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Daily Exclusive ORYZA Rice Newsletter
Volume 5, Issue I
March 12, 2015
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Thailand Plans to Sell 780,000 Tons of Rice in
March 6 Tender
Mar 11, 2015
Thailand received bids for around 780,000 tons of rice of the one million tons auctioned in its
second auction on March 6, 2015, and the government may approve sale to all bidders who
tendered in the auction, according to Bloomberg.The National Rice Policy Committee chaired by
the Prime Minister is to approve the sales.The military government sold about 1.18 million tons
of rice from five auctions raising around 17.21 billion baht (around $528 million) since it seized
power in May 2014.The government currently holds 17.8 million tons and is planning to sell
around 10 million tons this year and around 7 million tons next year.Meanwhile, the government
is planning to sell the degenerated rice after August 2015 when the investigation against those
involved in the sales of low-grade rice is expected to be over. Local and foreign companies are
reportedly interested in buying the low grade rice for use in non-food industries.
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Perennial Rice: Revolution in Rice
Cultivation Mar 11, 2015
Rice is a labor and water intensive crop, and of late the global warming and climate changes
have been posing severe challenges for rice production thereby threatening the world food
security. Rice cultivation is also said to harm the environment by eroding soil fertility as well as
releasing harmful greenhouse gases into the atmosphere.
Researchers are working towards developing a perennial rice variety, which need not be planted
every year, and will yield good amount of rice for many years. Such a variety can be developed by crossing domesticated rice varieties with its wild predecessors, say researchers. Such a variety
are deep-rooted and so they can hold soils in place for a long time , survive extremes of weather
conditions and water supply.
Chinese scientists at the China-based Yunnan Academy of Agricultural Sciences are on the verge
of completing a decade long trials on a perennial rice variety PR23, which can provide yields
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similar to conventional rice varieties for over four years. China's National Science Foundation
and Land Institute have started a series of field trials on PR23 and once the Yunnan government
approves the variety, it may be grown commercially.
However, critics say perennial varieties are low yielding and would not be able to feed the
world's growing population. They also noted that one potential difference between the traditional
varieties and perennial rice varieties is that while traditional varieties divert 30-60% of their
energy to producing seeds, perennial varieties divert the same energy to growing roots to help
plants sustain for years.
Rising Imports and Continuing Political
Unrest Impact Bangladesh Rice Sector
Mar 11, 2015
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Bangladesh rice sector is facing severe trouble due to increasing imports and continuing political
blockades, according to local sources.Bangladesh's rice imports reached four year high as the
private sector has imported over 875,350 tons of rice from India so far in this fiscal year (July
2014 - June 2015) due to low prices in India. According to local sources, prices of mediumquality rice in India currently stand at about Tk 24.5-25.2 per kilogram (around $314-$323 per
ton) compared to Tk 27 per kilogram (around $346 per ton) of the same quality rice in Dhaka.
The increased imports have reduced demand for local coarse rice and millers are left with huge
stocks.
On the other hand, due to the continuing political blockades that started on January 5 this year,
prices of paddy and rice in the wholesale markets have declined drastically as traders are not
interested to buy paddy due to shutdowns and slow demand for local rice. According to local
traders, prices of paddy fell to around Tk 630 per 40 kilograms (around $202 per ton) from
around Tk 700 per 40 kilogram (around $224 per ton) during the same time last year. Farmersare also concerned that they are unable to breakeven this year due to high production costs and
low returns.
Traders also expressed concern that prices may still plummet once the Boro (January - May)
harvesting begins next month.Bangladesh produced around 34.449 million tons of rice, basis
milled, in FY 2013-14 (July - June), up about 2.7% from around 33.833 million tons produced in
FY 2012-13, according to the Agriculture Ministry.Bangladesh's 2015 rice imports are likely to
surpass both FAO and USDA estimations. The FAO estimates Bangladesh to import 400,000
Tons, down about 33% from an estimated 600,000 tons in 2014 due to an expected increase in
production in 2014. USDA estimates Bangladesh to import around 600,000 tons of rice in 2015,down about 20% from an estimated 751,000 tons imported in 2014.
Guyana Plans to Secure Additional 10,000
Rice Export Contract with Venezuela
Mar 11, 2015
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Guyana, which has recently secured the deal to export around 250,000 tons of paddy and rice to
Venezuela, is planning to secure export contract for another 10,000 tons as well due to lack of
lucrative export markets for its rice, according to local sources.The Guyana Rice Development
Board (GRDB) who left for Venezuela to sign the export deal yesterday told local sources that
Venezuela purchased around 250,000 tons of paddy and rice from Guyana under the Petro
Caribe deal in 2014. The government has decided to convince Venezuela to buy another 10,000
tons taking the total export figure to around 260,000 tons.
He noted that farmers are not convinced with the prices offered by new markets in the Central
America, North America and Europe. The Rice Producers Association (RPA) President addedthat there are markets for Guyana rice but Venezuela's prices for Guyana's high quality rice and
paddy are high compared to other countries' offers.The government also signed a contract with
Panama in August 2014 to export 50,000 to 60,000 tons annually. Though the contract has still
not been renewed for 2015, local sources say the government is optimistic about the continuation
of the contract.
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With an expected increase in production, the government has been exploring new markets for its
rice. The Agriculture Minister noted that the government has struck deals with new markets in
Central America and Africa apart from the existing markets.Guyana produced around 633,000
tons of rice in 2014, up about 18% from around 535,212 tons from 2013; and exported around501,208 tons of rice in 2014, up about 27% from around 394,000 tons exported in 2013,
according to the Agriculture Minister.
The Caribbean nation aims to produce about 618,000 tons of milled rice and export around
521,000 tons in 2015.USDA estimates Guyana to produce 633,000 tons of milled rice in the MY
2014-15 (January 2014 - December 2014) and export about 500,000 tons. The FAO estimates
Guyana to produce 570,000 tons of milled rice and export around 460,000 tons in 2014.
Thailand Rice Sellers Lower Some of TheirQuotes; India Rice Quotes Mixed Today
Mar 11, 2015
Thailand rice sellers lowered their quotes for Hommali rice by about $10 per ton to around $910
- $920 per ton. India rice sellers increased their quotes for 25% broken rice by about $5 per ton
to around $360 - $370 per ton and lowered their quotes for Parboiled rice and 100% broken rice
by about $5 per ton each to around $380 - $390 and $275 - $285 per ton respectively. Other Asia
rice sellers kept their quotes mostly unchanged today.
5% Broken Rice
Thailand 5% rice is quoted at around $395 - $405 per ton, about $30 per ton premium on
Vietnam 5% rice shown at around $365 - $75 per ton. India 5% rice is quoted at around $390 -
$400 per ton, about $45 per ton premium on Pakistan 5% rice quoted at around $345 - $355 per
ton.
25% Broken Rice
Thailand 25% rice is quoted at around $365 - $375 per ton, about $20 per ton premium on
Vietnam 25% rice shown at around $345- $355 per ton. India 25% rice is quoted at around $360
- $370, up about $5 per ton from yesterday and about $50 per ton premium on Pakistan 25% rice
quoted at around $310 - $320 per ton.
Parboiled Rice
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Thailand parboiled rice is quoted at around $400 - $410 per ton. India parboiled rice is quoted at
around $380 - $390 per ton, down about $5 per ton from yesterday and about $15 per ton
discount to Pakistan parboiled rice quoted at around $395 - $405 per ton.
100% Broken Rice
Thailand broken rice, A1 Super, is quoted at around $325 - $335 per ton, about $15 per ton
premium on Vietnam 100% broken rice shown at around $310 - $320 per ton.
India's 100% broken rice is shown at around $275 - $285 per ton, down about $5 per ton from
yesterday and about $5 per ton discount to Pakistan broken sortexed rice quoted at around $280
- $290 per ton.
China, Thailand Sort Out Details of Rice and
Rubber Deals Mar 11, 2015
Thailand and China have come to a clarity over details of a deal signed between the two
countries in December 2014 when the Chinese Premier Visited Thailand, according to
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Reuters.According to the deal, China agreed to buy around 2 million tons of rice and around
200,000 tons of rubber from Thailand. Today, representatives of both the countries sorted out
details of the deal. China has reportedly sought to buy 1 million tons of 5% broken rice from the
new crop and 1 million tons from the stockpiles in 2015-16.
The Thai Commerce Minister told reporters that both the governments will form a steering
committee to oversee the implementation of the deal. He also noted that Thailand's Department
of Foreign Trade and Rubber Estate Organization will work closely with China's state-owned
COFCO and Sinochem respectively regarding pricing details.Last year, China also signed
another memorandum of understanding (MOU) with Thailand to import one million tons of rice.
So far, Thailand shipped only 300,000 tons of rice to China. Sources at the Commerce Ministry
told reporters that Thailand is keen on completing the shipment of the remaining 700,000 tons
and has urged Chinese authorities to quickly take delivery of the same.The Commerce Ministry
sources also noted that the present deal is a positive indication for increase in future Thaiagricultural exports to China.
Oryza Overnight Recap – Chicago Rough
Rice Futures Higher Overnight as Grains
React Positively to Yesterday’s USDA S&D
Report
Mar 11, 2015
Chicago rough rice futures for May delivery are currently listed 5 cents per cwt (about $1 per
ton) higher at $10.495 per cwt (about $233 per ton) ahead of early floor trading in Chicago. The
other grains are seen trading higher this morning: soybeans are currently seen about 0.7% higher,
wheat is listed about 1.4% higher and corn is currently noted about 1% higher.U.S. stock index
futures pointed to a higher start to Wall Street trade on Wednesday, as European shares rose
following a global selloff on Tuesday. Markets remained jittery ahead of the Federal Reserve
meeting next week, at which the U.S. central bank could signal that it is getting closer to hiking
record low interest rates — potentially as soon as June. Meanwhile, the euro continued to slump
against the U.S. dollar, falling to $1.06 on Wednesday.
Bets are on as to when the euro could reach parity against the greenback, with the currency
pressured lower as the European Central Bank's quantitative easing program gets underway. This
has helped push the dollar to multi-year highs. Weekly mortgage applications dropped as rates
jumped, with the 1.3% decline driven mostly by a 3% drop in refinance applications, which
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makes up 60% of all applications. That volume was 80% in recent years. There will also be a
Treasury auction of benchmark 10-year notes.
The yield on Wednesday morning traded slightly higher to near 2.15%, below the key 2.28%level analysts are watching for. The U.S. government's oil inventory data will be of particular
interest, after the American Petroleum Institute reported the first weekly drop in crude supplies
in two months on Tuesday. The Fed will also publish further stress test results for large U.S.
banks, assessing their capital plans. Traders will also be keeping tabs on the debt negotiations
between Greece's newly installed left-wing government and the "troika" of international
institutions supervising its bailout program. Gold is currently trading about 0.2% lower, crude oil
is seen trading about 1% higher, and the U.S. dollar is currently trading about 0.7% higher at
8:00am Chicago time.
Oryza Afternoon Recap - Chicago RoughRice Futures Rally as Market Continues to
Derive Support from Bullish USDA S&D
Update
Mar 11, 2015
Chicago rough rice futures for May delivery settled 21.5 cents per cwt (about $5 per ton) higherat $10.735 per cwt (about $237 per ton). Rough rice futures rallied today, supported by firmer
grain prices and an apparent change of sentiment noted during mid-day trading today. Despite
getting off to a sluggish start and trading mostly sideways for the majority of the morning,
buying interest peaked later in the day and saw prices rally over 20 cents per cwt (about $4 per
ton) by the ringing of the closing bell. Traders will look to tomorrow’s close as an indication of
future trade direction, as a reversal lower could erase the technical importance of today’s gain.
On the other hand a continuation higher with a breakout above overhead resistance around
$10.800 per cwt (about $238 per ton) would likely trigger additional technical buying.
The other grains also finished higher today, led by an over 1% rally in wheat as the marketcontinues to react to yesterday’s bullish USDA S&D update; Soybeans closed about 0.8% higher
at $9.9275 per bushel; wheat finished about 1.2% higher at $4.9900 per bushel, and corn finished
the day about 0.8% higher at $3.9100 per bushel.U.S. stocks traded mildly lower on Wednesday
as equities failed to recover from Tuesday's selloff, amid continued concern over dollar gains and
the timing of a Fed interest rate hike. Oil futures extended losses on Wednesday after
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around 5.209 tons per hectare, up about 2% from around 5.108 tons per hectare recorded in the
previous year.USDA estimates Brazil MY 2014-15 (April – March) paddy rice production at
around 12.206 million tons (around 8.3 million tons, basis milled), unchanged from MY 2013-
14. It estimates Brazil’s 2014-15 paddy rice acreage also to remain at last year's level of around
2.4 million hectares. USDA estimates Brazil to export around 900,000 tons of rice and importaround 700,000 tons of rice in 2014.
Global Rice Quotes
March 11th, 2015
Long grain white rice - high qualityThailand 100% B grade 410-420 ↔Vietnam 5% broken 365-375 ↔
India 5% broken 390-400 ↔Pakistan 5% broken 345-355 ↔Myanmar 5% broken 415-425 ↔Cambodia 5% broken 425-435 ↔U.S. 4% broken 480-490 ↔Uruguay 5% broken NQ ↔Argentina 5% broken NQ ↔
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Long grain white rice - low qualityThailand 25% broken 365-375 ↔Vietnam 25% broken 345-355 ↔Pakistan 25% broken 310-320 ↔
Cambodia 25% broken 410-420 ↔India 25% broken 360-370 ↑U.S. 15% broken 470-480 ↔
Long grain parboiled rice
Thailand parboiled 100% stxd 400-410 ↔Pakistan parboiled 5% broken stxd 395-405 ↔India parboiled 5% broken stxd 380-390 ↓U.S. parboiled 4% broken 555-565 ↔Brazil parboiled 5% broken 570-580 ↔Uruguay parboiled 5% broken NQ ↔
Long grain fragrant riceThailand Hommali 92% 910-920 ↓Vietnam Jasmine 465-475 ↔India basmati 2% broken NQ ↔Pakistan basmati 2% broken NQ ↔Cambodia Phka Mails 790-800 ↔
BrokensThailand A1 Super 325-335 ↔Vietnam 100% broken 310-320 ↔
Pakistan 100% broken stxd 280-290 ↔Cambodia A1 Super 345-355 ↔India 100% broken stxd 275-285 ↓Egypt medium grain brokens NQ ↔U.S. pet food 380-390 ↔Brazil half grain NQ ↔
All prices USD per ton, FOB vessel, oryza.com
California Drought May Hold Global
Medium-Grain Rice Prices Firm, Says
Australian Rice Expert
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Mar 11, 2015
California's ongoing drought is expected to hold on the medium-grain rice prices firm and prevent them from falling, according to the CEO of an Australian rice processing company.The
official made these remarks ahead of the rice harvest in Australia's key rice growing area New
South Wales. Australia also produces medium-grain rice and California is a major competitor to
Australia in this segment.He noted that drought conditions in the U.S. state have led to drying up
of reservoirs and Californians are relying on snowpack, as it melts and flows into reservoirs.
However, the flow from snowpack also fell about 24% from last year. In this situation,
Californians are resorting to purchasing water for both domestic and agricultural purposes.The
Australian official expressed optimism that prices this year would remain firm in the U.S. as rice
producers who are likely to spend heavily on water for irrigation purposes may not allow prices
to dip unusually.California mostly produces medium-grain rice and is the second largest rice
producing state in the U.S. after Arkansas, and contributes to around 2 million tons of paddy rice
annually or about 25% of the total rice grown in the U.S. The state's rice sector, which employs
about 25,000 people and exports most of the rice grown here, had been impacted by drought last
year.
The state's paddy rice acreage in 2014 had declined to around 420,000 hectares, down about 25%
from around 525,000 hectares planted in 2013 due to prolonged dry conditions and water
shortages.Currently, export prices of the U.S. medium grain rice stand at around $870 per ton,
down about 5% from around $915 per ton in the beginning of this year.The Australian Bureau of
Agricultural and Resource Economics and Sciences (ABARES) forecasts Australia's paddy rice
production in MY 2014-15 (April 2014 - March 2015) to decline to around 684,000 tons (around
492,000 tons, basis milled), down about 18% from an estimated 833,000 million tons (around
600,000 tons, basis milled) in MY 2013-14 due to water shortages and corresponding reduction
in yields. The situation is likely to impact local prices in the short run.
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USDA Forecasts U.S. MY 2014-15 All Rice
Exports at 4.72 Million Tons, Up 11% from
Last Year
Mar 11, 2015
In its March World Agricultural
Supply and Demand Estimates
(WASDE) report, the USDA has
forecasted U.S. MY 2014-15 all rice
exports at around 4.72 million tons,
up about 11% from last year and upabout 1% from its February
forecasts.USDA forecasts the U.S.
long-grain exports to increase to
around 3.27 million tons, up about
14% from last year's 2.86 million
tons and up about 1.5% from last
month's 3.22 million tons based on
an expected increase in exports to
markets in the Western
Hemisphere.Accordingly, USDA
lowered its estimates for U.S. MY
2014-15 all rice ending stocks by
about 2% to around 1.86 million
tons from its last month's estimates
of around 1.9 million tons. It
estimates U.S. all rice ending stocks to increase about 25% y/y in MY 2014-15. USDA lowered
estimates for U.S. MY 2014-15 long-grain ending stocks by about 3% to around 1.23 million
tons from last month's estimate of around 1.27 million tons. It estimates U.S. long-grain rice
ending stocks to increase about 40% y/y in MY 2014-15.USDA estimates U.S. all rice farm prices to increase to around $308.64 - $321.82 per ton from last month's estimates of around
$302.03 - $315.26. It increased estimates for long-grain rice farm prices to around $268.96 -
$282.19 per ton and estimates for combined medium and short-grain farm prices to around
$399.03 - $416.67.The USDA has kept its forecasts for U.S. all rice production and imports
unchanged from last month.
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