27th july (monday),2015 daily exclusive oryza rice e newsletter by riceplus magazine

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Daily Exclusive ORYZA Rice e-Newsletter by Riceplus Magazine

News are published with permission of ORYZA.com

July 27, 2015 Vol 5 ,Issue VII





Can India Replace PDS Rice with Cash

Transfers?

Jul 24, 2015

The present government of India, which took charge last year, has come out with an ambitious

plan of replacing the rice distributed to the below poverty line (BPL) families under the public

distribution system (PDS) with direct cash transfers in order to address some problems such as

corruption. However, whether India can smoothly handle the transition is a big question. An

aticle in Bloomberg analyses the issues related to the Indian cash transfer system.

Nearly two-thirds of the India population, especially in villages, receive the PDS rice. The Indian

government distributes about 10 kilograms of rice to each family every month as part of efforts

to ensure food security.





But certain problems like middlemen, corruption and missing stocks have been making the

system inefficient. The High Level Committee set up by the Prime Minister to make

recommendations for the Food Corporation of India (FCI) restructuring has suggested to replace

PDS rice with cash transfers. The suggestion is beneficial as it reduces a lot of financial burden

on the government to procure, store and distribute rice as well as ensure financial security to the

people of India.

However, the implementation of the system is associated with several problems. Most of the

rural Indians do not have bank accounts, which are crucial for implementing cash transfer

system. The government helped open nearly 170 million bank accounts in the rural areas and

also started pilot testing of the cash transfer in three states. A testing in the state of Pondicherry

has not proven fruitful and has been dismantled after three months. Several beneficiaries

complained of hardships in collecting money from the banks.

A Professor in the Indian Institute of Technology (IIT), New Delhi, who surveyed the PDS

across 10 states in 2013, noted that lack of proper financial/banking infrastructure in India is a

major hurdle to the cash transfer system. There are not sufficient bank branches in rural India to

make payments to the beneficiaries on time and most importantly, they may not be able to afford

to buy rice in the private shops. Some experts say, they may even spend the whole lot of money

paid by the government on other things and remain hungry. In that case, the purpose of the

government to ensure food security is lost.

The Senior Vice-President for sovereign risk at Moody’s Investors Service noted that the success

of cash transfers would depend on the public administration and the extent to which it is

understood and accepted by the public.

Oryza Overnight Recap – Chicago Rough

Rice Futures Turn Negative as Sharply

Lower Grains Weigh on Prices

Jul 24, 2015

Chicago rough rice futures for Sep delivery are currently seen trading 13 cents per cwt (about $3

per ton) lower at $10.980 per cwt (about $242 per ton) during early floor trading in Chicago. The

other grains are seen trading lower this morning; soybeans are currently seen trading about 0.9%

lower, wheat is listed about 1.4% lower and corn is currently noted about 1.9% lower.





U.S. stocks traded mixed on Friday, despite surprisingly strong Amazon earnings, as signs of

slower global growth weighed on sentiment. Stocks briefly attempted gains before turning lower,

with the Dow and S&P a touch below the flatline and the Nasdaq clinging to gains. Overnight,

the Caixin Markit flash general manufacturing PMI for July came it at 48.2, a 15-month low. The

July euro zone flash PMI was 52.2, a 2-month low. The flash manufacturing PMI for the U.S.

comes at 9:45 a.m. and new home sales comes at10:00 a.m.

European stocks traded lower and Asian stocks closed in the red, with metals falling further and

gold hitting a fresh five-year low. The precious metal held near $1,081 an ounce in early trade.

The Dow Jones Industrial Average traded 17 points lower, or 0.11%, at 17,713. The S&P 500

traded down 3 points, or 0.12%, at 2,099, with health care leading six sectors lower and

consumer discretionary leading gainers. The Nasdaq traded up 6 points, or 0.12%, at 5,151. Gold

is currently trading about 1.1% lower, crude oil is seen trading about 0.3% higher, and the U.S.

dollar is currently trading about 0.3% higher at 8:45am Chicago time.

India 2015-16 Main Paddy Rice Sowing Area

Continues to Pick Up Despite Deficient

Monsoons

Jul 24, 2015

Total area planting to India's 2015-16 Kharif (main) rice crop (June - December) stood at around

18.85 million hectares as of July 24, 2015, up about 7% from around 17.65 million hectares

planted during the same time last year, according to a press release by the Agriculture Ministry.

India received 7% below normal rainfall in the fourth week of July, according to the Indian

Meteorological Department (IMD). Central, south peninsular and north-east regions received

12%, 12% and 6% below average rains during the week. However, the north-west region

received 6% above-average rainfall. Some areas of Maharashtra are still dry. Analysts are still

concerned that a long dry patch in major rice growing areas could severely impact rice yields.

Monsoon rains in July were only 7% below normal though they were forecast to be 12% below

normal. According to the Economic Times, the Director of the Central Rice Research Institute

(CRRI) noted that the 2015-16 kharif rice output may not be significantly impacted if the

monsoon deficit is curbed at 10. "Current rainfall is very encouraging to farmers. If distribution

of rains is same and there are no major spells of drought, we should not worry about the deficit,"

he was quoted as saying.





A likely drought-inducing El Nino this year is expected to lower production prospects this year.

The IMD has forecasted the El Nino pattern to reach to moderate to a strong one during the

monsoon season (June – September).

The total Kharif crop sown area stands at 69.38 million hectares as on July 24, 2015, up about

26% from around 55.04 million hectares during the same period last year, according to the

Agriculture Ministry.

Oryza Weekly: Global Rice Prices Rebound

on Supply Slump

Jul 24, 2015





The Oryza White Rice Index (WRI), a weighted average of global white rice export quotes,

ended the week at about $404 per ton, down about $3 per ton from a week ago, down about $1

per ton from a month ago and down about $73 per ton from a year ago.

The USDA estimates 2015-16 will be the third crop year in a row with declining global rice

stocks due to lower carryover from the 2014-15 crop year. Stocks are expected to tighten in

Thailand and India in particular, as dampened exports prices and lower demand; dry weather

from El Nino; and declining government support in Thailand all lower production incentives.

Thailand





Thailand 5% broken rice is today shown at about $380 per ton, down about $15 per ton from a

week ago, up about $10 per ton from a month ago and down about $45 per ton from a year ago.

The Thai Commerce Ministry, which planned to hold an auction to sell about 1.29 million tons

of sub-standard rice in early July, is likely to postpone the auction to early August as the

separation procedure of the rice is delaying the preparation process.

The government of Thailand has decided to conduct a large-scale survey of drought-affected

farm land in the Central Region in order to assess the severity of the damage in order to provide

adequate support to the affected farmers.

The Thai Rice Exporters Association (TREA) expects this year’s rice exports to be lower than

the target of 10 million tons due to extending drought conditions and a sluggish world

economy. New estimates are around 9.5 million tons.

The TREA expects that the ongoing drought conditions will increase Thailand’s domestic and

export rice prices in the second half of 2015.

The Thai Commerce Ministry plans to auction about 500,000 tons of rice in its next auction, the

fifth of this year.

Vietnam

Vietnam 5% broken rice is today shown at about $350 per ton, unchanged from a week and a

month ago and down about $100 per ton from a year ago.

The Vietnam Food Association (VFA) has forecasted Vietnam to export around 5.91 million tons

of rice in 2015, down about 6.5% from an earlier estimated 6.32 million tons exported in 2014

due to a likely fall in exports in the fourth quarter.

Vietnam rice exporters are expecting the Philippines traders to import the entire quota of 293,100

tons from Vietnam under the WTO minimum access volume (MAV) country specific quota

(CSQ).

Vietnam exported about 2.875 million tons of rice during the period January 1 – July 16, a

decrease of about 21% from the first seven months of 2014.

Rice exports from Vietnam declined about 10% y/y in the first half of 2015, reaching only about

2.71 million tons. The decline is due to stiff competition from countries such as India, Thailand,

Pakistan, Myanmar, and Cambodia, but analysts expect Vietnam’s exports to improve in the

second half of 2015.





Vietnam’s Ministry of Agriculture and Rural Development has converted around 78,735 hectares

of rice are in the Mekong Delta into higher value crops under a two-year agricultural

restructuring project.

As negations between the European Union and Vietnam regarding the EU-Vietnam Bilateral

Free Trade Agreement (EU-V BFTA) are in their final stages, the European association of EU

farmers unions and cooperatives (Copa-Cogeca) has expressed concern about the future of the

EU rice growing sector. The Secretary General of Copa-Cogeca is reportedly sending a

document highlighting all the concerns regarding the EU rice sector in the light of increasing

duty free imports from Asian countries to the Directorate General (DG) Trade and DG

Agriculture.

India

India 5% broken rice is today shown at about $390 per ton, unchanged from a week and a month

ago, and down about $50 per ton from a year ago.

Total area planting to India's 2015-16 Kharif (main) rice crop (June - December) stood at around

18.85 million hectares as of July 24, 2015, up about 7% from around 17.65 million hectares

planted during the same time last year

The government has removed quantitative restrictions on exports of rice bran oil and allowed for

its bulk export, according to local sources. Exporters anticipate higher interest from Japan.

Rice farmers in Bangladesh are avoiding hybrid rice varieties this year due to high production

costs.

Pakistan

Pakistan 5% broken rice is today shown at about $375 per ton, unchanged from a week ago,

down about $15 per ton from a month ago and down about $65 per ton from a year ago.

Pakistan Finance Minister has met with the Kenyan High Commissioner and requested him to

review the high level of import duty on Pakistani rice as the high import duty was affecting

Pakistan rice exports to Kenya in recent months.

The rice sector in Pakistan is currently facing problems with excess stocks as it faces stiff

competition from other rice exporting countries such as Thailand, India, and Vietnam. High

input costs and low crop prices, along with low global demand, are further impacting stocks.





Rice exporters in the country are expressing concern that the rice sector lacks a specific forum

that would fix, maintain and control rice prices in the country.

Central & South America

Brazil 5% broken rice is today shown at about $500 per ton, unchanged from a week ago, down

about $50 per ton from a month ago and down about $165 per ton from a year ago.

Five percent broken rice from Uruguay and Argentina is today shown at about $540 per ton,

unchanged from a week ago, down about $25 per ton from a month ago, and down about $85 per

ton from a year ago.

Peru lost its trade dispute against Guatemala at the World Trade Organization Appellate Body,

who said that Peru’s “additional duty” on rice and other agricultural imports was illegal under

global trade.

Ecuador’s winter rice crop (December-June) output is expected to increase about 3% y/y due to

a 3% y/y increase in acreage.

U.S.

U.S. 4% broken rice is today shown at about $475 per ton, unchanged from a week ago, up about

$20 per ton from a month ago and down about $80 per ton from a year ago.

The United States Agriculture Department’s Animal and Plant Health Inspection Service has

published a new rule further restricting entry of certain commodities, including rice, from

countries where the Khapra beetle is known to exist.

Other Markets

The Chairperson of Senate Agriculture and Food Committee urged the government of the

Philippines to consider rice imports only through G2G deals and avoid imports through the

private sector in efforts to curb rice smuggling in the country.

An NFA official says that Philippines rice traders may not import all 805,200 tons of rice under

the WTO MAV quota. The government is studying demand and supply conditions and assessing

whether more rice imports are needed.

Monsoon rains have damaged about 18.8 million peso (around $415,455) worth of rice crop in

the northern Luzon region of the Philippines.





Myanmar is looking to secure an export deal with the Philippines as part of its efforts to

diversify its export markets and reduce dependence on China.

China’s rice imports increased sharply in the first six months of 2015, reaching 1.42 million

tons, up about 7% from the same period last year.

Rice farmers in Laos are worried that dry conditions and insufficient rainfall linked to the El

Nino phenomenon are likely to severely impact rice production in the country.

Scientists from China, Sweden and the U.S. have developed a new genetically-modified rice

variety called SUSIBA2 that is low methane-emitting.

South Korea's state run Agro Fisheries & Food Trade Corporation (KAFTC) is seeking to buy

about 41,000 tons of non-glutinous rice in tenders for delivery between October 15, 2015 and

February 29, 2016.

Italy will host its 105th

rice seed contest for breeders, with applications due by September 30.

Rice prices for Italian paddy remain unchanged in the second week of July 2015.

South Korea Seeks to Buy 41,000 Tons of

Non-Glutinous Brown Rice in Tenders

Jul 24, 2015

South Korea's state run Agro Fisheries & Food Trade Corporation (KAFTC) is seeking to buy

about 41,000 tons of non-glutinous rice in tenders for delivery between October 15, 2015 and

February 29, 2016, according to a statement on its website.

The details of the tonnage and volume of the rice sought:

Registration of tenders will close at 4.00 p.m on July 30, 2015. Electronic bidding will take place

on July 31, 2015 between 10:00 and 11:00 a.m.

Thailand, Vietnam, India Rice Sellers Lower

Some of Their Quotes Today; Pakistan Rice

Quotes Unchanged





Jul 24, 2015

Thailand rice sellers lowered their quotes for 5% broken rice by about $5 per ton each to around

$375-$385 per ton today. Vietnam rice sellers lowered their quotes for 100% broken rice by

about $5 per ton to around $310-$320 per ton. India rice sellers lowered their quotes for

parboiled rice by about $5 per ton to around $375-$385 per ton. Pakistan rice sellers kept their

quotes mostly unchanged.

5% Broken Rice

Thailand 5% rice is indicated at around $375 - $385 per ton, down about $5 per ton from

yesterday and about $30 per ton premium on Vietnam 5% rice shown at around $345 - $355 per

ton. India 5% rice is indicated at around $385 - $395 per ton, about $15 per ton premium on

Pakistan 5% rice shown at around $370 - $380 per ton.

25% Broken Rice

Thailand 25% rice is shown at around $355 - $365 per ton, about $30 per ton premium on

Vietnam 25% rice shown at around $325- $335 per ton. India 25% rice is indicated at around

$350 - $360, about $20 per ton premium on Pakistan 25% rice shown at around $330 - $340 per

ton.

Parboiled Rice

Thailand parboiled rice is indicated at around $390 - $400 per ton. India parboiled rice is

indicated at around $375- $385 per ton, down about $5 per ton from yesterday and about $40 per

ton discount to Pakistan parboiled rice last shown at around $415 - $425 per

ton.

100% Broken Rice

Thailand broken rice, A1 Super, is indicated at around $320 - $330 per ton, about $10 per ton

from premium on Vietnam 100% broken rice shown at around $310 - $320 per ton, down about

$5 per ton from yesterday. India's 100% broken rice is shown at around $305 - $315 per ton,

about $20 per ton premium on Pakistan broken sortexed rice shown at around $285 - $295 per

ton.





University of Arkansas Pathologist Suggests

Means to Cope with Rice Sheath Blight

Jul 24, 2015

Rice sheath blight, which is caused by a soil pathogen/fungus, is considered to be a major disease

affecting rice plants in Arkansas. The disease is said to prevail in rice fields if there are

prolonged periods of high humidity and high temperatures. Experimental plots inoculated on

July 9 have started showing symptoms of a spreading disease.

Experts are concerned if the disease may impact the state yields this year. Currently,

temperatures are not very high for the fungus to survive, but they fear it may develop in fields

where inoculum is active and nights are dewy and warm.





The fungus survives as “sclerotia” (tiny masses of fungal structure called “mycelia”) which are

capable of floating on flooded rice fields. These floating fungal structures come into contact with

the rice plant at or just above the waterline and spread throughout the plant tissue. Sheath blight

starts at the panicle initiation (green-ring) and spreads to panicle differentiation (1/2” internode

elongation).

Yeshi Wamishe, a University pathologist says farmers should search for the presence of sheath

blight from green ring to pre-heading. Further he adds that any rice variety is not completely

resistant to sheath blight. But its intensity varies between short and long rice verities and the

ambience under which it develops. But application of appropriate level of fertilizer may reduce

the sheath blight incidence. He warns that sheath blight may be confused with other rice diseases

such as “aggregate sheath spot”, “bordered sheath spot”, “stem rot”, or “black (crown) sheath

rot”, which do not require fungicides.

He notes that fungicide application also depends on varietal susceptibility, the height of the

variety, weather condition, the field management (seeding rate and nitrogen fertilizer rate), and

the treatment threshold. He says that optimum fungicide treatment should be between 7-14 days

after it reaches panicle differentiation. However, adequate knowledge of the distribution of the

disease in a field and its intensity between ½” internode elongation and early heading” can

decide the correct usage of fungicides.

The following table shows the recommended fungicides and their usage.

Venezuela Orders Rice Farmers to Sell

Output to State to Overcome Food Shortages

Jul 24, 2015

The government of Venezuela has ordered rice farmers to sell between 30% and 100% of their

output to state stores to address the problem of food shortages, according to the Telegraph.

Producers of milk, pasta, oil, sugar and flour have also been asked to sell their output to the state.

However, the decision is criticised by some experts. They say there are only 7,245 state stores in

the country compared to nearly 113,000 private stores. People may have to travel several

kilometers to reach a state store and wait in the queues for longer times.





The President of the Venezuelan Food Industry Chamber noted that the decision does not help

address the issue of food shortages. Most of the traders will resort to hoarding by buying from

the state owned shops and then resell at higher profits.

The only way is to increase production in the country, he said. The official added that the

government has not discussed the plan with the Chamber before implementing it.

Venezuelan government imposes rigid currency controls and consequently a shortage of foreign

exchange makes it very difficult for traders to import rice and other goods.

Recently, Venezuelan government also hinted that it would not renew the PetroCaribe deal with

Guyana after it expires in November this year. Local sources say the government is in talks with

the Uruguayan government to strike a new rice import deal.

VFA Lowers Vietnam Rice Export Forecast

to 5.91 Million Tons

Jul 24, 2015

The Vietnam Food Association (VFA) has forecast Vietnam to export around 5.91 million tons

of rice in 2015, down about 6.5% from an earlier estimated 6.32 million tons exported in 2014,

Reuters quoted a report from the VFA.

http://www.oryza.com/23166/venezuela-cancel-rice-oil-deal-guyana-says-finance-minister





The decline is mainly due to a likely fall in the last quarter shipments. The VFA is forecasting

Vietnam to export around 1.4 million tons of rice in October-December 2015 period, down about

22% from an estimated 1.8 million tons in July-September 2015 period. Vietnam exported

around 2.71 million tons of rice the first six months of 2015, down about 10% from around 3.015

million tons last year.

The VFA's latest forecast is much below the government's projection at around 7 million tons.

The UN's Food and Agriculture Organization (FAO) is estimating Vietnam to export around 6.3

million tons , almost unchanged from last year. USDA estimates Vietnam to export around 6.7

million tons of rice in 2015.

Vietnam 5% broken rice is currently quoted at around $350 per ton compared to Thai 5% rice at

around $380 per ton, India 5% rice at around $390 per ton and Pakistan 5% rice at around $375

per ton.

EU Farmers Association Warns About

Impact of Increasing Duty-Free Rice Imports

Jul 24, 2015

As negations between the European Union and Vietnam regarding the EU-Vietnam Bilateral

Free Trade Agreement (EU-V BFTA) are in their final stages, the European association of EU





farmers unions and cooperatives (Copa-Cogeca) has expressed concern about the future of the

EU rice growing sector.

The EU may import about 76,000 tons of rice, mostly husked and milled, from Vietnam at zero

percent duty if the EU-V BFTA goes ahead. The Secretary General of Copa-Cogeca is reportedly

sending a document highlighting all the concerns regarding the EU rice sector in the light of

increasing duty free imports from Asian countries to the Directorate General (DG) Trade and DG

Agriculture.

In the document, the Copa-Cogeca Secretary General noted that already increasing rice imports

from Cambodia (about 22% of EU rice imports) and Myanmar (about 3% of EU rice imports) in

the past three years have led to a decline of about 40% in the EU indica rice acreage to around

96,000 hectares from around 156,000 hectares. He warned that if the zero-duty rice imports

continue at this pace, there is a danger that the cultivation of Indica rice in Europe will disappear

entirely by 2020.

The Copa-Cogeca official noted that inclusion of Vietnam rice will further deteriorate the EU

rice situation as Vietnam FOB prices are the lowest in the South East Asia region and at zero

percent duty, they would be even more competitive and may directly compete with European

local indica varieties.

He also noted that the EU's ongoing FTA negotiations with India (which already accounts for

24% of EU rice imports), Thailand (which accounts for 18% of EU imports) and the U.S. (which

accounts for 4% of EU imports) despite granting all the tariff rate quotas (TRQs) to the third

world countries are likely to lead to an unrecoverable crisis in the EU rice sector.

He reiterated that the EU's stance to decouple specific support for rice production since 2012 has

put the position of European rice producers in even more vulnerable position. He also noted that

continuation of rice production in the delta area of the EU is most important to maintain

biodiversity in the region.

The official urged the EU not to grant further duty free TRQ for rice to any other country after

the EU-Vietnam FTA. He also stressed on the inclusion of a strict safeguard clause mechanism

in the same FTA in order to avoid any future crises in the EU rice sector.

Pakistan Urges Kenya to Lower Import Duty

on Rice

Jul 24, 2015





Pakistan Finance Minister has met with the Kenyan High Commissioner and requested him to

review the high level of import duty on Pakistani rice, according to local sources.

He reportedly told the Kenyan official that the high import duty was affecting Pakistan rice

exports to Kenya in recent months.

Pakistan has accumulated around 600,000 tons of surplus stocks for the last two years and this

year's bumper crop of around 7 million tons is expected to push up the surplus stocks to over one

million tons. This year, Pakistan has been facing a stiff competition with India, Thailand and

Vietnam. Declining global prices and lack of demand from traditional importers is also a major

concern for Pakistani rice exporters.

Kenya, which is a part of the East African Community (EAC), imposes 75% duty on rice imports

from non-EAC countries. The EAC is keen on protecting the region's local rice sector from the

cheap imported rice from the Asian countries.





Both Pakistan and Kenya agreed to discuss matters related to trade and business cooperation at

the upcoming Pak-Kenya Joint Ministerial Commission (JMC) meeting that will be held in

Pakistan.

Pakistan exported a total of around 3.73 million tons of rice in FY 2014-15 (July-June), up about

11% from around 3.37 exported in FY 2013-14, according to data from the Rice Exporters

Association of Pakistan (REAP).

Vietnam Expects High Interest from

Philippines Private Rice Traders

Jul 24, 2015

The Philippines National Food Authority (NFA), which has already imported around 550,000

tons of rice from Vietnam under government-to-government (G2G) contracts to ensure adequate

stocks in the lean season (June – September). It has further allowed private rice traders to import

around 805,200 tons of 25% broken rice at 35% tariff under WTO minimum access volume

(MAV) country specific quota (CSQ) before November 30, 2015.

Under the quota, Philippines traders can import up to 293,100 tons each from Thailand and

Vietnam; up to 50,000 tons each from China, India and Pakistan; 15,000 tons from El Salvador

and the rest from other countries.

Vietnam rice exporters are expecting the Philippines traders to import the entire quota of 293,100

tons from Vietnam, according to local sources. The Vietnam rice export sector is facing trouble

as China, its major importer has increased imports from Thailand.

Vietnam is struggling hard to increase its exports this year due to a stiff competition from

Thailand, India, Pakistan as well as emerging exporters such as Cambodia and Myanmar.

Vietnam exported about 2.875 million tons of rice in January 1 - July 16, 2015, down about 21%

from about 3.63 million tons of rice exported in first seven months of 2014, according to data

from the Vietnam Food Association (VFA). Average rice export price so far in this year stands at

about $415 per ton (FOB), down about 4% per ton from about $431 per ton recorded during

same last year.

The Philippines private rice traders have so far applied to import only 300,000 tons of rice from

Thailand and Vietnam, Reuters quoted a NFA official.





While the NFA is authorized to import another 250,000 tons of rice if the El Nino-induced

drought conditions intensify. The government is currently assessing the need for importing the

additional volume of rice, the Director of the Department of Economic Research at the Bangko

Sentral ng Pilipinas (BSP) told reporters.

27th july (monday),2015 daily exclusive oryza rice e newsletter by riceplus magazine

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