4th september,2015 daily exclusive oryza rice e newsletter by riceplus magazine

Daily Exclusive ORYZA Rice E-Newsletter Page 1 of 26

4th September, 2015

Vol 5.Issue XIII

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China Seeks to Boost Rice Production Amid Challenges of Increasing Consumption, Environmental Pollution Sep 03, 2015

China is seeking to boost rice production to meet rising consumption demand but increasing levels of soil and water pollution are posing great challenges to the East Asian country, say analysts.An article in the Nikki Asian Review analyses the challenges faced by China in boosting yields and quality of rice production in the light of rapid conversion of farmland to industrial use coupled with soil pollution and water shortages.

The Director for Asia Studies at the New York-based Council on Foreign Relations recently warned in a commentary that "soil contamination, like air and water pollution, exacts a heavy economic and political toll on the Chinese people." She stated that China produces at least 12 million tons of heavy metal-contaminated rice worth about $3.2 billion annually. Officials also

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discovered high levels of cadmium in rice from Hunan Province, the center of Chinese rice production.

The U.N. Economic and Social Commission for Asia and the Pacific (Unescap) noted in a recent report that China faces pressures to maintain quality in the context of heavy industrialization. "It also must balance water resources across key sectors, as well as meet increased per capita demand," it said.

The U.N.'s 2015 World Water Development Report also noted that intensive irrigation in the Northern provinces has lowered the water table by more than 40 meters since 1960.

In 2014, the Ministry of Environmental Protection and the Ministry of Land Resources noted in a report that 16.1% of the country's soil was polluted, including 19.4% of farmland.

China is reportedly taking measures to address the pollution and water problems. In April 2015, the government came up with the Action Plan for Water Pollution Prevention and Control. Under this it aims to achieve significant improvements in water quality by 2020, including containing ground water pollution. The Ministry of Environmental Protection will introduce a new soil pollution prevention law from 2017.

From the production angle, the government is also trying to increase rice production with the help of the Philippines-based International Rice Research Institute. The IRRI is researching improves rice varieties that can produce higher yields in spite of environmental challenges.

However, analysts expressed concern that China's rice imports are increasing significantly to meet the demand. Unofficial imports are increasing due to wide price differentials between domestic and international prices. Smuggling is understood to take place through the borders of Vietnam, Myanmar, Thailand and Laos with the connivance of Chinese authorities. Nearly 4-5 million tons of rice is said to enter China unofficially every year.

Experts are estimating that unofficial imports would increase because of the soil and water pollution issues. They also expressed concern that increased imports would lead to higher global rice prices.

According to the data from the International Grains Council (IGC), China's milled rice production is estimated to increase to around 144.6 million tons from an estimated 142.5 million tons in 2014. China is expected to import around 4 million tons officially in 2015 compared to around 3.7 million tons in 2014. Production and imports are likely to increase to around 145.6 million tons and 4.2 million tons respectively in 2016.

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Asia Rice Quotes Mixed Today Sep 03, 2015

Thailand rice sellers kept their quotes mostly unchanged today. Vietnam rice sellers increased their quotes for 25% broken rice and 100% broken rice by about $10 per ton each to around $320-$330 per ton and $315-$325 per ton respectively and lowered their quotes for Jasmine rice by about $5 per ton to around $450-$460 per ton. India rice sellers increased their quotes for 100% broken rice by about $5 per ton to around $300-$310 per ton. Pakistan rice sellers lowered most of their quotes by about $5 per ton today.

5% Broken Rice Thailand 5% rice is indicated at around $350 - $360 per ton, about $25 per ton premium on Vietnam 5% rice shown at around $325 - $335 per ton. India 5% rice is indicated at around $365 - $375 per ton, about $50 per ton premium on Pakistan 5% rice shown at around $315 - $325 per ton, down about $5 per ton from yesterday.

25% Broken Rice Thailand 25% rice is shown at around $335 - $345 per ton, about $15 per ton premium on Vietnam 25% rice shown at around $320- $330 per ton, up about $10 per ton from Tuesday.

India 25% rice is indicated at around $340 - $350 per ton, about $50 per ton premium on Pakistan 25% rice shown at around $290 - $300 per ton, down about $5 per ton from yesterday.

Parboiled Rice Thailand parboiled rice is indicated at around $355 - $365 per ton. India parboiled rice is indicated at around $355- $365 per ton, about $60 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 $310 - $320 per ton, about $5 per ton from discount to Vietnam 100% broken rice shown at around $315 - $325 per ton, up about $10 per ton from Tuesday. India's 100% broken rice is shown at around $300 - $310 per ton, up about $5 per ton from yesterday and about $25 per ton premium on Pakistan broken sortexed rice shown at around $275 - $285 per ton, down about $5 per ton from yesterday.

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Pakistan to Export Rice to Iran in Exchange for Electricity Payments Sep 03, 2015

Pakistan has agreed to export rice to Iran in exchange for dues payable for imported electricity, Bloomberg quoted ta statement by the Finance Ministry.Pakistan will reportedly continue to purchase about 74 megawatts of energy from the Iranian company Tavanir. The deal is understood to be finalized by the Pakistani delegation that is visiting Iran.

The development would be a welcome news to Pakistani rice exporters who are struggling with increasing stocks, declining demand and falling prices. Iran is one of the largest importers of rice accounting for about 11% of the world's annual rice imports. Pakistani rice has a good reputation

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in Iran according to traders. Moreover, geographical proximity between the two nations is an added advantage for Pakistan rice exporters, say traders.

However, exporters say in order to ensure smooth export procedures with Iran, a proper currency transfer system is necessary. Pakistan's trade was routed through the Bank of New York (BNY).

But due to sanctions, the U.S. suspended the trade route through the BNY.

Bangladesh 2014-15 Milled Rice Production Reaches Record High Sep 03, 2015

Bangladesh's FY 2014-15 (July 2014 - June 2015) milled rice production reached a record high of around 34.708 million tons, slightly up from around 34.41 million tons in 2013-14, local sources quoted provisional data by the Bangladesh Bureau of Statistics (BBS).

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According to the BBS data, output from the Aman crop (July - December) stood at around 13.19 million tons, up about 1.28% from around 13 million tons last year; output from the Aus crop (February - August) stood at around 2.328 million tons, up about 0.8% from around 2.3 million tons last year; and output from the 2014-15 Boro rice crop (January - May) stood at around 19.19 million tons, up about 0.63% from around 19.07 million tons last year. Boro, Aman and Aus contribute to about 56%, 38% and 6% respectively to the total country's output.

Paddy rice acreage in 2014-15 stood at around 11.415 million hectares, compared to around 11.373 million hectares in 2013-14, as per the estimates from the Bangladesh Space Research & Remote Sensing Organisation (SPARSO).

Favourable weather conditions and supply of quality inputs in time were the keys to the growth said the Director of the Department of Agriculture Extension (DAE).

The country reportedly imported about 1.45 million tons of rice during FY 2014-15, about four times more higher than in 2013-14, despite a record production due to prevailing low global rice prices, according to the Ministry of Food.

USDA estimates Bangladesh’s MY 2015-16 (July 2015 – June 2016) milled rice production at around 35 million tons, slightly up from an estimated 34.5 million tons in MY 2014-15. It estimates Bangladesh to import around 1.2 million tons of rice in 2015.

Global Rice Quotes September 4th, 2015 Long grain white rice - high quality Thailand 100% B grade 360-370

↔

Vietnam 5% broken

325-335

↔

India 5% broken

365-375

↔

Pakistan 5% broken

315-325

↔

Myanmar 5% broken

415-425

↔

Cambodia 5% broken

425-435

↔

U.S. 4% broken 530-540 Uruguay 5% broken

↔

535-545

↔

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Page 8 of 26 Argentina 5% broken

530-540

↔

Long grain white rice - low quality Thailand 25% broken

335-345

↔

Vietnam 25% broken

320-330

↔

Pakistan 25% broken

290-300

↔

Cambodia 25% broken 410-420

↔

India 25% broken

340-350

↔

U.S. 15% broken

500-510

↔

Long grain parboiled rice Thailand parboiled 100% stxd

355-365

Pakistan parboiled 5% broken stxd

↔

415-425

↔

India parboiled 5% broken stxd 355-365

↔

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% 820-830

↓

Vietnam Jasmine

↔

450-460

India basmati 2% broken

NQ

↔

Pakistan basmati 2% broken

NQ

↔

Cambodia Phka Mails

830-840

↔

310-320

↔

Vietnam 100% broken 315-325

↔

Brokens Thailand A1 Super

Pakistan 100% broken stxd

275-285

↔

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Page 9 of 26 Cambodia A1 Super

355-365

↔

India 100% broken stxd 300-310

↔

Egypt medium grain brokens

NQ

↔

U.S. pet food

↔

335-345

Brazil half grain NQ

↔

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

Egyptian Cabinet Approves One Million Ton Rice Exports Sep 03, 2015

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The Egyptian Cabinet has given approval for exporting one million tons of rice, Bloomberg quoted a statement from the Cabinet.

The cabinet noted that exporters need to sell one ton of medium-grain rice at about 2,000 Egyptian pounds (around $255) to the General Authority for Supply Commodities (GASC) for every ton of rice they export, as well as pay an export tariff of around $280 per ton of rice exported.

Export licenses granted as per the 2014 allowance are understood to be valid for the current exports.

The decision comes after the government has decided to ban rice exporters from September 1, 2015 in order to cater to domestic demand.

USDA estimates Egypt to produce 4.5 million tons of milled rice and export around 250,000 tons in MY 2014-15 (October - September).

Oryza Afternoon Recap - Chicago Rough Rice Futures Rally as Other Grains Continue to Push into Negative Territory Sep 03, 2015

Chicago rough rice futures for Nov delivery settled 10.5 cents per cwt (about $2 per ton) higher at $12.060 per cwt (about $266 per ton). The other grains continued to push lower today; Soybeans closed about 0.5% lower at $8.6950 per bushel; wheat finished about 2.9% lower at $4.6525 per bushel, and corn finished the day about 1.6% lower at $3.6150 per bushel.

U.S. stocks traded in a narrow range, attempting to extend a recovery as investors eyed fluctuations in oil prices and awaited Friday's key jobs report. The Nasdaq composite held mostly lower in early afternoon trade to wipe out gains for 2015. The S&P 500 and Dow Jones industrial average dipped in and out of negative territory in afternoon trade. Earlier, the blue chip index gained as much as 197.69 points in an attempt to stay out of correction territory. The energy sector struggled to hold gains after earlier spiking more than 2% on a surge in oil prices.

On Wednesday, the S&P 500 and Nasdaq composite closed out of correction territory to within 10% of their 52-week highs. The major averages are still on track for weekly losses of nearly 2%.Asian stocks mostly recovered on Thursday with the Nikkei up 0.5% helped by a positive

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finish on Wall Street overnight. Trading was relatively calm compared to previous sessions as Chinese stock exchanges closed for the commemoration of the end of World War II. European stocks closed sharply higher, with the German DAX ending up 2.7%, following comments from ECB President Mario Draghi that kept quantitative easing unchanged while raising the cap on the amount of any one issue it could buy to 33% from 25%.In other economic news, weekly jobless claims rose to 282,000. The overall U.S. July trade gap narrowed to $41.86 billion, the smallest in five months, while the U.S.-China trade deficit in July increased slightly to $31.58 billion from $31.46 billion in June, Reuters reported. In the afternoon, the Dow Jones Industrial Average traded up 17 points, or 0.11%, at 16,364. The S&P 500 traded up 2 points, or 0.11%, at 1,951, with consumer staples leading seven sectors higher and health care the greatest decliner. The Nasdaq traded down 12 points, or 0.27%, at 4,737. Gold is trading about 0.8% lower, crude oil is seen trading about 1.2% higher, and the U.S. dollar is seen trading about 0.5% higher about 1:45pm Chicago time.

Wednesday, there were 1,453 contracts traded, up from 1,255 contracts traded on Tuesday. Open interest – the number of contracts outstanding – on Wednesday decreased by 867 contracts to 10,096.

Indonesian Rice Production is Safe and Imports are Last Option, Say Agriculture Ministry Officials Sep 03, 2015

The Indonesian Agriculture Ministry Secretary General reiterated that the country's rice production is safe despite the on-going dry weather conditions due to the El Nino weather pattern.He told reporters that the Ministry is expecting a 7% y/y increase in paddy rice production to around 75.2 million tons in 2015 from around 70 million tons in 2014. He however, noted that the output may be below the 75.55 million tons estimated by the statistics agency in July. He added that some 52,000 hectares of rice crops have failed as of August due to drought and due to that around 250,000-300,000 tons may be lost this year.

The official noted that the government needs to monitor the impact of drought on rice prices and inflation. Indonesia's state weather agency is predicting that the rainy season would be delayed this year and the drought conditions would peak from October to the beginning of next year due to the El Nino pattern.

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The government has already distributed 20,000 irrigation pumps to farmers, made more than 1,000 reservoirs and dug 1,000 wells in anticipation of the El Nino this year, added the Agriculture Minister. He also reiterated that "imports are the last option".

Earlier this week, the Finance Ministry's Director General for Budgeting noted that the government has allocated about Rp 3.5 trillion (around $258 million) to support rice production during the drought conditions. Of the allocated amount, around Rp 1.5 trillion (around $105 million) would be reportedly used to ramp up the rice reserves at Bulog and the remaining Rp 2 trillion (around $153 million) will be used to help stabilize prices.

Meanwhile, analysts are predicting that Indonesia may have to import about 1.6 million tons of rice this year to maintain stocks and stabilize prices. Global rice prices are estimated to increase by 10-20% in the next few months as the El Nino induced drought is expected to lower production prospects in Asia.

USDA estimates Indonesia to produce around 36.3 million tons of rice, basis milled (around 57.17 million tons, basis paddy), and import around 1.25 million tons of rice in MY 2014-15 (October - September).

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Oryza Overnight Recap – Chicago Rough Rice Futures Weighed on Negative Grains Overnight Sep 03, 2015

Chicago rough rice futures for Nov delivery are currently paused 3 cents per cwt (about $1 per ton) lower at $11.925 per cwt (about $263 per ton) ahead of floor trading in Chicago. The other grains are seen trading lower ahead of early morning action; soybeans are currently seen trading about 0.1% lower, wheat is listed about 0.9% lower and corn is currently noted about 0.9% lower.

U.S. stock index futures indicated a higher open on Thursday, building on Wednesday's rally which saw major averages gain more than 1.5% by the close after a tumultuous week of trade so far. In Europe, stocks rallied as investors digested the European Central Bank's decision to keep interest rates unchanged. Regional stocks extended gains to rise about 2% and U.S. futures briefly more than doubled gains amid morning data releases and comments from ECB President Mario Draghi that kept quantitative easing unchanged while raising the cap on the amount of any one issue it could buy to 33% from 25%.The U.S. dollar spiked, with the euro lower near $1.11.

Weekly jobless claims rose to 282,000.

The overall U.S. July trade gap narrowed to $41.86 billion, while the U.S.-China trade deficit in July increased slightly to $31.58 billion from $31.46 billion in June, Reuters reported. The flow of top-tier releases also continues, ahead of Friday's key jobs report. The August ISM nonmanufacturing index is due at 10:00 a.m. ET. Friday's job numbers is the last monthly employment report before the U.S. Federal Reserve meets later on in the month, when an announcement on interest rates is widely anticipated. Gold is currently trading about 0.9% lower, crude oil is seen trading about 0.3% higher, and the U.S. dollar is currently trading about 0.6% higher at 8:30am Chicago time.

Oryza August 2015 Rice Market Review Sep 03, 2015

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The Oryza White Rice Index (WRI), a weighted average of global white rice export quotes, ended the month of August at about $388 per ton, down about $9 per ton from a month ago and down about $87 per ton from a year ago. Export prices and tonnage continue to remain under pressure as market support from potential El Nino supply cuts remain a distant mirage that may take a year to materialize.

Thailand Thailand 5% broken ended the month of August at about $360 per ton, down about 3% per ton from a month ago and down about 18% per ton from a year ago. The USDA forecasts Thailand's milled rice production in MY 2015-16 (January - December 2015) at about 18 million tons (about 27.3 million tons, basis paddy), down about 7% from about 19.35 million tons (about 29.35 million tons, basic paddy) in MY 2014-15 due to drought conditions that had impacted planting operations of the country's main season rice crop. Planting for the 2015-16 main rice crop planting is complete in major growing areas. According to the Ministry of Agriculture's Disaster Center report, about one million rai (about 160,000 hectares) of main rice crop had been affected by drought, particularly in the lower northern region and central plains.

Thailand's Office of the Auditor-General (OAG) has found several irregularities in the implementation of the low-cost rice sales scheme by the Public Warehouse Organization (PWO),

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according to local sources. The PWO signed contracts with six companies to carry out the sales of bagged rice. The OAG found that only one of the five companies had an experience as a retailer and some of the others were related to the first one. It also found that a single person had issued checks on behalf of all the six companies when they purchased rice from the PWO. The Thai military government has sold about 426,977 tons of stockpiled rice to 47 local traders in an open tender raising about 6.3 billion baht (about $178 million) in the most recent auction, Reuters quoted a Commerce Ministry official. There have been five auctions this year and nine auctions total since the military government took over in May 2014. The government sold about 4.4 million of rice raising about 48.6 billion baht (about $1.38 billion) from the nine auctions.

The government of Thailand is also planning to auction about 732,806 tons of stockpiled rice on September 8th 2015, Reuters quoted a statement from the Commerce Ministry.

China reportedly agreed to buy about one million tons of rice in a government-to-government (G2G) deal from Thailand. The sale is part of a December 2014 memorandum of understanding (MoU) (that China signed with Thailand in December 2014) to buy 2 million tons of rice this year.

Thailand's Supreme Court has rejected the former Prime Minister Yingluck Shinawatra's plea to allow the trial to be taken up by the Administrative Court as the case was not within jurisdiction of the Supreme Court's Criminal Division for Political Office Holders, according to local sources. The Court also denied her plea to reject additional documented evidence from 23 witnesses submitted by the prosecutors. The court adjourned the hearing to October 29th 2015.

Vietnam Vietnam 5% broken rice ended the month of August at about $330 per ton, down about 3% per ton from month ago and down about 27% per ton from a year ago. Vietnam exported about 3.492 million tons of rice in January 1 - August 20, 2015, down about 18% from about 4.26 million tons of rice exported in first eight months of 2014, according to data from the Vietnam Food Association (VFA). The average rice export price so far in this year stands at about $414 per ton (FOB), down about 4% per ton from about $431 per ton recorded during same last year.

Meanwhile, Vietnam rice exporters have signed contracts to export about 4.45 million tons of rice as at the end of July 2015, down about 9% from about 4.9 million tons contracted during the same time last year; local sources quoted an Agriculture Department official as saying.

Separately, Vietnam rice exports to Africa increased about 52% to about 525,896 tons in the first seven months of 2015 from about 345,984 tons exported during the same time last year, local sources quoted the Ministry of Industry and Trade.

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China, one of the major destinations for Vietnamese rice for the last few years, has reduced rice imports from Vietnam since the beginning of this year. Experts say China normally imports higher volume when prices are low, but this year low prices have failed to attract demand, yet.

Looking further out, both UN's Food and 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 drought-inducing El Nino pattern on Chinese production.

Vietnam has lowered the minimum export price (MEP) of its lower quality (25% broken) rice exports by about 3% to about $340 per ton from about $350 per ton in order to boost exports.

The MEP was effective from August 13, 2015.

Cambodia Persisting dry conditions have affected rice seedlings in about 185,451 hectares of paddy fields in Cambodia. According to the report sent to the Prime Minister, about 9,240 hectares of paddy fields have been completely damaged. USDA estimates Cambodia's average yield per hectare at 2.43 tons. Based on these estimates, Cambodia may have about 450,000 tons of paddy affected by flooding this year. Cambodia produced about 9 million tons of paddy rice in 2014, according to the local sources.

Separately, a rice industry specialist has advised Cambodian rice exporters to focus on diversifying markets and focus on increasing fragrant rice exports, according to Khmer Times.

Cambodia has exported about 312,317 tons of milled rice in the first seven months of 2015, up about 53% from about 204,128 tons exported during the same period last year, according to data from the Secretariat of One Window Service for Rice Export Formality.

Cambodia produces multiple varieties of jasmine rice varieties, including Phka Romdeng, Phka Romeat, Phka Rumduol but lacks a single brand name that can differentiate its jasmine rice in the international market. The government and the Cambodian Rice Federation (CRF) are working separately to come up with a brand name that could distinguish Cambodian jasmine rice from the Thai jasmine rice.

Myanmar FAO expects the ongoing floods in Myanmar to impact the volume of rice exports in 2015. FAO had earlier estimated Myanmar to export about 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. Severe floods in the northern and western Myanmar are said to have damaged about 560,000 hectares of rice fields. Meanwhile, the USDA forecasts Myanmar 2015-16 rice exports to decline by about 250,000 tons as the government would take measures to replenish stocks in the areas affected by recent floods.

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Separately, the Myanmar Rice Federation (MRF) and the government have jointly decided to ban rice exports until September 15th, when the new monsoon rice crop is expected to reach the market. However, some local sources are expecting that Myanmar may not resume rice exports until November this year.

Philippines The Philippine Statistics Agency (PSA) has estimated the country's 2015 paddy output at about 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. Meanwhile, the government of the Philippines will maintain the 20 million tons paddy output target this year despite concerns of an El Nino weather pattern, Bloomberg quoted the Agriculture Department Assistant Secretary. He said the Agriculture Department is seeking 940 million pesos ($20.3 million) in additional budget to fund programs that will mitigate the impact of El Nino. The Philippines is aiming to produce about 20.09 million tons of paddy rice in 2016, up about 6.5% from an estimated 18.86 million tons this year, according to Reuters.

Separately, the Philippine Center for Post-Harvest Development and Mechanization (PhilMech) and the Department of Science and Technology (DOST) have jointly developed a technology that helps in enhancing brown rice production in the country.

The Philippines Food Secretary has declared that there is a need to import more rice, above the already imported 750,000 tons from Vietnam and Thailand, in 2015 due to the impact of El Nino on rice crop, according to Bloomberg. He however noted that the quantum of imports is still not clear. He stated that the government is assessing the damage to rice crops due to drought and will decide on the volume of imports soon.

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 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.

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

China

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Output from China's first harvest period (early rice) has declined about 1% to about 33.69 million tons from about 34.01 million tons produced in 2014, local sources quoted the National Bureau of Statistics (NBS).

India India 5% broken rice ended the month of August at about $370 per ton, down about 5% per ton from a month ago, and down about 16% per ton from a year ago. The government of India, in its fourth advance estimates for major crops, has estimated India's rice production, milled basis, for 2014-15 crop year (July 2014 - June 2015) at about 104.8 million tons, up about 2.26 million tons or about 2.2% from its earlier estimates of about 102.54 million tons, according to a statement from the agriculture Ministry. However, the production is estimated to be down about 2% from about 106.65 million tons in 2013-14.

Separately, experts have noted that delayed planting and unevenly distributed rains across the country are likely to hamper the 2015-16 rice production though the on-going kharif rice acreage is ahead of last year as on August 21, 2015, according to local sources. Meanwhile, total rice planted area to India's 2015-16 Kharif (main) rice crop (June - December) stood at about 34.59 million hectares as of August 28, 2015, slightly up from about 34.55 million hectares planted during the same time last year, according to a press release by the Agriculture Ministry.

Analysts are expecting basmati rice prices in India to decline in the coming months as supplies from the on-going kharif crop would reach the market while there is still no confirmation over the resumption of rice imports from Iran, according to the Hindu Business Line. Basmati rice producers in India had suffered huge losses in 2014-15 (April - March) due to price falls and decline in demand after Iran imposed a temporary ban in November 2014 citing adequate stocks.

Average monthly wholesale rice prices in India increased to about Rs.2,663.31 per quintal (about $403 per ton) in August 2015, slightly up from about Rs.2,650.04 per quintal (about $416 per ton) in July 2015, and down about 18% from their year-ago levels of about Rs.3,254 per quintal (about $542 per ton).

India’s rice stocks in the central pool as of August 1, 2015 stood at about 18.6 million tons (including a milled equivalent of about 5.021 million tons of paddy), down about 24% from about 24.56 million tons recorded during the same period last year, according to data from the Food Corporation of India (FCI).

Pakistan Pakistan 5% broken rice ended the month of August at about $325 per ton, down about 7% per ton from a month ago and down about 26% per ton from a year ago. Pakistan exported about

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155,570 tons of rice (including basmati and non-basmati) in the first month of FY 2015-16 (July - June), down about 14% from about 181,398 tons exported during the same period in FY 201415, according to provisional data from the Pakistan Bureau of Statistics (PBS). In terms of value, Pakistan's earned about $91 million in July 2015, down about 27% from about $125 million last year. Meanwhile, Pakistan exported about 3.93 million tons of rice in FY 2014-15 (July - June), up about 6% from about 3.72 million tons in 2013-14, according to the National Space Agency of Pakistan (SUPARCO). However, exports declined by about 6% in terms of earnings due to a decline in global prices of rice.

Separately, the Federal Committee on Agriculture (FCA) of Pakistan has reportedly fixed the 2015- 16 (July - June) milled rice production target at about 6.902 million tons (about 10.21 million tons, basis paddy) from about 2.836 million hectares. It is targeting a yield of about 2.434 tons per hectare in 2015-16.

The Agriculture Policy Institute (API) under the Ministry of National Food Security & Research of Pakistan suggested the government to intervene in the market, based on a survey of cost of production and import/export parity prices. It suggested that the government could consider a paddy support price of about Rs.1, 800 per 40 kilograms (about $435 per ton) for basmati and about Rs.850 per 40 kilograms (about $205) for non-basmati rice.

Iran has agreed to lift the ban on rice imports from Pakistan in the aftermath of removal of international sanctions, according to local sources. The imports are to be reinstated from October 2015.

Bangladesh The government of Bangladesh has extended the time limit for aromatic rice exports until December 31, 2015 in order to enhance the share of the country's brands in foreign markets, according to local sources. However, some exporters expressed concern that the government should have extended the time limit until June 30, 2016 to strengthen exports.

Separately, Bangladesh rice farmers have been advised to preserve as well as increase production of indigenous rice varieties such as 'Parija' through modern technologies, according to local sources.

Indonesia FAO estimates Indonesia 2015-16 (April - March) rice imports to decline about 10% y/y to about 900,000 tons due to a favorable production outlook for the 2015 rice production as well as selfsufficiency policies advocated by the government. The agency estimates Indonesia's 2015 aggregate paddy rice production at about 75.6 million tons, up about 7% from last year.

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Meanwhile, on-going drought conditions are expected to reduce Indonesia's 2015 paddy rice production by about 800,000 tons, down from an estimated 75.5 million tons, according to Bloomberg. The country's statistics agency is estimating 2015 paddy rice output to reach about 75.55 million tons (about 47.6 million tons, basis milled) in 2015. The government is keen on achieving self-sufficiency in rice production and stop imports over the next few years.

The government of Indonesia has allocated about Rp 3.5 trillion (about $258 million) to support rice production during the drought conditions, local sources quoted the Finance Ministry's Director General for Budgeting. Separately, Indonesia's Public Works and Public Housing Minister has assured adequate water supplies for the 2015-16 rice planting season, which will last from September to January, according to local sources.

The government of Indonesia has fixed the 2016 paddy rice target at about 76.23 million tons (about 48 million tons, basis milled), Bloomberg quoted a statement from the Finance Ministry.

The Indonesian government is also planning to expand rice fields by about 60,000 hectares in 2016. It is also reportedly planning to improve irrigation facilities in about 500,000 hectares of farm lands, including rice.

South & Central America Brazil 5% broken rice ended the month of August at about $500 per ton, unchanged from a month ago and down about 18% per ton from a year ago. Brazil’s National Grains Supply Company (Conab) has forecasted the country's 2014-15 paddy rice production at about 12.432 million tons (about 8.45 million tons, basis milled), up about 2.6% from about 12.121 million tons (about 8.24 million tons, basis milled) in 2013-14, and slightly down from its July forecast of about 12.499 million tons. Average rice yield in Brazil in 2014-15 is projected at about 5.45 tons per hectare, up about 6.6% from about 5.11 tons per hectare recorded in the previous year, and slightly up from its July forecast of about 5.43 tons per hectare.

The government of Guyana is planning to implement a rice-marketing plan, which aims at improving productivity, reducing production costs, enhancing operational efficiency in rice mills and development of value-added products for export, local sources quoted the Agriculture Minister. The Minister said that rice is an import staple in the country contributing to about 61% of agricultural GDP and supporting at least 10% of the population as well as the highest foreign exchange earning product (accounting for about 21.3% of export earnings) in Guyana. The country's per capita rice consumption is estimated at about 50 kilograms, said the Minister.

U.S. U.S. 4% broken rice ended the month of August at about $490 per ton, up about 3% per ton from a month ago and down about 9% per ton from a year ago. The USDA estimates U.S. 2015-16 all

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rice supplies at about 12.63 million tons, unchanged from its last month's forecast, despite expected lower production. It expects higher imports and stocks would compensate for lower production. The agency estimates U.S. all rice production (milled basis) at about 9.3 million tons, down from last month's estimate of 9.39 million tons due to a slight reduction in yield. It estimates 2015-16 all rice use at about 10.7 million tons, down from last month's estimates of about 10.89 million tons due to an estimated decline in domestic & residual use since exports are estimated to be lower from last month. The USDA estimates 2015-16 all rice exports at about 4.85 million tons, down from last month's estimates of about 4.99 million tons, and the decline is expected in milled rice exports.

Rice output in the U.S. state of Louisiana is expected to be below last two years' output, according to the Director of the LSU AgCenter Rice Research Station. The official says that heavy rains between March and May as well as cloudy skies thereafter are main reasons for low yields. Louisiana is the third largest rice producing state in the U.S. after Arkansas and California and accounts for about 15% of the total U.S. rice production.

Africa The government of Mozambique is planning to introduce surcharge on imports of rice beans, meat and eggs in order to encourage domestic production, local sources quoted the Minister of Agriculture and Food Security. Recently, quoted the National Director of Agriculture and Forestry noted that Mozambique has about 900,000 hectares of land for potential rice production but only 310,000 is being used currently. He added that this underutilization of production capacity in the country is leading to rice deficit and forcing the government to import rice.

The Head of the National Office of Rice Growing Department in Ivory Coast has urged the government to develop irrigation facilities in the country to help boost rice production in the country, China Post quoted local sources. Currently, 85% of the Ivorian rice relies on rain and only one dam caters to rice fields in the northern region, he says. Ivory Coast produces only 60% of rice needed for annual domestic consumption of about 2.3 million tons and imports the rest.

The Federal Government of Nigeria is planning to review the rice import policy in order to increase productivity, raise incomes of farmers as well as promote exports, the Permanent Secretary of the Federal Ministry of Agriculture and Rural Development (FMARD) was quoted.

The Nigerian government has targeted to achieve self-sufficiency in rice production and end imports by 2015.

Europe The European Union's (EU) imported about 1.143 million tons of rice in the first eleven months of the crop year 2014-15 (September - August), up about 13% from about 1.014 million tons last

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year. The European Commission (EC) says the EU rice imports have reached record highs after six years when they reached about 1.066 million tons in 2007-08. Meanwhile, the EU rice imports from the Least Developed Countries (LDCs) of Asia such as Cambodia and Myanmar under the Everything But Arms (EBA) Agreement have reached about 314,265 tons in the first eleven months of the crop year 2014-15 (September 2014 - August 2015), up about 12% from about 281,000 tons imported during the same period last year, according to data from the EC. Meanwhile, the EU and the Vietnam have signed a bilateral free trade agreement (FTA) after two-and-half years of intense talks, according to local sources. Under the agreement, the EU can import 80,000 tons annually from Vietnam at zero percent import duty.

Other Markets Planting for Nepal 2015-16 rice crop is lagging by 3% over last year due to unfavorable monsoon, local sources quoted the Ministry of Agricultural Development (MoAD). According to data from the MoAD, rice planting area stood at about 1.487 million hectares as of August 24, 2015, down 3% from about 1.533 million hectares planted last year. The current acreage accounts for about 87% of the country's total acreage. Paddy contributes to 20% to the total agricultural production in Nepal and about 7% of the country's GDP. The Agriculture Ministry estimates Paddy production in 2014-15 to decline about 5.71% to about 4.78 million tons from about 5.04 million tons in 2013-14 due to a late monsoon and untimely rainfall.

Meanwhile, Production shortfalls and expensive imports have been pushing up domestic rice prices in the country, according to local sources. The price of most commonly used rice variety Jira Masino have increased to about Rs.1,450-1,850 (about $559 - $713) per 25 kilogram bag from about Rs.1,350-1,750 (about $520 - $674) per 25 kilogram bag, according to local sources.

They say traders of branded rice have also hiked prices in the recent past. Nepal has imported rice worth Rs.24.75 billion (about $231 million) in the fiscal year 2014-15 (August - July), up about 43% from about Rs.17.26 billion (about $161 million) during FY 2013-14, local sources quoted the Nepal Rastra Bank (NRB).

The government of Iran is expecting 2015-16 (April - March) rice production, basis milled, at about 2 million tons, Iran English Radio quoted the Secretary of Iran's Government Rice Association (saying on Press TV). The main rice crop season starts in April and ends in September.

The Kuwait Fund for Arab Economic Development (KFAED) has signed an agreement with the government of Chad to provide about 4 million Kuwaiti Dinars (about $13.6 million) to help boost rice production in Chad, according to local sources.

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The government of Egypt has planned to ban rice exports from September 1, 2015 in order to fulfil domestic demand; however, on September 3rd it was reported that the government will allow the export of one million tons. While Egypt is expected to produce about 2.7 million tons of white rice in 2015-16, its annual consumption demand is estimated at about 3.6 million tons.

The Ministry reportedly said in a statement that the demand gap would be fulfilled from the existing stocks.

Research and Scientific Development: The International Rice Research Institute (IRRI) and the Africa Rice Center (AfriceRice) have jointly released two cold-tolerant rice varieties in Madagascar under the IRRI's Stress-tolerant Rice for Africa and South Asia (STRASA) program. http://oryza.com/23449/irri-introduces-two-cold-tolerant-rice-varieties-madagascar Researchers from the Thailand Development Research (TDRI) have recommended to the government to set up a 'Rice Market Development Institute' to enhance rice related research. http://oryza.com/23441/independent-rice-market-development-institute-will-enhance-exportcompetitiveness-thailand-say Researchers from Japan's National Food Research Institute (NFRI) have developed a jelly like substance called "rice gel" that can be used in the processing food industry. http://oryza.com/23522/rice-gel-potential-new-ingredient-processed-foods-industry Chinese researchers have found that by modifying a gene called BG1 (Big Grain 1) in rice plants, the length and weight of the rice grains can be significantly increased. http://oryza.com/23547/researchers-identify-gene-enhance-length-and-weight-rice-grains The researchers of the Temperate Rice Research Consortium (TRRC) in Italy are organizing a meeting called "Perspectives and Solutions for Competitive Rice Growing" in the Italian Rice Research Center, in Castello d'Agogna (Pavia), on September 10, 2015. http://oryza.com/23578/italy-rice-researchers-discuss-innovations-and-problems-rice-cultivation Researchers at the UK's John Innes Centre have found means to increase rice plants' resistance to pathogens by understanding how rice plants detect pathogens.

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http://oryza.com/23606/rice-plants-resistance-pathogens-can-be-enhanced-using%E2%80%98gene-gene%E2%80%99-model-say-researchers August Tenders: The Mauritius state purchasing agency issued an international tender to purchase up to 6,000 tons of long-grain white rice from optional origins. http://oryza.com/23523/mauritius-tenders-buy-6000-tons-white-rice The government of Liberia invited tenders from eligible and qualified Liberian owned businesses for the supply of Dry Ration (rice) during 2015-16, according to a statement by the Ministry of National Defense (MoD). http://oryza.com/23579/liberia-opens-tenders-supply-dry-ration-rice-2015-16 Iraq issued an international tender to purchase about 30,000 tons of rice from the U.S., Uruguay, Argentina, Brazil and India. http://oryza.com/23576/iraq-seeks-purchase-30000-tons-rice-international-tenders

Oryza U.S. Rough Rice Recap - New Sale to Venezuela Helps Support Prices Sep 03, 2015

The U.S. cash market was firmer today rallying on the news of yet another sale of long grain paddy to Venezuela and anticipation of more milled rice business to Iraq.

Analyst note that without the recent increase in export demand prices would have likely remained depressed however others warn that these higher prices are beginning to turn off some foreign buyers.

In the meantime, the USDA reported that cumulative net export sales for the week that ended on August 27th, totaled 66,000 tons, an increase of 97% from the previous week.

Increases were reported for the following destinations including: 29,500 tons to Venezuela, 19,600 tons to Mexico, 7,200 tons to unknown destinations, and 3,000 tons to Panama, while decreases of 1,300 tons, 200 tons, and 100 tons were reported for Guatemala, Costa Rica, and Russia respectively.

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U.S. rice exporters shipped 156,400 tons, and increase of 74% from the previous week, with the primary destinations including: 59,500 tons to Venezuela, 31,500 tons to Iraq, 24,800 tons to Mexico, 12,000 tons to Japan, and 6,800 tons to Haiti.

Real Rice Ban Never Existed in Iran, Says Indian Grains Analyst Sep 03, 2015

Though Iran has been claiming that rice import from India was banned in 2014 due to their own surplus availability owing to local supplies or excess imports in 2013, they have created a system where by only select private parties have been supported with import licencing. This has existed for the last 15-16 months. Call it canalised import through privatisation, though Government Trading Corporation of Iran (GTC) too remains another conduit of import whenever required.

Thus it is very difficult to conclude when the ban is imposed or lifted. Food articles were never sanctioned under US/UN orders. In fact REAL ban never existed in Iran.

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The same may be true for Pakistan as well and small containerised supplies of Pakistani rice may be going to Iran under such arrangements during sanctions as well. India had an advantage of rupee payment from 2011 till today—which will cease soon.

However Indian Pusa 1121 PB will continue to get overriding priority by Iranian buyers over Pakistan origin, so long as Indian prices are competitive and these will be. Pakistan is ideologically a nation with Sunni Muslim majority, while Iran is the leader of world’s Shia movement. Politically too, Pakistan will not be favoured in the trade on these grounds.

Views by Mr.Tejinder Narang

USDA Post Estimates Myanmar 2015 Rice Exports to Decline 5% y/y to 1.6 Million Tons Sep 03, 2015

USDA Post estimates Myanmar 2015 rice exports to decline to around 1.6 million tons from an estimated 1.688 million tons in 2014 based on reports from the trade sources.The decline is attributed to the imposition of a temporary ban on exports in the first week of August after floods damaged about 250,000 hectares of rice fields in the northern and western regions of the country leading to a surge in the domestic rice prices.The Post estimates that around 250,000-300,000 tons of exports have been impacted due to the imposition of the ban.The government has been supporting farmers in the flood-affected area to replant their crops. If rice cannot be replanted, the government is planning to help farmers plant other crops such as beans or pulses. The Post estimates Myanmar's MY 2015-16 (January - December 2016) milled rice production to decline about 3% to around 12.2 million tons from an estimated 12.6 million tons in MY 2014-15.

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