27th february 2015 daily exclusive oryza rice e newsletter by riceplus magazine

Daily Exclusive ORYZA Rice E-Newsletter www.ricepluss.com

1

Daily Exclusive ORYZA Rice

Newsletter

Volume 5, Issue I

February 27, 2015


2

UK Seeks New GM Crop Regulations from

EU

Feb 26, 2015

The United Kingdom has

moved a step forward

showcasing its interest

for Genetically Modified

(GM) crops. The EU

state has called for new

regulations, which

apparently allow it to

conduct trials and grow

GM crops. The

Parliament’s Science and

Technology Committee

has released a report on

the European Union's

(EU) existing GM regulations saying there is a need for a new trait-based system for regulating

new crop breeding technologies as the existing regulations prevent GM crops to be grown in the

UK despite being passed rigorous safety testing procedures, according to a press release on the

UK Parliament website.

The report indentifies three major flaws in the EU regulatory system for GM crops. First, the

current regulations are based on assumption that GM crops inherently pose greater risk that

traditional crops and fail to recognize the characteristics displayed by the GM crops in the field.

Second, they fail to assess the risks posed by the GM crops in relations with the benefits to the

producer, consumer and the environment leading to a one-sided judgement on their effects to the

economy, society and environment. Third, the current regulations prevent EU States from taking

their own decision on GM crops.

Due to this member states who basically oppose GM crops have been trying to influence other

members over the adoption of GM crops.The report concluded that the "Precautionary

Principle", which controls the import and cultivation of GM crops, is no longer valid as there has

been no significant evidence that there are potentially dangerous effects on the environment,


3

human, animal and plant health from GM crops. Continued application of this principle is acting

as a barrier to progress in this field, stated the report

Philippines to Conduct Auction for 500,000

Tons of Rice on February 27, 2015

Feb 26, 2015

The Philippines will conduct an auction for 500,000 tons of rice on

February 27, 2015, Bloomberg quoted the Philippine Presidential

Adviser for Food Security as saying.The three countries - Thailand,

Vietnam and Cambodia - which have import agreements with the

Philippines will reportedly participate in the bidding.The imports are

to boost buffer stocks ahead of the lean season (June - August).

Earlier, a Reuters report noted that the National Food Authority (NFA) is planning to buy

250,000 tons of 25% broken rice and 250,000 tons of 15% broken rice and is seeking delivery of

half the volume by March 31, 2015 and the remaining half by April 30, 2015.

The Philippines imported around 1.8 million tons of rice (including around 1.5 million tons of

2014 imports and around 300,000 tons of 2013 residual imports) in 2014 to replenish rice stocks

and control price hikes. USDA estimates the Philippines to produce around 12.2 million tons of

rice, basis milled, in MY 2014-15 (July - June) and import around 1.6 million tons of rice in

2015.

U.S. Rice Producers Make Preparations to

Send Rice Samples to Cuba

Feb 26, 2015


4

Rice producers in the U.S. Missouri state

have reportedly secured permission from the

U.S. Department of Commerce (USDC) to

ship one container of sample rice to Cuba

after the 50-year long trade embargo with

the Caribbean nation had been lifted,

according to local sources.They are waiting

for the USDC to grant permission to send its

second container as well. Missouri rice

producers are keen on shipping one

container with 40,000 pounds of rough rice (around 18 tons) and another container with 40,000

pounds of milled rice (around 18 tons).U.S. Senator Claire McCaskill, who has been guiding the

Missouri rice producers in overcoming the regulatory barriers to export rice to Cuba was quoted

as saying in the St.Louis Public Radio a couple of days earlier that the rice producers could

successfully obtain permission to ship a few containers of sample rice to Cuba. The Senator who

recently visited Cuba also spoke to the Cuban authorities about Missouri rice.She noted that next

month a delegation led by the Governor Jay Nixon will reach Cuba to attend the second round of

talks over the U.S. - Cuba trade. The first round of talks were held in Havana last month.

Representatives of all agricultural producers, including rice, will follow the Governor.Recently,

the U.S. has eased the existing financing and banking restrictions with Cuba allowing for the

revival of rice and other agricultural trade with the Caribbean nation.Cuba imports about 50% of

its annual rice consumption needs. USDA estimates Cuba to produce around 455,000 tons of

milled rice and import around 450,000 tons of rice in MY 2014-15 (July - June) to meet a

consumption demand of around 905,000 tons. Cuba currently imports rice from Brazil, India and

Thailand.

Myanmar Signs 100,000 Ton Rice Export

Contract with China

Feb 26, 2015

The Myanmar Rice

Federation (MRF) has

signed a contract with

the China's state run

China National


5

Cereals, Oils and Foodstuffs Corporation (COFCO) to export 100,000 tons of rice to China in

separate monthly shipments in accordance with market prices at the time of shipment, local

sources quoted an official from the (MRF) was quoted as saying.According to the Joint

Secretary of the MRF, it has been agreed to export rice in separate monthly shipments at the

prevailing prices at the time of shipment to ensure a fair trade for both parties. He also noted that

the Myanmar rice exporters do not have enough capacity to export all 100,000 tons of rice at

once.

Officials from the MRF have been working to sign this contract for last few months in order to

legalize rice exports to China.Initially nine companies were shortlisted to export rice to China

but the number is likely to go up as China seeks increase in the number of exporters in which it

will do business with.According to the agreement, rice exporters should get their rice inspected

and accredited with the China's General Administration of Quality Supervision, Inspection and

Quarantine (AQSIQ) and then seek approval from the China Certification and Inspection Group

before exporting rice to China.The MRF Joint Secretary noted that they would begin exporting

rice to China from April. He noted that the MRF is taking all measures to meet the quality and

variety standards in accordance with China's specifications.Currently export quotes for Myanmar

5% broken rice are at around $415 per ton and 25% broken rice is quoted at around $325 per ton.

Around 1.1 million tons of rice have been exported from Myanmar in the first nine months of

2014-15, including 800,000 tons to China through border trade. The Myanmar government is

targeting to export around 2.5 million tons of rice in FY 2015-16 (April - March), up about 67%

from an estimated 1.5 million tons in FY 2014-15.USDA estimates Myanmar to produce 18.98

million tons of paddy rice (around 12.15 million tons, milled basis) and export around 1.4

million tons of rice in MY 2014-15 (January - December 2015).

Oryza Overnight Recap – Chicago Rough

Rice Futures are Seen Lower Overnight

ahead of Weekly Export Sales Report and as

Crude Turns Negative Once Again

Feb 26, 2015

Chicago rough rice futures for May delivery are currently listed 12 cents per cwt (about $3 per

ton) lower at $10.650 per cwt (about $235 per ton) ahead of floor trading in Chicago. The other

grains are seen mixed this morning: soybeans are currently seen about 0.3% higher, wheat is

listed about 0.4% lower and corn is currently noted about 0.6% higher.U.S. stock index futures


6

signaled a softer open on Thursday as investors digested mixed U.S. data that was mostly worse

than expectations. The core CPI, the key figure for the Fed that excludes more volatile food and

energy prices, gained 0.2%. However, CPI data for January was down more than expected at

0.7%.

Expectations were for a further sharp drop of 0.6 percent month on month, the biggest fall since

2008, driven by energy prices to leave the year-on-year rate in negative territory. Durable goods

orders figures for January increased a more-than-expected 2.8%, after a 3.4% decline in the prior

month. Initial claims for unemployment for the week of Feb. 15, came in at 313,000. Analysts

had expected the figure to increase moderately to 285,000 from 283,000 the week prior. Earlier,

futures pointed to a higher open as investors welcomed comments from U.S. Federal Reserve

Chair Janet Yellen's speech to Congress, which hinted that the central bank was not in a rush to

hike interest rates.

U.S. stocks closed narrowly mixed on Wednesday, after struggling for direction amid firming

oil prices and some debate over the tone of Yellen's congressional remarks. Gold is currently

trading about 1% higher, crude oil is seen trading about 2.6% lower, and the U.S. dollar is

currently trading about 0.7% higher at 8:00am Chicago time.

Oryza U.S. Rough Rice Recap - Prices Slip

Slightly as Long Export Sales Disappoint

Feb 26, 2015


7

The U.S. cash market was slightly weaker again today as long grain export sales continue to

disappoint and buyers show little to no interest in this market despite it being the cheapest rice in

the western hemisphere.In the meantime, the USDA reported that cumulative net export sales for

the week ending on February 19 totaled 95,400 tons, which was 3% lower than last week but

20% higher than the prior 4-week average.

Increases were reported for the following destinations: 48,200 tons to Japan, 16,200 tons to

Mexico, 8,100 tons to Saudi Arabia, 7,400 tons to Haiti, and 5,200 tons to Jordan.U.S. rice

exporters shipped 93,700 tons, which was considerably higher than last week and the prior 4-

week average. The primary destinations included 38,200 tons to Mexico, 27,500 tons to

Colombia, 20,900 tons to Haiti, 2,200 tons to Jordan, and 1,500 tons to Canada.


8

Oryza Afternoon Recap - Chicago Rough

Rice Futures Fall Despite Strong Export

Sales and Rallying Grains

Feb 26, 2015

Chicago rough rice futures for May delivery settled 11.5 cents per cwt (about $3 per ton) lower

at $10.655 per cwt (about $235 per ton). The other grains closed higher as corn and wheat were

both lifted out of negative territory by surging beans; Soybeans closed about 1.6% higher at

$10.2650 per bushel; wheat finished about 0.7% higher at $5.0050 per bushel, and corn finished

the day about 1.2% higher at $3.8850 per bushel.

U.S. stocks traded in a narrow range on Thursday, with only the Nasdaq holding higher, as

investors digested mixed economic data and declines in oil. Crude oil traded below $50 a barrel

and Brent held near $61 a barrel on Thursday. he core Consumer Price Index, the key figure for

the Fed that excludes more volatile food and energy prices, gained 0.2% in January. However,

the broader index was down more than expected at 0.7%. Expectations were for a further sharp

drop of 0.6% month on month, the biggest fall since 2008, driven by energy prices to leave the

year-on-year rate in negative territory.

Durable goods orders figures for January increased a more-than-expected 2.8%, after a 3.4%

decline in the prior month. Initial claims for unemployment for the week of Feb. 15, came in at

313,000. Analysts had expected the figure to increase moderately to 285,000 from 283,000 the

week prior. The Dow Jones Industrial Average traded down 7 points, or 0.04%, to 18,217. The

S&P 500 traded down 3 points, or 0.15%, to 2,110, with energy the greatest decliner and

information technology leading four sectors higher. The S&P 500 traded down 3 points, or

0.15%, to 2,110. Gold is trading about 0.7% higher, crude oil is seen trading about 4.6% lower,

and the U.S. dollar is seen trading about 1.1% higher at about 1:00pm Chicago time.

Wednesday, there were 2,098 contracts traded, up from 1,505 contracts traded on Tuesday. Open

interest – the number of contracts outstanding – on Wednesday decreased by 59 contracts to

9,121.

Oryza Global Weather Outlook

Feb 26, 2015


9

Rain is expected across the Yangtze Valley and eastern South China this week.

Light rain showers are expected across India and Pakistan this week.

Weather is expected to remain dry in Bangladesh.

In Indonesia, rain is expected western and southern Sumatra, Kalimantan, south western East

Malaysia, Sulawesi, and Java this week.

Rain showers are expected in central and northern Vietnam, and south eastern Thailand this

week.

A few showers are expected in south eastern Philippines this week.

Rain is expected across the centre-south and north-east Brazil this week.

Rain showers are expected to increase across the Argentina and Uruguay rice areas this week.

Thailand to Auction One Million Tons of Rice

on March 6, 2015

Feb 26, 2015

The Thai government is planning to auction one million tons of rice on March 6, 2015, according

to Reuters.The government is expecting a good number of bidders in the upcoming auction and it

is planning to sell rice based on whole-warehouse basis. It is inviting bids for the March 6

auction on March 5, according to Bloomberg.Thailand sold about 500,000 tons of rice from the

one million tons of rice auctioned on January 29, 2015.

The government reiterated its plans to sell about 10 million tons of rice this year and about 7

million tons next year.

Indonesia's Plan to Replace Raskin Rice with

E-Money Invites Criticism

Feb 26, 2015


10

Indonesia's plan to replace subsidized rice

for poor (Raskin) with E-Money has invited

criticism from an official from the Bank of

Indonesia, according to Reuters.The official

noted that the plan would trigger inflation in

the long run. He added that if the poor are

given money, they would be tempted to buy

rice from the open market instead of from

the Bulog leading to price pressure in the

market. Further, the government may lose its

authority of controlling the price of rice, he

said. The official also noted that the people

may also use the money for other purposes as well. He therefore noted that the plan would be

fruitful if the government can control its use. He added that the e-money concept is better than

giving cash as people tend to use e-money in a more conservatory manner.

India Average Wholesale Rice Prices Decline

Sharply in February 2015

Feb 26, 2015

India average wholesale rice prices, which increased in January 2015 after declining for two

consecutive months have again declined in February 2015 due to increased supplies and

declining export demand, according to official sources.Average monthly wholesale rice prices in

India declined to around Rs.2,709.78 per quintal in February 2015, down about 4% from around

Rs.2,836 per quintal in January 2015, and down about 2% from their year-ago levels of around

Rs.2,761.2 per quintal.

In terms of USD per ton, wholesale rice prices in India stand at around $438 per ton (using

current exchange rates) in February 2015, down about 5% from around $461 per ton (using

historical exchange rates) in January 2015, and down about 1.5% from around $445 per ton

(using historical exchange rates) in February 2014.


11

The government of India, in its second advance estimates for major crops, has estimated India's

rice production for 2014-15 marketing year (October 2014 - September 2015) at around 103.04

million tons, down about 3% from an estimated 106.65 million tons in 2013-14, according to a

statement from the agriculture Ministry this month. The government of India is estimating 2014-

15 (April 2014 - March 2015) rice exports, including basmati and non-basmati, at around 10.1

million tons, down about 7% from around 10.9 million tons exported in 2013-14.

USDA estimates India's 2014-15 (October - September) production at around 102 million tons,

down about 4% from an estimated 106.54 million tons in 2013-14. It estimates India’s rice

exports to decline about 16% y/y to around 8.7 million tons in 2015 from an estimated 10.3

million tons in 2014.

India Basmati Rice May Not Get Legal

Protection Soon

Feb 26, 2015

The Intellectual Property Appellate Board (IPAB) has

accepted the petition of Pakistan's Basmati Grower's

Association (BGA) opposing the granting of Geographical

Indications (GI) tag for India's basmati rice, a move that

could delay India's basmati rice getting a legal


12

protection.The IPAB also considered the petition by farmers' body in the Central Indian State

Madhya Pradesh, which sought inclusion of Madhya Pradesh in India's basmati application.

In 2009, the Agricultural and Processed Food Products Export Development Authority (APEDA)

applied to the GI Registry in Chennai seeking GI protection for India's basmati rice. However,

based on complaints from the Madhya Pradesh department of farmer welfare and agriculture

development and some basmati exporters in the state, in December 2013, the GI Registry

directed the APEDA to file an amended GI application to include Madhya Pradesh as a basmati

growing area.Not convinced by the GI Registry's directive, the APEDA approached the

Intellectual Property Appellate Board (IPAB) in February 2014 to decide over the inclusion of

Madhya Pradesh in its Geographical Indications (GI) application. The APEDA has been very

keen on not including other basmati growing states, other than those recognized by National

Agricultural Research System under the agriculture and co-operative department, in its

application as it views the GI status is critical in determining the genuine basmati rice cultivators.

However, the farmers' body in Madhya Pradesh and the BGA also appealed against the APEDA

with the IPAB.A GI label certifies the geographical origin of a product and confirms adherence

to some production standards. It also prevents producers who aren't covered by the tag from

using the same.

Government of India to End Levy Rice

Procurement from 2015-16 Marketing Season

Feb 26, 2015

The government of India has decided to end the levy rice

procurement system starting from the 2015-16 (October -

September) marketing season to ensure better prices to

farmers, local sources quoted a communication from the

Food Ministry as saying. Under the levy rice procurement

system, millers purchase paddy from farmers at minimum

purchase price (MSP) and the state governments in turn

procure milled rice from millers to meet their public

distribution needs. Percentage of levy rice procured from

millers differs from state to state and used to be in the range of 30-75% of total procurement in

respective states. However, in August 2014, the government of India capped the levy rice

procurement from millers at 25% for the 2014-15 procurement season.Usually about 5 million

tons of milled rice are procured annually through levy system from millers. The rice thus

procured was directly handed over to public distribution system (PDS) operators. The millers

were also happy as they used their installed capacities optimally.However, the government of


13

India felt the need to abolish the levy rice procurement as there was no proper supervision

system and the millers were often not paying MSP to the farmers and were selling the better-

quality grain in the open market. Therefore the Food Ministry opined that the actual purpose of

levy rice system to bridge the capacity gap with government procurement agencies is not being

fulfilled.

With the abolition of levy rice system, the government mandates the Food Corporation of India

(FCI) and state procurement agencies to step up their procurement operations as well as entirely

adopt the custom milled rice (CMR) under which they would directly buy paddy from farmers

and get it milled from registered millers. This would ensure payment of MSP to farmers and

remove some irregularities in the levy rice procurement.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 decision is being hailed by some rice market veterans. “It is a step in right direction, finally

moving away from controlled system to somewhat free markets. The rice millers will have

freedom to sell in the market, which should ultimately help farmers getting a better price,” a

former chairman, Commission for Agricultural Costs and Prices (CACP) was quoted as

saying.The Indian government targets to procure 30.05 million tons of rice during the 2014-15

Kharif Marketing Season (October 2014 - September 2015), down about 12% from last year's

target of around 34.3 million tons.Asia rice sellers kept their quotes mostly unchanged today.

5% Broken Rice Thailand 5% rice is quoted at around $405 - $415 per ton, about $45 per ton premium on

Vietnam 5% rice shown at around $360 - $370 per ton. 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 $30 per ton premium on

Vietnam 25% rice shown at around $335- $345 per ton. 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.

100% Broken Rice Thailand broken rice, A1 Super, is quoted at around $320 - $330 per ton, about $15 per ton

premium on Vietnam 100% broken rice shown at around $305 - $315 per ton.

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.

27th february 2015 daily exclusive oryza rice e newsletter by riceplus magazine

Documents

tons of rice

adoption of gm crops

cultivation of gm crops

modified gm crops

rice stocks

broken rice

traditional crops

rice producers