish Rice Field Day.Mike Salassi said Arkansas acreage was approximately 1 million acres last year, but it increased by 500,000 acres this year.The long-term price forecast puts the long-grain price at $20 to $22 a barrel ($12.80 to $13.80 per hundredweight), and $29 to $31 a barrel ($18.20 to $19.20 per hundredweight) for medium-grain. Nationwide, the total rice acreage averages around 2.8 million to 3 million, Salassi said, but that total could exceed 3 million this year. But, he said, there has been a decline in medium-grain and short-grain acreage, as well as a reduction in carryover stocks from last year.Louisiana’s total is estimated at 455,000 acres, compared to 420,000 for last year.Salassi
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advised farmers to begin preparing for enrollment in the new farm bill after Jan. 1. He said several important decisions will have to be made in the next few weeks, and the LSU AgCenter will have material to assist farmers with the decisionmaking process. Also at the field day, LSU AgCenter rice breeder Steve Linscombe said few acres of Jazzman rice are being grown in Louisiana this year because of sharp competition from other countries in the overseas market. Most Jazzman rice grown in Louisiana was destined for export markets, he said.Linscombe said a new Clearfield Jazzman developed by the LSU AgCenter is being grown for seed this year, and it will be released for commercial production next year.Linscombe said the new checkoff program approved by the Louisiana Legislature and signed by Gov. Bobby Jindal is a positive step for rice research. Without the checkoff program, he said, work at the Rice Research Station would be reduced.―I promise you if we didn’t have the checkoff, we wouldn’t be doing any work off-station,‖ he said.Linscombe said off-station trials at the Lounsberry Farm, where the field day was held, has been conducted for 30 years.
Image: Eric Webster, LSU AgCenter weed scientist, talks at the Vermilion Parish Rice and Soybean Field Day onat the Lounsberry Farm near Lake Arthur. / Bruce Schultz/LSU AgCenter
The US probe of rice trade won’t yield much 14.07.2014 Rice is a political commodity. Governments all over the world maintain regimentation on rice production and trade through price controls and subsidisation, tariffs, phytosanitary and environmental safety standards— sometimes in a whimsical manner. On July 6, the United States International Trade Commission (USITC) notified investigations (to be completed by April 2015) on global competitiveness of the US rice ―industry‖ as compared with other exporting countries like China, India, Indonesia, Thailand, Vietnam, Uruguay, and Brazil—this assessment would also include practices adopted by major importing nations. The intention perhaps is to probe the morality of international rice trade.US-milled rice, at $570-670/mt fob, is grossly out-priced, by at least $200-$250/mt, by rice of Asian origin. The US output is 7 mt (milled) with export of about 3 mt, mostly to Latin American nations. In 2014-15, India’s and Thailand’s exports may touch 10 mt each, with Vietnam trailing at 7 mt.Despite the US’s average paddy yield of 8-9 tonnes/ha—the world average is 4 tonne/ha—farm price of paddy is about $350/mt (that makes milled rice $580/mt at conversion factor of 0.66). In India, paddy is priced at $235/mt, in Vietnam, at $240-$260/mt and in Thailand, at $480/mt till recently (now, at around $260/mt). Is this difference in paddy prices that worry the US?
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Market distortions Paddy production in developing countries is incentivised through subvention of inputs like seed/fertiliser, etc, and higher procurement prices while rice is discounted to poor consumers for vote-bank politics. Exports of surpluses thus get directly or indirectly subsidised. At the same time, importing nations make rice expensive by imposing high tariffs to protect domestic production/ inefficiencies, which are again followed by subvention to the targeted beneficiaries, creating arbitrage opportunities for the market players. Paddy can be processed to rice in many ways (raw, steamed, parboiled). By-products like husk, bran, bran oil and broken rice can also be traded. Export pricing of rice thus gets discounted with realisation from such collaterals. Long/medium/shortgrain (non–basmati rice) and aromatic (basmati) varieties can be mingled to average out pricing. Like in any other business, for rice trade also, in the grey area of ethics of pricing a commodity, adherence to fair market practices is diluted due to multiplicity of options available.
China's summer grain output at record high Xinhua News Agency July 14, 2014 12:16pm BEIJING, July 14 (Xinhua) -- China's summer grain output hit a record high of 136.60 million tonnes in 2014, up 3.6 percent from last year, said the National Bureau of Statistics (NBS) on Monday.The total planting area for summer grain crops expanded 0.1 percent from the previous year to 27.6 million hectares, the NBS data showed.China's summer grain crops, mainly wheat and early-season rice, usually account for about 20 percent of its annual grain output. Autumn grain crops, which include corn and middle- and late-season rice, account for the remaining 80 percent.
NBS senior analyst Huang Jiacai pointed out that climate conditions had been very favorable to wheat production this year, resulting in a higher per-unit yield of wheat.The latest bumper harvest of summer grain may help ease concerns about China's ability to feed its 1.3 billion people amid soaring cereal imports in recent years.Though cereal imports rose to more than 14 million tonnes in 2013, that accounted for less than 2.6 percent of the country's cereal output, according to the ministry of agriculture. In 2013, the country's grain selfsufficiency rate stood above 97 percent.China also has a "red-line" guarantee that the amount of land dedicated to arable farming shall never shrink to less than 120 million hectares.
DA determined to pursue rice self-sufficiency goal Category: Agri-Commodities 14 Jul 2014 Written by Alladin S. Diega / Correspondent
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THE government is not abandoning its rice self-sufficiency program, the Department of Agriculture (DA) said on Monday.Saying that food security is included in the current administration’s main list of concerns, ―[there is] no change for the food-sufficiency target,‖ Agriculture Secretary Proceso J. Alcala told reporters in a media briefing.―It’s just like a household issue. Why depend on others if you can produce the food yourself?‖ Alcala said.The comment was prompted by latest reports stating that Presidential Assistant on Food Sufficiency and Agriculture Modernization Francisco Pangilinan said 90 percent of rice sufficiency is enough and the rest will be secured through rice imports.
Alcala said that, at present, rice sufficiency is already at 96 percent, adding that perhaps Pangilinan has yet to review the full extent of the agricultural accomplishment or that ―he was just misquoted.‖Earlier, Agriculture Undersecretary Emerson Palad said the administration is not abandoning its rice self-sufficiency target.―In fact, for 2015, the DA is targeting 100-percent self-sufficiency, which is not far-fetched coming from the current 96percent level,‖ Palad said.In a statement, Rice Watch and Action Network, a rice non-governmental organization advocate, said, ―We are worried over Secretary Francis Pangilinan’s plan to allow the private sector to take over local procurement and the importation of rice as their solution to the problems besetting the local rice industry. ‖Aurora Regalado, convener of the group, said, ―The government should allow the rice industry to fully develop first, which is needed for a sustained and inclusive growth, before changes in the policy on rice subsidy is welcomed.‖The groups urged the government to pursue its own Food Self-Sufficiency Program (FSSP).Under the FSSP, the government, through the National Food Authority (NFA), is supposed to increase palay procurement from local farmers.Regalado said traded global rice is considered scarce, with only 5 percent to 7 percent of the world’s rice production being exported.‖―Rice is commonly consumed where it is produced,‖ Regalado said, adding that this finding was actually the reason the FSSP was conceptualized by the government after a series of consultations from rice-industry stakeholders, primarily the farmers. Alcala, noting that he is no longer a part of the NFA council, said ―should the NFA council decide to remove its subsidy on the farmers, the council should be very careful,‖ citing the experience in 2008, when the price of rice at the international market shot up.The DA chief also said it is unlikely that President Aquino will abandon the country’s rice self-sufficiency program.
Aquino urged to stop rice imports, impose price control while raiding rice hoarders By Allan Nawal |Inquirer Mindanao 4:25 pm | Sunday, July 13th, 2014
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RDAVAO CITY, Philippines – Bayan Muna Representative Neri Colmenares urged President Benigno Aquino III to stop the importation of rice and implement price control on the staple to stymie the rice cartel. Colmenares said conducting raids against unscrupulous traders alone would not address the problem on rice cartel, which has flooded the market with adulterated rice sold at high prices.―President Aquino should immediately stop import liberalization and deregulation policies and at the same time conduct the raids because raids would be useless if imported rice continuously flood the market, which is controlled by the rice cartel,‖ the militant lawmaker said in a statement sent to the Philippine Daily Inquirer. Colmenares said a price ceiling should also be enforced ―so as to protect consumers because the cartel would try to jack up prices.‖―Imposing a price ceiling, which will immediately penalize a violator with a maximum of 10 years imprisonment, has more teeth than a ―suggested‖ retail price, which will just start an investigation,‖ he said.Colmenares also said Malacañang should train its focus on opportunistic rice traders instead of small retailers.―The small retailers do not have the power to manipulate prices all over the country, only big time cartels have that power,‖ he added.In Digos City, Davao del Sur Gov. Claude Bautista said the provincial government has been closely coordinating with other government agencies to identify the sources of adulterated rice being sold in the markets. The National Food Authority (NFA) is important in the campaign against unscrupulous traders – who mix commercial rice with cheap imported varieties – as it has the mandate to run after them, according to Bautista.―We can only do so much,‖ Digos City Mayor Joseph Peñas agreed.As of Sunday, none of the big warehouses belonging to major rice traders in the province has been inspected.Felimon Cangrejo, provincial NFA head, said they have been monitoring rice operations with the assistance of the police’s Criminal Investigation and Detection Group (CIDG).―How come they could not find one? Adulterated rice are being widely sold in Digos City for example. These were being passed off as well-milled variety,‖ Editha Maliwanag, who admitted having to return a sack of ―7-tonner‖ rice to a retailer for being adulterated, said.
Korea to announce rice market opening next week Oh Kyu-wook The Korea Herald Publication Date : 12 -07-2014
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The Seoul government is set to announce its final plans for opening the rice market as early next week despite strong objections from farmers as well as ongoing debates about high import duties, a pre-condition for the market opening. ―We could no longer delay our decision. We have no other alternative, but to accept the market opening by imposing tariffs (on rice imports),‖ Yeo In-hong, vice minister of agriculture, food, and rural affairs said during the last public hearing, held at the National Assembly on Friday.His comments came as the Seoul government is set to make a decision on opening its rice market with the deadline set by the World Trade Organisation approaching in September. The vice minister said the ministry concluded that it would be a better choice to open the market by slapping high tariffs on rice imports instead of putting off liberalisation to protect the local farm industry.The ministry will reportedly announce tentative tariff rates for rice imports as early as next week, with experts predicting that the import duties will range from 400 to 500 percent. The vice minister said the duty rate had not yet been fixed. Local farmers are still divided over the market liberalisation. The Korean Advanced Farmers Federation, a lobby group of local farmers, said they can accept the opening of the market if the government keeps tariffs for imported rice as high as possible. The progressive Korean Peasants League, however, is strongly protesting the market opening, citing worries about free trade agreements’ potential threats to the local agricultural industry. ―The government is saying there is no other option without even trying to begin negotiations (with WTO),‖ Park Hyung-dae, an official from the Korean Peasants League said Friday.The progressive farmers’ group insists that the government should request a waiver from the WTO to keep its restrictions on imported rice, though it still requires approval from the members of trade organization.The government said earlier it would make its stance before the end of June but delayed its decision, citing more time needed to consult with the National Assembly before it notifies the WTO in September.South Korea must make a decision on the rice market as the current waiver deal with the WTO ends this year. The country was allowed to delay its rice market liberalisation for 10 years under a 1993 agreement with the WTO in which the country agreed to increase its minimum market access import quota by 20,000 tonnes per year. The government extended the agreement by 10 years in 2004.
New Association Seeks To Improve Rice Market uy Heimkhemra, VOA Khmer 14 July 2014
KANDAL PROVINCE — Cambodian farmers are looking toward a new organization to help them get the best prices for their rice, but many are skeptical disparities between farmers and traders can be overcome.The Cambodian Rice Federation was started
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in May, bringing together disparate companies, associations and farmers in a bid to stabilize market forces that have traditionally left farmers vulnerable.Sitting in the shade of a palm tree one recent afternoon, farmer Phan Chantol said he has received little help from previous associations.―I know none of them,‖ he said. Instead, he has had to sell his rice at low prices to traders, who then sell it at a high mark-up. ―So they all can earn more profits,‖ the 33-year-old farmer said.Cambodia exported about 380,000 tons of rice in 2014. But economists say it could do a lot better. Poor yields and poor market structures have traditionally hurt the industry, while neighbors Thailand and Vietnam have become international powerhouses in rice export.Before the Cambodian Rice Federation was created, 84 companies and three associations were in operation for the collection, production and export of rice. But farmers remained highly vulnerable to the market and traders, forced to sell once their fields have yielded rice, when there is a glut.―The trader is king, when you talk about the price of rice,‖ Phan Chantol said. ―We earn no profits from planting rice; it’s just for eating. Now, most farmers in my village have decided to migrate to Thailand, rather than grow rice.‖The new federation aims to change that.The Cambodian Rice Federation will be led by Sok Puthyvuth, the son of Cabinet Minister Sok An, who as voted in at the inception of the organization by rice millers, exporters and other industry leaders.Sok Puthyvuth told VOA Khmer the goals of the federation are to unite shareholders in an effort to operate faster; to work with government authorities to solve problems in the sector; and then to expand the rice exports to more countries.―Our plan is also to go out and help farmers through education about techniques to grow rice with high productivity and ensure proper rice prices for our farmers,‖ he said. The federation will have to convince farmers like Khouen Tith, 45, from Prey Veng province, who says the price is just too low to make farming worthwhile. He and his wife now work in Kandal province, earning money each day plowing land for other farmers.On a break at the corner of a rice field, he said there was no profit, compared to what he spent on fertilizer alone. The rice was sometimes just enough for him to eat, and sometimes he’d be caught in some disaster or drought. ―I heard that there’s a newly formed rice federation to help farmers, but I am not optimistic it will help farmers,‖ he said. All that’s needed is fair payment for rice, he said. Sok Puthyvuth said he hopes to address the price problem.Meanwhile, millers like Hean Vanhorn say the new federation could help exports, especially if the Ministry of Commerce helps with organization and structure.Kim Savuth, former president of the Federation of Cambodian Rice Exporters, which was absorbed into the new federation, said he supports the unification.―United, we will have more people and more ideas to work together,‖ he said. ―Otherwise, our work may have been repeated.‖
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Anti-graft agency probing rice deals, links to ministers PHUKET: The National Anti-Corruption Commission sub-panel is deeply probing alleged irregularities in the ricepledging scheme's financial transactions to identify possible nominees linked to five former ministers under investigation, NACC deputy secretary-general Warawit Sukboon said yesterday.Facing graft probes in connection with the ricepledging scheme are ex-PM Yingluck Shinawatra, ex-commerce ministers Niwatthamrong Boonsongpaisan, Boonsong Teriyapirom and Yanyong Phuangrach and former deputy commerce minister Poom Sarapol. Warawit said the NACC was waiting for more information from banks and relevant state agencies. He said all the information would be further examined in depth through analyses and syntheses to identify any irregularities in the financial transactions made by the five ex-officials before they assumed and left their post.He said the graft panel would also interrogate parents, spouses and children and other people linked to the five to see if there were any suspicions they could have acted as nominees.The panel would meet twice a month to expedite the investigation. If there were evidence the five had become unusually rich, the NACC would request that the Attorney General indict them and confiscate their assets. Warawit said the NACC could directly file petitions with the Supreme Court to prosecute them if it had suspicions that any of them had committed asset concealment or submitted a false asset declaration.ML Panadda Diskul, permanent secretary of the Prime Minister's Office, yesterday led a team of officials to inspect Udon Thani rice warehouses with thousands of sacks of pledged rice under the rice-pledging scheme and found that 25 sacks of broken rice were missing.Panadda said his team did not find any irregularities as the number of missing sacks was much lower than 5 per cent of the total number of sacks and therefore the warehouses would not be probed further. He said some sacks were infested with weevils and at one stage the inspection team - which included military officers had to flee a warehouse after being swarmed by weevils.The team used a forklift to ensure there were no attempts to cover up rice theft. Previous checks had found that some warehouses managers had tried to deceive officials by neatly piling rice sacks several metres high to form a four-sided wall but it was hollow inside the wall.Panadda rejected criticism that the inspections were politically motivated, saying they were part of the move to regulate the rice sector to bring Thai rice back to glory.
All’s Not Well in the Rice Market Written by Samarendu Mohanty SUN,13 JULY 2014
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On the surface, rice markets remain calm and stable, but underlying market sentiments are rapidly changing because of weather disruptions in many rice-growing nations. The global rice market faces the possibility of a production shortfall in the major rice-growing regions in South and Southeast Asia and also in China because of El Niño events. So far, the market has been quite nonchalant about this possibility because of large buffer stocks in key rice-growing countries. Global rice stocks, at least on paper, have increased by 36−80 million tons since the rice crisis in 2007 (USDA: 36 million tons; FAO: 80 million tons). However, the majority of these increases in rice stocks have occurred in three countries (India, China, and Thailand) and they have largely been held by the state agencies.
Among these three countries, the Food Corporation of India (FCI), the nodal agency of the Indian government for rice procurement, publishes the procurement stock level on its website on a monthly basis, whereas China has always been secretive about its grain reserves. According to FAO, the current rice inventory in China is close to 100 million tons, whereas USDA puts it close to 50 million tons. Despite these large stocks, China has emerged as the largest importer of rice in the world in the past couple of years and nobody can provide a satisfactory answer as to why China is suddenly importing so much rice. Similarly, Thai rice stocks have ballooned in the past couple of years because of the pledging scheme implemented in late 2011, but there is a lot of confusion among government officials and rice traders and millers on the level of pledged rice stored in thousands of warehouses spread across the country. The Thai military government is now investigating 1,800 warehouses across the country to ascertain the quantity and quality of the stored rice. El Niño Effects Many rice-growing countries in South and Southeast Asia are cautiously optimistic about rainfall distribution in the next couple of months that will determine the fate of the biggest crop of the year and is likely to shape the direction of the market. In the case of India, the largest exporter in the world, where the wet season crop accounts for more than 85% of the total crop, the southwest monsoon arrived in many rice-growing states 7 to 10 days late and has weakened in many parts of India since then. In the eastern state of Odisha, the monsoon arrived in the third week of June and soon after disappeared. In many parts of the state, paddy transplanting has not started yet. The agricultural director of the state told the media on 9 July that, if rain does not return by the next week (15 July), then a million hectares of land cannot be planted with rice this season, that is, a quarter of the total rice in the state. But, fortunately, rainfall started today (12 July) and is expected to continue for the next few days. This should speed up transplanting in the state. Several southern states such as Andhra Pradesh, Telangana, and Karnataka also face similar situations because of deficit rainfall so far. The fate of millions of hectares of rice land is dependent on the revival of monsoon in the next couple of weeks.Although the current government rice stocks of 25.5 million tons (as of 1 July 2014) are at a very comfortable level, they have declined by 6 million tons from the 31.5 million tons at the same time in 2013 (Food Corporation of India website, accessed on 10 July 2014). In order to control rice prices, the government has recently allocated 5 million tons of rice for sale through the Public Distribution System at heavily subsidized prices.The new government will be under pressure if planting
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is substantially reduced because of the late revival of monsoon and it may take measures to restrict exports, at least of nonbasmati rice, to safeguard the domestic food supply and keep enough in the warehouse to meet the requirements of the domestic food subsidy program.The first line of action of the government will be to impose a minimum export price for nonbasmati rice exports to keep more rice in the domestic market similar to what it has done for onion in the past few weeks. In mid-June, the government imposed a minimum export price of US$300 per ton and further increased the minimum export price to $500 per ton after two weeks.
If domestic rice prices continue to rise even after the imposition of a minimum export price, then some form of quantitative export restrictions or even an outright export ban on nonbasmati rice is definitely a possibility.India’s actions to combat drought will largely decide the fate of the global rice market in the next few months. Its influence as the largest exporter of rice is a lot greater now than what it used to be in 2007. If India remains open for business, the rice market will behave rationally and prices will be determined by fundamental factors. However, if India imposes any export restrictions, particularly quantitative restrictions, then the market might panic.
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