7th july (tuesday),2015 daily exclusive oryza e rice newsletter by riceplus magazine

July 7 ,2015

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Cambodia Rice Exports Increase Sharply in First Half of 2015 Driven by Chinese, European Demand Jul 06, 2015

Cambodia has exported around 283,825 tons of milled rice in the first six months of 2015, up about 60% from around 177,928 tons exported during the same period last year, Phnom Penh Post quoted data from the Secretariat of One Window Service for Rice Export Formality.While white rice accounted for around 47% of total rice exports in the six month period, fragrant rice accounted from 44.5% and parboiled rice accounted for the remaining 8%. About 72 companies have exported rice to 51 countries so far this year according to official data.

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Increased demand from China and the European Union are said to be driving this year's rice exports. Cambodia exported around 72,000 tons of rice to China so far this year, about 9 times more than 7,731 tons exported during the same period last year. It exported around 175,959 tons and around 177,928 tons of rice to China in 2013 and 2014 respectively. A Memorandum of Understanding (MoU) to export around 100,000 tons of rice to China expired in May this year and Cambodia hopes to strike a new deal to export around 200,000 tons of rice to China this year.

Meanwhile, the EU nations France, Poland and the Netherlands remained the top three importers of Cambodian rice in 2015 with 36,233 tons, 32,268 tons and 18,179 tons respectively. The government of Cambodia aimed to increase rice exports to one million tons in 2015 but noted that that it is unlikely to achieve the target due to inadequate milling facilities and infrastructure as well as lack of access to funding.

USDA estimates Cambodia to export 1.1 million tons of rice (including official and unofficial exports to Vietnam and Thailand through borders) in 2015, up about 10% from an estimated 1 million tons in 2014.

OECD-FAO Report Estimates Global Rice Trade to Increase 9% in 2015-2024 Jul 06, 2015

A report titled 'Agricultural Outlook 2015-2024' by the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations forecasts the global rice trade to increase about 9% during 2015-2024.

The report expects the global players on international rice markets to remain the same. It expects Thailand to retain the world's number one exporter status by 2024 and except for India, it expects rice exports from all of the traditional exporters, namely Pakistan, Thailand, Vietnam and the U.S. to increase.

The report estimates global rice production to increase about 70 million tons to around 564 million tons from the current 494 million tons (in 2014). The increase is mainly driven by yield improvements while area expansion is expected to be limited. The global increase of 70 million 3

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tons in rice production is expected to be dominated by Asian countries (61 million tons) mainly India, Indonesia, Bangladesh, Thailand, Vietnam and China.

The FAO expects total production of cereals, including rice, to increase about 14% over the next decade.

The report estimates global rice consumption to increase by 57 million tons to around 562 million tons over the next decade, marginally less than the previous decade. The growth is expected to be higher in developing countries than in developed countries with Asian countries accounting for almost 80% of global consumption increase.

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The OECD-FAO report generally projects a steady decline in prices of food grains, including rice due to an increase in overall agricultural production and diversification of dietary choices towards other food items like meat and dairy products. A possible slowdown of fast growing economies like China, and growing competition among exporters could also lead to a decline in prices, it says. On the other hand, supply shortages caused by any severe droughts may result in surging international prices.

India Reconsiders Rice Imports from Myanmar Jul 06, 2015

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The government of India, which planned to import 100,000 tons of rice from Myanmar to fill the supply gaps that are likely to arise in the north-eastern states of Manipur and Mizoram due to the ongoing construction of railway line connecting the two states to the rest of the country, has issued a directive to the Manipur state government to abandon all processes related with the rice import activity, local sources reported.

Manipur government planned to import 10,000 tons of rice every month to meet the public distribution (PDS) needs of the state. It also reportedly developed the requisite infrastructure facilities such as food testing laboratory, godowns, etc in the border towns to accommodate the imports.

According to local sources, the government of India issued the directive in the light of some scams that were unearthed in the PDS implementation in some north-eastern states, including Manipur. The FCI officials in Manipur also reportedly received the directive.

The government has decided to import rice despite having sufficient stocks with the FCI as moving rice locally from other states such as Punjab or Andhra Pradesh by road is costlier than importing it. Moreover the journey has to pass through hilly terrains and land-slide prone areas, said local sources.

India’s rice stocks in the central pool as of June 1, 2015 stood at around 22.485 million tons (including a milled equivalent of about 9.234 million tons of paddy), down about 20% from around 28.03 million tons recorded during the same period last year, according to data from the Food Corporation of India (FCI).

Oryza Overnight Recap – Chicago Rough Rice Futures Come Under Pressure as Lower Crude Weighs on US Grain Prices Jul 06, 2015

Chicago rough rice futures for Sep delivery are currently seen trading 4 cents per cwt (about $1 per ton) lower at $10.595 per cwt (about $234 per ton) during early floor trading in Chicago. The other grains are seen trading lower this morning; soybeans are currently seen trading about 1.6% lower, wheat is listed about 1.1% lower and corn is currently noted about 1.5% lower.

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U.S. stocks traded lower on Monday, following declines overseas, as uncertainty over the Greece debt crisis weighed on investor sentiment. The Dow Jones industrial average traded about 70 points lower after falling more than 150 points soon after the market open, Chevron leading most blue chips lower. The Nasdaq also recovered from a near 1% plunge in the open as biotechs recovered to trade higher. Energy fell more than 1% as the worst decliner in the S&P 500. WTI crude plunged 4.2% $54.50 a barrel, its lowest level since April 15, amid the Greece debt drama and volatility in Chinese markets. In a Sunday referendum, nearly two-thirds of Greeks voted "no," rejecting a proposal from international creditors that would have required more austerity reforms for debt relief. The European Central Bank is scheduled to hold a conference call later in the day on the level of emergency liquidity assistance to Greek banks. Euro zone leaders will meet at an emergency summit on Greece Tuesday. Gold is currently trading about 0.2% lower, crude oil is seen trading about 2.2% lower, and the U.S. dollar is currently trading about 0.3% higher at 8:15am Chicago time.

Oryza Afternoon Recap - Chicago Rough Rice Futures Continue to Strengthen on Rumors of Fresh Round of Export Business Jul 06, 2015

Chicago rough rice futures for Sep delivery settled 18 cents per cwt (about $4 per ton) higher at $10.815 per cwt (about $238 per ton). The other grains traded mostly lower today; Soybeans closed about 1.6% lower at $10.1475 per bushel; wheat finished about 0.8% higher at $5.9550 per bushel, and corn finished the day about 0.5% lower at $4.3500 per bushel.

U.S. stocks held lower in choppy trade Monday, recovering sharp opening losses but failing to hold slight gains amid continued uncertainty over the Greece debt crisis. Energy traded about 1% lower as the worst decliner in the S&P 500. WTI crude plunged more than 5.5% to its lowest level in several months, amid the Greece debt drama and volatility in Chinese markets. The major averages fell back into negative territory after briefly trading in the black. In a Sunday referendum, nearly two-thirds of Greeks voted "no," rejecting a proposal from international creditors that would have required more austerity reforms for debt relief. German Chancellor Angela Merkel said after a meeting with French President Francois Hollande that they respect the vote of the Greeks and the door for talks with the country remains open, Reuters reported.

Last week, Greece became the first developed nation to default on a major loan from the 7

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International Monetary Fund. U.S. economic data out Monday included the Institute for Supply Management's June service sector survey, which hit 56.0 in June, versus the 56.2 estimate. The Dow Jones Industrial Average traded down 75 points, or 0.43%, at 17,653. The S&P 500 traded down 11 points, or 0.52%, at 2,065, with energy leading all 10 sectors lower. The Nasdaq traded down 27 points, or 0.53%, at 4,982. Gold is trading about 0.4% higher, crude oil is seen trading about 4.2% lower, and the U.S. dollar is seen trading at about 0.1% higher at about 1:00pm Chicago time.

Thursday, there were 1,082 contracts traded, down from 1,285 contracts traded on Wednesday.

Open interest – the number of contracts outstanding – on Thursday decreased by 354 contracts to 9,250.

Global Rice Quotes July 6th, 2015 Long grain white rice - high quality Thailand 100% B grade 380-390

↔

Vietnam 5% broken

345-355

↔

India 5% broken

380-390

↔

Pakistan 5% broken

380-390

↔

Myanmar 5% broken

415-425

↔

Cambodia 5% broken

425-435

↔

U.S. 4% broken 450-460

↔

Uruguay 5% broken

565-575

↔

Argentina 5% broken

555-565

↔

Long grain white rice - low quality Thailand 25% broken

350-360

↔

Vietnam 25% broken

325-335

↔

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Pakistan 25% broken

335-345

↔

Cambodia 25% broken 410-420

↔

India 25% broken

350-360

↔

U.S. 15% broken

440-450

↔

Long grain parboiled rice Thailand parboiled 100% stxd

375-385

Pakistan parboiled 5% broken stxd

NQ

↔ ↔

India parboiled 5% broken stxd 365-375

↔

U.S. parboiled 4% broken

555-565

↔

Brazil parboiled 5% broken

570-580

↔

Uruguay parboiled 5% broken NQ

↔

Long grain fragrant rice Thailand Hommali 92% 825-835

↔

Vietnam Jasmine

↔

475-485

India basmati 2% broken

NQ

↔

Pakistan basmati 2% broken

NQ

↔

Cambodia Phka Mails

835-845

↔

315-325

↔

Vietnam 100% broken 310-320

↔

Brokens Thailand A1 Super

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Pakistan 100% broken stxd Cambodia A1 Super

290-300

350-360

↔

India 100% broken stxd 275-285

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Egypt medium grain brokens

NQ

↔

U.S. pet food

↔

350-360

Brazil half grain NQ

↔

↔

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

South Korea Buys 15,000 Tons of NonGlutinous Brown Rice from China in Tender Jul 06, 2015

South Korea's state run Agro Fisheries & Food Trade Corporation (KAFTC) has purchased 15,000 tons of non-glutinous short-grain brown rice of the Chinese origin for delivery by November 30, 2015 at $893 per ton, according to a statement on its website.

KAFTC originally sought to purchase about 59,104 tons of non-glutinous rice via six tenders for which the bidding took place on July 3, 2015. It announced results for 15,000 tons of nonglutinous brown rice via one tender on the same day. It will announce the results for the remaining 49,104 tons after sample tests are complete, according to the website.

Bee Keepers Beware of Rice Paddies!

Jul 06, 2015

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Pesticides used in rice fields are posing threat to the existence of honey bees in Japan, the Japan Times quoted a study by the Agriculture Minsitry.

Officials told local sources that large-scale honey bee deaths had occurred due to pesticides sprayed on paddies near apiaries. They noted that Japan has nearly 9,300 bee keepers. They noted that the number of reported cases of mass deaths of honey bees reached around 79 in FY 2014 rom around 69 in the previous year and just few cases in years before that.

They also told that nearly 1,000 to 3,000 honey bees were found to have died per hive, and pesticides were detected on many of the dead bees. They noted that honey bees get victims to pesticides while collecting rice pollen. These tainted honey bees are understood to have caused deaths of bees inside the hive boxes.

The Ministry has instructed prefectural governments to set up consultative bodies of rice farmers and bee keepers to allow each of the members to share information on pesticide programs and 11

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discuss ways to reduce damage to bees. It suggested solutions such as temporary relocation of hive boxes to safer places and the use of granulated insecticides instead of powder fertilizers and pesticides.

USDA Post Estimates Thailand 2015 Rice Exports to Decline to 10 Million Tons Due to Competition from Vietnam Jul 06, 2015

USDA Post estimates Thailand's 2015 rice exports at around 10 million tons against the earlier estimated 11 million tons due to a competition from Vietnam especially for 5% broken white rice.

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The Post revised its estimates based n the pace of Thai rice exports during the first five months of 2015. Thailand exported 3.8 million tons of rice during January - May 2015, down about 1.4% from the same period last year. It reports that white rice exports declined about 10% y/y during the five-month period as the prices of Vietnamese rice are lower than Thai rice. Currently, the price difference between Thai and Vietnamese rice prices (5% grade white rice, FOB) is $30 per ton, compared to around $20 per ton in May. The government is also very cautious in selling the rice stocks, which accumulated from the rice pledging scheme introduced by the previous government, in order to avert price falls. It sold around 2.1 million tons of government stocks in the first six months of 2015, compared to around 3 million metric tons in the same period last year.

The Post estimates Thai MY 2015-16 (January - December 2015) paddy rice production at around 27.3 million tons (around 18 million tons, basis milled), down 7% from last year due to drought. Around 1 million rai (0.16 million hectares) of main-crop rice in irrigated area in the central plains is expected to be adversely affected by drought. The government has reduced water supplies in the central region due to lower water levels in the Chao Phraya river basin. The country's second crop is also likely to be affected as water levels in reservoirs are expected to be low due to lower-than-expected precipitation between May and June.

Thailand's rice consumption in MY 2015-16 is expected to increase to around 12 million tons from an estimated 11.7 million tons last year as the government is planning to sell about 500,000 tons of rice to the industrial sector for ethanol manufacturers.

Brunei Stepping Up Efforts to Increase Quality of Rice Production, Says Minister Jul 02, 2015

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The government of Brunei is stepping up efforts to increase the quality of rice production rather than focusing on just increasing the volume, Brunei Times quoted the Minister of Industry and Primary Resources (MIPR).

The Minister who attended the forth planting of Padi Laila at the Kampung Limau Manis Agricultural Development Area (Kawasan Kemajuan Pertanian, KKP), which was organized by the Department of Agriculture and Agrifood (DAA), told reporters that the government is also planning to provide farming entrepreneurs with a quality planting system in order to support them to achieve quality yields by avoiding threats like birds, rodents, insects and pests. He noted that more research is needed to identify potential threats accompanying rice production.

Rice production is being carried out in KKP since 2013 by 21 entrepreneurs who completed a basic padi planting management course through the Brunei Rice Farmers Field School organised by the DAA and each entrepreneur manages two to three lots. The DAA had supported the KKP 14

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project with a concrete drainage and irrigation technology. The project yielded a total of 100,800 kilograms in the 2013-14 prime season, 42,000 kilograms in the off-season and 79,700 kilograms in 2014-15 prime season. The project sells its output to the government under a buy-back agreement.

In March this year, the MIPR Minister apprised the Parliament that the country produced around 1,380 tons of milled rice in 2014, up about 12% from 1,230 tons in 2013 and was far from achieving the 60% rice-sufficiency target by 2015. He noted that the Ministry has identified certain problem areas, which have to addressed to achieve a significant increase in rice production.

Brunei’s milled rice production has remained at around 1,000 tons since 2002, and the country imports most of rice required for domestic consumption. In 2008, the Sultan of Brunei said that Brunei Darussalam should not be dependent on other countries for its rice supply and should have their own strategic plan to ensure food security.

The USDA estimates Brunei's milled rice production to remain at 1,000 tons in the MY 2014-15 (January - December 2015), and estimates the country to import around 40,000 tons in MY 2014-15 to meet an annual consumption demand of around 41,000 tons.

Vietnam Rice Exports Decline Sharply in First Six Months of 2015 Jul 06, 2015

Vietnam exported around 2.713 million tons of rice in first half of calendar year 2015 (January – June), down about 10% from around 3.015 million tons of rice exported in first half of 2014, according to data from the Vietnam Food Association (VFA). Average rice export price so far in this year stands at around $417 per ton (FOB), down about 3% per ton from around $431 per ton recorded during same last year.

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In June 2015, Vietnam exported around 632,010 tons of rice, up about 20% from around 525,742 tons rice exported in May 2015, and down about 6% from around 671,174 tons rice exported in June 2014. Average export prices in June 2015 stands at about $406 per ton, almost down about 4% from a year ago, and down about 5% per ton from a month ago.

Vietnam Decides to Retain VAT on Domestic Rice Jul 06, 2015

The government of Vietnam has decided not to slash the value added tax (VAT) on rice consumed in the domestic market at the current 5%, according to local sources.

The Vietnam Food Association (VFA) reportedly recommended that the government slash the VAT on rice consumed in the domestic market to 0.5% in order to develop a rice brand in the domestic markets.

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However, the Finance Ministry opined that the VAT cannot lowered as there was no 0.5% tax rate in the existing VAT Law. The Ministry stated that if a new rate is added, it would not be in line with the VAT reform strategy for the 2011-2020 period. The Law basically aims at narrowing down the number of subjects for VAT imposition. It also noted that international law allow zero VAT only for exports and not for domestic consumption.

The Prime Minister reportedly approved the Finance Ministry's proposal.

According to data from the Ministry of Agriculture and Rural Development (MARD), during the 2010-15 period, less than 15% of the country's total rice output of about 22 million tons, was only subject to 5% VAT as the remaining was being used for exports and self-consumption.

Rice used for animal feed and fertilizers will continue to be exempted from VAT, according to local sources.

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