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March 02, 2015

Daily Exclusive ORYZA Rice E-Newsletter


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Volume 5, Issue I
Daily Exclusive

ORYZA Rice
Newsletter

Daily Exclusive ORYZA Rice E-Newsletter


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Vietnam Exports About 356,012 Tons Rice


During January 1 February 25, 2015

Feb 27, 2015

Vietnam exported about 356,012 tons of rice in January 1 - February 25, 2015, down about 44%
from about 637,756 million tons of rice exported in in first two months of 2014, according to
data from the Vietnam Food Association (VFA). Average rice export price so far in this year
stands at about $446 per ton (FOB), up about 3.7% per ton from same time last year.During
February 1- 25, 2015, Vietnam exported about 135,623 tons of rice, down about 59% from about
330,501 tons rice exported in full month of February 2014, and down about 38% from about
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220,388 tons rice exported in full month of January 2015. Average export prices so far in
February stand at about $441 per ton, down about 1% from a year ago, and down about 2% per
ton from a month ago.

Thailand Plans to Allocate $200 Million to


Support Rice Farmers' Cooperatives
Feb 27, 2015

Thailand's Ministry of Agriculture and Cooperatives is planning to allocate about 6.5 billion baht
(around $200 million) to support rice farmers' cooperatives to improve their business
capabilities, according to local sources.The Ministry sources noted that the new fund would be
used to support rice growers' cooperatives in 19 provinces and help them collect and process
more paddy. The Agriculture Minister was quoted as saying that the Ministry aims to help rice
growers' cooperative increase their individual paddy collection capabilities to around 948,000
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tons by 2019, more than double of about 450,000 tons in 2014, and help them increase their rice
processing capabilities by two-and-half times to around 134,000 tons during the same period.

The Minister noted that last year, members of rice farmers' cooperatives across the country grew
rice in about 4.16 million hectares of land accounting for about 48% of the total paddy acreage in
the country. They contributed to about 11.3 million tons of paddy, about 39% of the national
output.The current plan is understood to be part of the governments idea to improve the Thai
rice sector and help it regain its lost charm in the international arena. Its "rice strategy" is aimed
at improving production, marketing and quality of Thai rice with very less market intervention.

Vietnam Rice Quotes Up; Other Asia Rice


Quotes Unchanged Today
Feb 27, 2015

Vietnam rice sellers increased most of their quotes by about $5 - $15 per ton today. Other Asia
rice sellers kept their quotes mostly unchanged.
5% Broken Rice
Thailand 5% rice is quoted at around $405 - $415 per ton, about $40 per ton premium on
Vietnam 5% rice shown at around $365 - $375 per ton, up about $5 per ton from yesterday. India
5% rice is quoted at around $390 - $400 per ton, about $55 per ton premium on Pakistan 5% rice
quoted at around $335 - $345 per ton.
25% Broken Rice
Thailand 25% rice is quoted at around $365 - $375 per ton, about $25 per ton premium on
Vietnam 25% rice shown at around $340- $350 per ton, up about $5per ton from yesterday. India
25% rice is quoted at around $355 - $365, about $50 per ton premium on Pakistan 25% rice
quoted at around $305 - $315 per ton.
Parboiled Rice
Thailand parboiled rice is quoted at around $405 - $415 per ton. India parboiled rice is quoted at
around $385 - $395 per ton, on par with Pakistan parboiled rice quoted at around $385 - $395 per
ton.
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100% Broken Rice
Thailand broken rice, A1 Super, is quoted at around $320 - $330 per ton, about $10 per ton
premium on Vietnam 100% broken rice shown at around $310 - $320 per ton, up about $5 per
ton from yesterday. India's 100% broken rice is shown at around $280 - $290 per ton, about $5
per ton premium on Pakistan broken sortexed rice quoted at around $275 - $285 per ton.

TREA Official Foresees Poor Response for


March 5 Auction

Feb 27, 2015

Thailand's upcoming auction for about one million tons of rice on March 5 is likely to receive a
poor response amid greater supply and price competition, according to the Honorary President of
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the Thai Rice Exporters Association (TREA).Local sources quoted him as saying that with
Vietnamese rice prices ruling about 13% below the Thai rice prices, they are expecting most of
the rice importers to adopt a wait and watch policy and thereby delay their purchases. Currently,
export prices of Thai 5% rice stand at around $405 per ton compared to the Viet 5% rice quoted
at around $360 per ton.
He noted that the government may not be able to sell more than 400,000 tons of rice of about
1,008,837 tons to be auctioned next week.According to the Director-General of the Foreign
Trade Department, the government plans to auction about 762,700 tons of 5% white rice and
about 246,137 tons of 10% white rice, 15% white rice, 25% white rice and 10% white glutinous
rice. The auctions would be taking place at 124 state warehouses in 33 provinces and names of
the qualified bidders are expected to be announced on next Friday.The government sold about
500,000 tons of rice of the one million tons auctioned on January 29, 2015.The Thai government
is poised to sell about 10 million tons of the stockpiled rice this year and about 7 million tons
next year. This year's sales are understood to consist of premium-grade (60%) and sub-standard
rice (40%).

Weekly Recap: Oryza White Rice Index


Dragged Lower amid Weaker Quotes in the
U.S., India, and Pakistan
Feb 27, 2015

The Oryza White Rice Index (WRI), a weighted average of global white rice export quotes,
ended the week at about $419 per ton, down about $1 per ton from a week ago, down about $4
per ton from a month ago and down about $42 per ton from a year ago.
Thailand
Thailand 5% broken rice is today shown at about $405 per ton, unchanged from a week and a
month ago and down about $25 per ton from a year ago.
The government plans to auction one million tons of rice on March 6, but officials from the
Thailand Exporters Association (TREA) are pessimistic about the upcoming auction, pointing
out that lower prices in Vietnam are causing Thailand rice exporters to be cautious about buying
more rice at uncompetitive levels. Currently, Vietnam rice is quoted around $30 less per ton than
Thailand rice.

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The Thai Finance Ministry estimates that total losses from rice subsidy schemes in the period
2004-2014 are about 700 billion baht (about $21.5 billion).
Thailands Ministry of Agriculture and Cooperatives plans to allocate about 6.5 billion baht
(about $200 million) to support rice farmers cooperatives improve their business capabilities.
The Philippines will import 500,000 tons of rice from Thailand and Vietnam based on the
results of a tender that closed on February 27.
Vietnam
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Vietnam 5% broken rice is today shown at about $370 per ton, up about $10 per ton from a week
ago, up about $5 per ton from a month ago and down about $30 per ton from a year ago.
Vietnam exported about 356,012 tons of rice during the period January 1-February 25, a decrease
of about 44% from the first two months of 2014. The average rice export price so far this year is
about $446 per ton, up about 3.7% from the same time last year.
India
India 5% broken rice is today shown at about $395 per ton, unchanged from a week ago, down
about $5 per ton from a month ago and down about $25 per ton from a year ago.
Despite an increase in January (after two consecutive months of declining prices), average
wholesale rice prices in India have once again declined in February, due to increased supplies
and declining export demand.
The government may consider changing the food subsidy program in the 2014-15 budget, in
efforts to curb losses in the public distribution system and switch to cash transfers to
beneficiaries in lieu of subsidized grains. Meanwhile, the government of India plans to end the
levy rice procurement system starting in the 2015-16 (October-September) marketing season in
an effort to improve prices for farmers. Recently about 5 million tons of milled rice were
procured annually under the program but local sources say farmers did not sufficiently benefit
from these purchases and the program was besotted by waste and mismanagement. Major rice
producing states such as Punjab and Haryana had abolished the levy rice system two years back
but it still exists in the states of Uttar Pradesh, Uttarakhand, Andhra Pradesh, Telangana and
West Bengal.
The government of India stated that it will not consider recommendations of the National
Commission on Farmers to increase the minimum support price (MSP) on rice and wheat to at
least 50% more than the weighted average cost of production.
Rice farmers in the state of Punjab are being encouraged to switch to crops other than paddy,
following warnings by analysts that continuous planting of paddy is leading to faster depletion of
groundwater and decreased soil quality.
India has been seeking legal protection for its basmati rice, but may face a delay since the
Intellectual Property Appellate Board (IPAB) has accepted the petition from Pakistans Basmati
Growers Association (BGA), which opposes granting a Geographical Indications tag for Indias
basmati rice.

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The UNs Food and Agricultural Organization has forecasted Indias 2015 rice exports will
decline about 20% from 2014 to 8.8 million tons, mostly due to a lower harvest from the 2014
Kharif rice crop and decreased demand from Iran, a main basmati importer.
Pakistan
Pakistan 5% broken rice is today shown at about $340 per ton, down about $10 per ton from a
week ago, down about $25 per ton from a month ago and down about $60 per ton from a year
ago.
Paddy rice production in FY 2014-15 (July-June) is expected to decline about 19% from last year
to about 8.437 million tons, due to floods.
Rice exporters in the country have urged the government to negotiate with the government of
Malaysia in order to remove quota restrictions on rice imports from Pakistan.
Central & South America
Brazil 5% broken rice is today shown at about $550 per ton, unchanged from a week ago, up
about $10 per ton from a month ago and down about $115 per ton from a year ago.
The Brazilian paddy rice index maintained by the Center for Advanced Studies on Applied
Economics (CEPEA) reached around 36.78 real per 50 kilograms as of February 23, 2015, down
about 2% from around 37.49 real per 50 kilograms recorded on February 17, 2015. In terms of
USD per ton, the index reached around $255.4 per ton on February 23, 2015, down about 3.6%
from around $255.4 per ton recorded on February 17, 2015.
The government of Guyana is trying to find lucrative markets for its rice but is facing challenges
in doing so, according to the countrys President.
U.S.
U.S. 4% broken rice is today shown at about $480 per ton, down about $20 per ton from a week
ago and a month ago and down about $100 per ton from a year ago.
Rice producers in Missouri have acquired permission from the U.S. Department of Commerce to
ship one container of sample rice to Cuba, following the lift of the 50-year long trade embargo
with the Caribbean nation. The state plans to send 40,000 pounds of rough rice in this container,
and they hope to get approval to send a second 40,000-pound container shortly.

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After a month-long slowdown, U.S. West Coast ports are resuming work as problems between
dock workers and terminal operators seems to be over with the signing of a new contract earlier
this week. The slowdown has negatively affected Californias agriculture sector, including the
rice sector, which lost about half the regular volume of exports in December and January
according to the President and CEO of the California Rice Commission.
Chicago rough rice futures for March delivery dropped this week, opening at the week-high of
$10.790 per cwt (about $238 per ton) before dropping steadily throughout the week. The low
this week was on Wednesday, when futures dropped to $10.265 per cwt (about $226 per ton)
before closing slightly up on Friday at $10.480 per cwt (about $231 per ton).
The U.S. cash market was softer this week, falling in line with the futures market. Buyer and
seller price ideas continue to be about $0.50-$1.00 per cwt (about $11-$22 per ton) apart.
Other Markets
Indonesia plans to replace subsidized rice for the poor with e-money, and the Bank of Indonesia
has criticized the change. Elevated rice prices in Indonesia are creating concerns. The
government is investigating whether illegal stockpiling and reselling are key reasons for the
significant rice price hikes in the country .The President of the country, Joko Widodo, has
formally begun operations for distributing Bulog rice in the market, with plans to distribute over
300,000 tons of rice across the country.
Cambodia 5% broken rice is today shown at about $435 per ton, unchanged from a week ago,
down about $5 per ton from a month ago and down about $20 per ton from a year ago.
The Myanmar Rice Federation has signed a contract with Chinas state-run China National
Cereals, Oils, and Foodstuffs Corporation agreeing to export 100,000 tons of rice to China in
separate monthly shipments.
In 2014, China imported about 2.56 million tons of rice, an increase of about 13% from 2013,
according to the China Customs General Administration.
South Koreas government has announced that it will escalate efforts to increase rice exports as
the country anticipates an oversupply of rice due to its own production and mandatory imports
under WTO regulations. Efforts will develop and protect the local industry and improve
farmers lifestyles. Meanwhile, South Koreas state-run Agro Fisheries & Food Trade
Corporation has purchased 44,000 tons of brown rice of the U.S. and Chinese origins for delivery
by May 31.

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Milled rice production in Nigeria reached about 2.9 million tons in 2014, an increase of about
52% from 2013, according to the countrys Agriculture Minister.
The European Union has imported around 442,433 tons of milled rice from non-EU nations
during the period from September 1, 2014 to February 17, 2015, an increase of about 2% from
the same period last year.
The United Kingdom has called for new regulations from the EU which will allow the country
to conduct trials and grow Genetically Modified crops.
In Italy, two new rice varieties have been enlisted after the decree signed by the government on
January 23: they are CL15 and Risrus, bringing the total of approved varieties in Italy to more
than 150.
The government of Lao Peoples Democratic Republic (PDR) plans to strengthen sanitary and
phytosanitary measures as part of its efforts to boost rice exports.

Philippines Embarks on Green Rice


Mechanization
Feb 27, 2015

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Bio fuel made from sugar molasses and sweet sorghum can serve as a good source of energy to
run rice farming machinery such as threshers, dryers as well as small rice mills, according to a
notice on the Philippines government website.The Philippines is planning to set up a bio ethanol
distillation facility in Infanta, Quezon to fill the energy demand in rice-based communities,
according to the notice. The facility is said to produce energy without negatively impacting the
environment as it would use eco-friendly inputs. It can produce hydrous bio ethanol (95%
alcohol) that can be used to run small farm machines, according to the lead inventor of the
technology.
He noted that rice production can be increased with improved mechanization in various
processes right from land preparation to post-harvest. The bio ethanol produced from the new
facility can produce desired results in an eco-friendly manner as well as at less cost.The former
PhilRice Executive Director, who launched the technology said, "We are aware of the pressing
need for alternative fuel to run farm engines and we want to manufacture machines for farming
that do not depend on fossil fuel."Three bio ethanol facilities are planned over the next three
years after identifying the appropriate model that can produce bio fuel at competitive prices. A
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pilot testing of the facility is expected to be conducted this year on pumps, transport vehicles,
tricycles and micro mills.The project is jointly implemented by the Mariano Marcos State
University, Philippine Rice Research Institute, the local government unit of UP Los Baos.

South Korea Buys 44,000 Tons of Rice from


U.S. and China in Tender
Feb 27, 2015

South Korea's state run Agro Fisheries & Food Trade Corporation (KAFTC) has purchased
44,000 tons of brown rice of the U.S. and Chinese origins for delivery by May 31, 2015,
according to a statement on its website.KAFTC purchased 22,000 tons of brown rice of U.S.
origin for about $856 per ton and 22,000 of brown rice of Chinese origin for about $870 per
ton.The international tender for the above qualities of rice closed on February 25, 2015 and
electronic bidding for the same took place on February 26, 2015.KAFTC bought 35,000 tons of
non-glutinous rice from Vietnam and the U.S. in tenders on February 10, 2015.

Philippines Decides to Import 500,000 Tons


of Rice from Thailand and Vietnam
Feb 27, 2015

The government of the Philippines accepted bids from Thailand and Vietnam for the import of
500,000 tons as the prices offered
by both the nations were lower
than the price of $434 per ton
specified by the National Food
Authority (NFA), according to
Bloomberg.While
Thailand
offered to supply a 100,000 tons
of rice at about $441 per tons and
another 100,000 tons at about
$421 per ton, Vietnam offered to

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supply 250,000 tons at $442 per ton and another 250,000 tons at $424.5 per ton. However, since
Vietnam agreed to supply rice at Thailand's quote, the NFA allowed Vietnam to supply the
remaining quantity of rice (300,000 tons).
Cambodia, which was also eligible to participate in the bidding reportedly didn't submit any bids.
The Philippine government allotted around $217.2 million for total 500,000 tons import, which
are meant to boost stocks ahead of the lean season (July - September) as well as curb price hikes

Government of India May Consider Change


of Food Subsidy Program in 2014-15 Budget
Feb 27, 2015

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The government of India is likely to change the food subsidy regime to curb losses in the public
distribution of main dietary staples rice and wheat to the poor under the National Food Security
Law, according to a key economic report released by the Ministry of Finance.The Economic
Survey estimates the government's food subsidy bill to more than double to around Rs.1.15
trillion (around $18.6 billion) in the fiscal year 2014-15 (April - March) from around Rs.584
billion (around $9.5 billion) in 2009-10.
The government's food security program aims to provide subsidized rice and wheat to around 65
million poor families through a network of 450,000 ration shops.However, the government has
been entailing an annual loss of about Rs.184 billion ($2.98 billion) from the program due to
mismanagement, loss of grains or mishandling of the grains by intermediaries. Therefore, a High
Level Committee for Restructuring of Food Corporation of India (FCI) recommended several
measures including cash transfers to beneficiaries of the in lieu of subsidized grains to stop
leakages of grains to a major extent.
The government is expected to take a decision on this issue.However, experts opine that
implementing direct cash transfers may not be so easy as many of families still do not maintain
bank accounts in India.The government is also expected to review the grain procurement policies
of some states, which have been paying prices over and above the minimum support price (MSP)
for garnering grains for their PDS, but have been imposing high levies on the sales. The
government is also expected to review stocking and distribution policies of food grains in
accordance with the recommendations of the Committee for FCI Restructuring.

Oryza Afternoon Recap - Chicago Rough


Rice Futures Make Last Minute Surge on
Support from Rallying Wheat and Corn
Feb 27, 2015

Chicago rough rice futures for May delivery settled 9 cents per cwt (about $2 per ton) higher at
$10.745 per cwt (about $237 per ton). The other grains closed higher led by a sharp recovery in
wheat; Soybeans closed about 0.5% higher at $10.3175 per bushel; wheat finished about 2.5%
higher at $5.1300 per bushel, and corn finished the day about 1.2% higher at $3.9325 per
bushel.U.S. stocks traded mildly lower on Friday, February's last trading day, amid domestic
economic reports and slight oil gains.

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The S&P 500 attempted to hold higher, with consumer staples and telecommunications leading
advancers and health care the greatest decliner. Friday is the last trading day of February, during
which stocks performed much better than in January. Both the S&P 500 and Dow Jones
industrial average hit new records for the first time in 2015 in February and the major indices are
up about 2 percent or more for the year. Fourth-quarter GDP was revised to show growth of
2.2%. Analysts polled by Reuters expect GDP growth of 2.1%, after a final reading of 5.0% in
the third quarter. The Chicago Purchasing Managers Index came in at posted 45.8, the lowest
since July 2009. Which has been partly attributed the contraction level, not seen since April
2013, to the West Coast port strike. Consumer sentiment came in at 95.4 for February, beating
expectations but down from January's 98.1. The Dow Jones Industrial Average traded down 32
points, or 0.18%, to 18,181. The S&P 500 traded down 1.5 points, or 0.07%, to 2,109, with
consumer staples leading three sectors higher and health care the greatest laggard. The Nasdaq
traded down about 16 points, or 0.33%, to 4,971. Gold is trading about 0.3% higher, crude oil is
seen trading about 2% higher, and the U.S. dollar is seen trading about 0.1% lower at
about 1:00pm Chicago time.Thursday, there were 1,908 contracts traded, down from 2,098
contracts traded on Wednesday. Open interest the number of contracts outstanding on
Thursday increased by 87 contracts to 9,208.

Oryza U.S. Rough Rice Recap - Unchanged


Prices as Winter Weather Hampers
Movement
Feb 27, 2015

The U.S. cash market was unchanged today with little trade activity to report and buyer and
seller prices ideas remain at odds. Sellers continue to wait, hoping for prices to recover while
most buyers sit on the sidelines only buying when they absolutely have to.Meanwhile, winter
weather continues to hamper the movement of rice in the U.S. mid-South which is only helping
to quiet a market that is nearly dead.

FAO Forecasts India 2015 Rice Exports to


Decline 20% y/y to 8.8 Million Tons
Feb 27, 2015

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The UN's Food and Agriculture Organization (FAO) has forecasted India's 2015 rice exports to
decline about 20% to around 8.8 million tons from around 10.9 million tons exported in 2014
due to an estimated lower harvest from the 2014 Kharif rice crop (June - December) as well as a
reduction in demand from its main basmati rice importer Iran, which temporarily banned rice

imports citing excess stocks as a reason.


The FAO estimates the total paddy rice production for 2014-15 (including that from Kharif and
ongoing Rabi seasons) at around 154.6 million tons (around 103.6 million tons, basis milled),
down about 3% from last year's record output of about 160 million tons (around 102 million
tons, basis milled). It forecasts 2014 Kharif paddy rice production at around 134.3 million tons
(around 90 million tons, basis milled), down about 2% from last year's record 137 million tons
(around 93 million tons, basis milled).rvesting for the 2014 main Kharif rice crop was completed
in January and planting for secondary Rabi season rice crop (October - May) was completed in
December. Reduced water levels in major reservoirs due to weak monsoons coupled with belowaverage rains in October and November over most of the country delayed planting for winter rice
crop.Rice prices in January remained stable in most markets as downward pressure from low
trade activity had been offset by the ongoing government's procurement program. The
government aims to procure around 30.05 of rice in the 2014-15 marketing season (October September).
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