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25th October , 2013

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Rains wash cotton, paddy output hopes TABLE-India Grain Prices-Delhi-Oct 25 Japan to limit rice subsidy to large-scale farms only Food group exports up 10.84pc in first quarter Nagpur Foodgrain Prices Open-Oct 25 Stalling Milled-in-Nigeria Rice from Attaining Commercial Scale

NEWS DETAILS: Rains wash cotton, paddy output hopes K. V. KURMANATH Battered by weather: Farmers exhibit damaged corn at Gudimalla market yard in Khammam district of Andhra Pradesh on Friday. — G. N. Rao HYDERABAD, OCT. 25:

Incessant rains in the last two weeks could adversely affect cotton and paddy crop in Andhra Pradesh this year. Reports suggest that Phailin cyclone and unabated rains have damaged crops in about five lakh hectares, with cotton and paddy receiving the maximum damage. Thousands of acres of standing crop are inundated in several districts.“If there is no let up in the next one or two days, the loss could be much more,” Sarampally Malla Reddy, National Vice-President of All-India Kisan Sabha, told Business Line.First pickings constitute about a fifth of all cotton produced in the State. The State has estimated cotton production at 60 lakh bales this year against the normal production of 40 lakh bales. Last year, when it grew the crop on 22 lakh hectares, it produced 56 lakh bales, almost doubling from 31 lakh bales in 2011.

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Telangana region, which dominates the cotton area in the State, has been battered with unabated rains in the last few days, destroying cotton that has arrived in North Telangana market yards. The standing crop, too, has been impacted.The industry and the Government initially thought that the area under cotton could drop to 15 lakh hectares but the area touched 22 lakh hectares again this year. This made the Government revise the estimates upwards. Unprecedented rains, however, could spoil the cotton farmers’ party this year.Y.S.R. Kadapa district received 67 per cent excess rain in October, followed by Karimnagar (62 per cent), Adilabad (59 per cent), Kurnool (39 per cent) Warangal (36 per cent), Guntur (30 per cent), Srikakulam (26 per cent) and Krishna (23 per cent.).The Telangana region, which takes a lion’s share in cotton area, received 22 per cent excess this month. Rains have upset the harvesting plans of farmers in several parts. While some farmers have already begun harvesting paddy in several parts, cotton farmers, too, have started their first pickings. Official estimates have put the loss of cotton crop in about two lakh hectares. This figure, however, is expected to rise as the IMD has forecast more rains in the State. kurmanath.kanchi@thehindu.co.in (This article was published on October 25, 2013)

Keywords: Incessant rains, affect cotton, paddy crop, Phailin cyclone, Sarampally Malla Reddy

TABLE-India Grain Prices-Delhi-Oct 25 Fri Oct 25, 2013 3:15pm IST

TABLE-India Grain Prices - Delhi - Oct 25 Rates by Asian News International, New Delhi Tel: 011 2619 1464 Indicative Grains

Previous

opening

close

(in rupees per 100 kg unless stated) Wheat Desi

2,200-2,500

2,200-2,500.

Wheat Dara

1,650-1,750

1,610-1,710.

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Atta Chakki (per 10 Kg) Roller Mill (per bag)

Rice Basmati(Common)

I.R.-8 Gram

1,820-1,920.

1,850-1,950

Rice Basmati(Lal Quila)

Rice Sela

1,710-1,810.

1,810-1,910

Rice Basmati(Sri Lal Mahal)

Rice Permal

210-235.

1,700-1,800

Maida (per bag) Sooji (per bag)

210-235

1,850-1,950.

12,000 11,000

11,000.

7,300-7,900

2,500-2,600 3,120-3,250 2,245-2,345 3,300-3,400

12,000.

7,300-7,900.

2,500-2,600. 3,100-3,220. 2,245-2,345. 3,350-4,200.

Peas Green

3,250-3,370

3,250-3,370.

Peas White

2,500-2,600

2,550-2,650.

Bajra Jowar white

3,170-3,270 2,470-2,680

3,170-3,270. 2,470-2,680.

Maize

1,500-1,580

1,500-1,580.

Barley

1,320-1,450

1,320-1,450.

Guwar

3,350-3,750

3,350-3,750.

Source: Delhi grain market traders.

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Japan to limit rice subsidy to large-scale farms only Oct 25, 2013 Faith Aquino National

At the meeting of the Liberal Democratic Party (LDP), officials said Friday that the government will be limiting rice subsidy to large-scale farms. The plan is in preparation for Japan’s free trade agreement at the Trans-Pacific Partnership (TPP) while still ensuring the efficiency of the agricultural sector.LDP officials target next year as when to submit the proposed bill. Criteria for subsidy distribution will be based on rice acreage. At a press conference the same day, Finance Minister Taro Aso claimed, “It is not wrong to integrate farms to reduce production costs and raise profit for farmers.” He also said that the government’s direction of reducing subsidies is “not wrong for this country.” According to LDP officials, some of the participants urged having a system that will help enlarge farms and improve productivity.During the previous administration of the now opposition group Democratic Party of Japan, when the subsidy program began, then opposition and now ruling bloc LDP criticized the program of expanding subsidies to farmers as pork-barrel spending. But LDP is now considering modifying the subsidy program. “Based on the criticism,” Agriculture MinisterYoshimasa Hayashi said, referring to LDP’s previous stand, “we will discuss a reforum.” To further explain the government’s stand, the minister said that the government would like to “promote a reform to allow farmers to produce products to meet demand under their own judgment.”

Food group exports up 10.84pc in first quarter October 25, 2013

ISLAMABAD - Food group exports from the country during the first quarter of current financial year increased by 10.84 per cent as compared to the same period of last financial year.From July-September, 2013, country earned $ 1.007 billion by exporting different food commodities which stood at US$ 0.909 billion during the corresponding period of last year.According the data of Pakistan Bureau of Statistics, in first three months rice

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exports grew by 34.42 per cent and reached to 688,155 metric ton worth US$ 427.281 million as compared to the exports of 492,144 metric ton valuing US$ 317.854 million of same period of last year.

During the period under review, exports of rice other than basmati surged by 83.45 per cent and reached at 528,376 metric tons worth US$ 280.915 million which stood at 319,061 metric tons cost of US$ 153.126 million in first quarter of last financial year.However, exports of basmati rice decreased by 11.15 per cent in last three months of current FY and the country managed to export 159,779 metric tons costing US$ 146.336 million which recorded at 173,083 metric tons worth US$ 164.728 million during the same period of last year. Meanwhile the exports of fruit and vegetables recorded increase of 44.64 per cent and 22.21 per cent respectively as about 134,054 metric tons fruits worth US$ 92.027 million and 110,983 metric tons vegetable of US$ 38.57 million exported.The data reveled that fish and fish preparations exports also increased by 34.34 per cent and reached to US$ 85.202 million as compared to same period of last year.From July-September, 2013 meat and meat preparations exports grew by 10.61 per cent and reached to 21,013 metric tons worth US$ 65. 428 million as compared to 16,816 metric tons valuing US$ 59.15 million of same period last year.

Nagpur Foodgrain Prices Open-Oct 25 Fri Oct 25, 2013 3:20pm IST Nagpur, Oct 25 (Reuters) - Gram prices in Nagpur Agriculture Produce and Marketing Committee (APMC) showed weak tendency on lack of demand from local millers amid increased supply from producing regions. Easy condition on NCDEX, downward trend in Madhya Pradesh gram prices and high moisture content arrival also pulled down prices, according to sources. *

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FOODGRAINS & PULSES GRAM * Gram Kabuli reported down in open market on poor demand from local traders amid ample stock in ready position. TUAR

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* Tuar varieties ruled steady in open market in absence of buyers matching the demand and supply position. * Moong Chamki reported strong in open market on good festival season demand from local traders amid tight supply from producing belts. * In Akola, Tuar - 4,200-4,400, Tuar dal - 6,400-6,600, Udid at 4,700-4,900, Udid Mogar (clean) - 5,500-5,800, Moong - 6,000-6,400, Moong Mogar (clean) 7,100-7,300, Gram - 3,100-3,400, Gram Super best bold - 4,200-4,400 for 100 kg. * Wheat, rice and other commodities remained steady in open market in thin trading activity, according to sources. Nagpur foodgrains APMC auction/open-market prices in rupees for 100 kg FOODGRAINS Available prices Previous close Gram Auction 2,510-3,050 2,540-3,120 Gram Pink Auction n.a. 2,100-2,600 Tuar Auction n.a. 3,850-4,150 Moong Auction n.a. 4,200-4,400 Udid Auction n.a. 4,300-4,500 Masoor Auction n.a. 2,600-2,800 Gram Super Best Bold 4,400-4,800 4,400-4,800 Gram Super Best n.a. Gram Medium Best 3,950-4,300 3,950-4,300 Gram Dal Medium n.a. n.a. Gram Mill Quality 3,950-4,050 3,950-4,050 Desi gram Raw 3,500-3,600 3,500-3,600 Gram Filter Yellow n.a. n.a. Gram Kabuli 7,600-9,800 7,700-10,000 Gram Pink 7,600-8,000 7,600-8,000 Tuar Fataka Best 6,700-6,850 6,700-6,850 Tuar Fataka Medium 6,500-6,600 6,500-6,600 Tuar Dal Best Phod 6,100-6,200 6,100-6,200 Tuar Dal Medium phod 5,700-5,900 5,700-5,800 Tuar Gavarani 4,200-4,350 4,200-4,350 Tuar Karnataka 4,200-4,300 4,200-4,300 Tuar Black 7,100-7,200 7,100-7,200 Masoor dal best 5,400-5,500 5,400-5,500

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Masoor dal medium 5,000-5,100 5,000-5,100 Masoor n.a. n.a. Moong Mogar bold 7,500-7,800 7,500-7,800 Moong Mogar Medium best 7,100-7,300 7,100-7,200 Moong dal super best 6,600-6,900 6,600-6,900 Moong dal Chilka 6,100-6,400 6,100-6,400 Moong Mill quality n.a. n.a. Moong Chamki best 6,600-7,300 6,500-7,200 Udid Mogar Super best (100 INR/KG) 5,800-6,000 5,800-6,000 Udid Mogar Medium (100 INR/KG) 5,000-5,500 5,000-5,500 Udid Dal Black (100 INR/KG) 4,800-5,000 4,800-5,000 Batri dal (100 INR/KG) 3,600-3,700 3,600-3,700 Lakhodi dal (100 INR/kg) 2,900-3,000 2,900-3,000 Watana Dal (100 INR/KG) 3,350-3,450 3,350-3,400 Watana White (100 INR/KG) 3,300-3,400 3,250-3,400 Watana Green Best (100 INR/KG) 7,900-8,400 7,900-8,100 Wheat 308 (100 INR/KG) 1,600-1,700 1,600-1,700 Wheat Mill quality(100 INR/KG) 1,600-1,650 1,600-1,650 Wheat Filter (100 INR/KG) 1,600-1,800 1,600-1,800 Wheat Lokwan best (100 INR/KG) 1,850-2,300 1,850-2,300 Wheat Lokwan medium (100 INR/KG) 1,700-1,900 1,700-1,900 Lokwan Hath Binar (100 INR/KG) n.a. n.a. MP Sharbati Best (100 INR/KG) 3,100-3,600 3,100-3,600 MP Sharbati Medium (100 INR/KG) 2,600-2,900 2,600-2,900 Wheat 147 (100 INR/KG) 1,400-1,500 1,400-1,500 Wheat Best (100 INR/KG) 1,500-1,600 1,500-1,600 Rice BPT (100 INR/KG) 2,700-3,400 2,700-3,400 Rice Parmal (100 INR/KG) 2,200-2,500 2,200-2,500 Rice Swarna Best (100 INR/KG) 2,300-2,500 2,300-2,500 Rice Swarna Medium (100 INR/KG) 2,100-2,300 2,100-2,300 Rice HMT (100 INR/KG) 4,000-4,400 4,000-4,400 Rice HMT Shriram (100 INR/KG) 4,400-4,800 4,400-4,800 Rice Basmati best (100 INR/KG) 10,000-12,500 10,000-12,500 Rice Basmati Medium (100 INR/KG) 6,200-7,500 6,200-7,500 Rice Chinnor (100 INR/KG) 5,000-5,500 5,000-5,500 Rice Chinnor Medium (100 INR/KG) 4,400-4,800 4,400-4,800 Jowar Gavarani (100 INR/KG) 1,500-1,650 1,500-1,650 Jowar CH-5 (100 INR/KG) 1,800-1,900 1,800-1,900 WEATHER (NAGPUR)

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Maximum temp. 28.3 degree Celsius (82.9 degree Fahrenheit), minimum temp. 22.7 degree Celsius (72.8 degree Fahrenheit) Humidity: Highest - n.a., lowest - n.a. Rainfall : nil FORECAST: Generally cloudy sky. Rains or thundershowers likely. Maximum and Minimum temperature likely to be around 30 and 23 degree Celsius respectively. Note: n.a.--not available (For oils, transport costs are excluded from plant delivery prices, but included in market prices.)

Stalling Milled-in-Nigeria Rice from Attaining Commercial Scale 25 Oct 2013

Raheem Akingbolu appraises the federal government agricultural policy as it concerns the new tariff regime which imposed a 10 per cent duty and 100 per cent levy on imported rice, with effect from January 1, 2013.More than various past governments, the present administration is showing unusual commitment to Nigeria’s emergent agriculture sector through its Agricultural Transformational Agenda (ATA).The Federal Ministry of Agriculture and Rural Development has government’s mandate to actualise the ATA by uplifting agriculture from subsistence to commercial levels through modernisation of the value chain. The intent of government is to transform Nigeria from a net importer of staple foods into a global agriculture powerhouse. To achieve this, the agriculture ministry is collaborating with public sector institutions such as the Central Bank of Nigeria (CBN) to champion policies that include the Commercial Agriculture Credit Scheme (CACS), National Rice Development Fund (NRDF), Rice Processing Intervention Fund (RIF), Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), and the Nigerian Agribusiness and Agro-Industries Development Initiative (NADI). After gaining traction, the policies are expected to drive full exploitation of Nigeria’s agriculture potential leading to massive job creation, urban - rural migration reversal, food security and foreign exchange savings, as well as earnings through export of surplus produce.

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VitalImplication Ironically, by hiking rice import tariff, government is unwittingly reversing the modest growth achieved in the developing rice production sub-sector. The new tariff regime, which imposed a 10 per cent duty and 100 per cent levy (110 per cent tariff increased from 35 per cent) on imported rice, took effect from January 1, 2013.The policy - which precedes a total ban of rice imports by 2015 - was supposedly made to protect recent local investments in big rice mills, and thousands of small holder farmers/processors making up the value chain. Instead, the tariff hike has stimulated the rabid smuggling of rice through the country’s porous land borders from neighbouring Republic of Benin and Cameroun where tariff is pegged at five per cent.Apart from the unprecedented revenue loss to government projected at over $1 billion for 2013, the huge flow of smuggled rice into the country has crashed the price of imported rice below 2012 rates. Considering the harsh and high cost environment in which local rice producers operate, it has become impossible for them to compete against lowpriced smuggled rice flowing into the country. Affirming this, the President, Rice Distributors Association of Nigeria (RIDAN), Esther Olufunmilayo, disclosed that since introduction of the new tariff, RIDAN has not imported rice into the country. Yet retail points are flooded with imported rice estimated at over 1.8 million metric tonnes.Less than three months to Christmas celebration, Olufunmilayo also lamented the absence of rice laden vessels at the nation’s sea ports, describing the development as abnormal. She urged government to review the impact of its present policy on the economy, arguing that tariff hike imposition without tangible transformation of the local rice value chain defeats government’s rice self-sufficiency goal. LocalAssessment The RIDAN President’s position cannot be gainsaid because investors in big rice mills championed by government risk losing their investments to very unfair competition from India and Thailand which derive its strength from smuggling through porous land borders.This development further compounded the woes of local rice millers operating in a high cost environment - devoid of infrastructure such as potable water, power and good road networks - with sparse funding. For instance, the cost of finished parboiled rice from India is between $400 - $500 per metric tonne, and $500 $600 per metric tonne from Thailand. However, the prevailing cost of unprocessed rice paddy in Kano is

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currently $481 per metric tonne, and a disparate $532 per metric tonne in Ikwo in Ebonyi State.Local rice millers are therefore disadvantaged, and are unable to compete against imported rice from Asia. The landing cost of Benue rice to Lagos is between N15,000 and N17,000 per 50kg, while imported rice from Asia range from N7,500 to N10,000 per 50kg.Local consumption of rice is estimated at six million metric tonnes per year. However, local production capacity stands at 2.8 million metric tonnes per year, necessitating importation of over three million metric tonnes from India, Thailand and Brazil to meet demand. International rice traders largely Indians - that are benefitting tremendously from the lucrative rice importation business were tapped by government to lead the investment drive in local rice production and processing. They announced their intention to invest massively in the domestic rice value chain in support of Nigeria’s food security and self-sufficiency in rice production agenda. However, only Olam Nigeria Limited and Popular Foods Limited have invested in local rice production and processing. Benefit of Govt Action The modest growth that government can point to in the rice sub-sector can be attributed to efforts of investors such as Olam Nigeria, Ebony Agro Industries Limited, Ashi and Umza rice processing mills, and Popular Foods.Inefficiencies such as total dependence rain for rice cultivation, primitive planting and harvesting techniques, as well as inadequate product grading and quality checks, remain pervasive among small holder farmers, impeding the overall growth of the sub-sector.Across the rice planting states in the country, yields per hectare remain abysmal, and paddies are still being harvested primitively by hand. Farmers gather and bag everything threshed - including chaff, undeveloped grains and stones for sale to rice processors who are forced to pay a premium price for 13 per cent chaff and eight per cent undeveloped grain. To change all this, government must support small holder farmers by providing basic technology and mechanised tools such as land tillers, planters, harvesters, reapers and threshers to increase scale and raise yield per hectare. This will be great first-step towards the total ban of rice importation.The big rice mills that are producing international quality rice are facing daunting challenges that include seasonal availability of rice, inadequate power and water supply, and prohibitive transport cost as well as high cost of funds due to the closing CACS window by CBN, and the stalled implementation of NIRSAL.The African Agriculture and Foreign Ministers’ side-bar during the recent World Bank-IMF meeting in Washington noted that Nigeria lags behind most other African countries in agriculture financing. Countries that include Burkina Faso, Ethiopia,

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Ghana, Guinea, Malawi, Mali, Niger and Senegal have met or exceeded the 10 per cent annual budgetary funding target for agriculture. Salient Issues-Nigeria’s agricultural sector is burdened with development issues of vast proportions. These issues may take years to resolve without the commitment of about 10 per cent budgetary allocation to the sector by government, and provision of incentives to commercial banks to get involved.Without infrastructure development and adequate funding by government through Public Private Partnerships (PPPs), the rice value chain simply lacks the capacity to meet local demand - by delivering 6 million metric tonnes per year - from 2015. There is urgent need for government to scale up investment in the agricultural sector, while also reviewing and restructuring the present rice import policy and tariff. Import policy and tariff should be aligned with the commercial goal of genuine investors. Just as it did with the sugar and cement production sub-sectors, government should restrict and make rice importation the exclusive preserve of businesses investing in local content and capacity. A bi-annual incremental tariff structure granting short-term concessions to big mills to import brown rice (not polished rice) for production phased over five years can be adopted to create a level playing for local players against the efficiencies of Asia. Pundits believe that government should also muster the will to handover or concession management of irrigation facilities scattered all over the country to private sector players. To the proponents of such belief, it will eliminate the unhealthy dependence on rain for rice cultivation by small holder farmers in most parts of South-east and South-south.All that is needed to cultivate rice extensively is in Nigeria. The ecology is right, and the use of irrigation systems will ensure rice paddy availability all year round for the 100 big mills projected to be in operation by government in 2015. Without these factors in place, self-sufficiency in rice production may yet remain elusive, even beyond 2015. Tags: Business, Commercial Scale, Featured, Nigeria

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