14th July, 2014 Daily Global Rice E-Newsletter by Riceplus Magazine

Daily Rice E-Newsletter by Rice Plus Magazine www.ricepluss.
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14
th
July , 2014

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Latest News Headlines
Rice acreage goes up in Louisiana, but prices fall
The US probe of rice trade wont yield much
China's summer grain output at record high
DA determined to pursue rice self-sufficiency goal
Aquino urged to stop rice imports, impose price control while
raiding rice hoarders
Korea to announce rice market opening next week
New Association Seeks To Improve Rice Market
Anti-graft agency probing rice deals, links to ministers
Alls Not Well in the Rice Market
News Detail

Rice acreage goes up in Louisiana, but
prices fall

J ul. 13, 2014 |

Daily Rice E-Newsletter by Rice Plus Magazine www.ricepluss.com

LAKE ARTHUR Rice prices have fallen because of a big jump
in Arkansas rice acreage, an LSU AgCenter agricultural economist
said recently at the Vermilion Parish Rice Field Day.Mike Salassi
said Arkansas acreage was approximately 1 million acres last year,
but it increased by 500,000 acres this year.The long-term price
forecast puts the long-grain price at $20 to $22 a barrel ($12.80 to
$13.80 per hundredweight), and $29 to $31 a barrel ($18.20 to $19.20
per hundredweight) for medium-grain.
Nationwide, the total rice acreage averages around 2.8 million to 3 million, Salassi said, but that total could exceed 3
million this year. But, he said, there has been a decline in medium-grain and short-grain acreage, as well as a reduction in
carryover stocks from last year.Louisianas total is estimated at 455,000 acres, compared to 420,000 for last year.Salassi
advised farmers to begin preparing for enrollment in the new farm bill after Jan. 1. He said several important decisions
will have to be made in the next few weeks, and the LSU AgCenter will have material to assist farmers with the decision-
making process.
Also at the field day, LSU AgCenter rice breeder Steve Linscombe said few acres of Jazzman rice are being grown in
Louisiana this year because of sharp competition from other countries in the overseas market. Most Jazzman rice grown in
Louisiana was destined for export markets, he said.Linscombe said a new Clearfield Jazzman developed by the LSU
AgCenter is being grown for seed this year, and it will be released for commercial production next year.Linscombe said
the new checkoff program approved by the Louisiana Legislature and signed by Gov. Bobby Jindal is a positive step for
rice research.
Without the checkoff program, he said, work at the Rice Research Station would be reduced.I promise you if we didnt
have the checkoff, we wouldnt be doing any work off-station, he said.Linscombe said off-station trials at the Lounsberry
Farm, where the field day was held, has been conducted for 30 years.
Image: Eric Webster, LSU AgCenter weed scientist, talks at the Vermilion Parish Rice and Soybean Field Day onat the Lounsberry Farm near
Lake Arthur. / Bruce Schultz/LSU AgCenter

The US probe of rice trade wont yield much
14.07.2014


Rice is a political commodity. Governments all over the world maintain regimentation on rice production and
trade through price controls and subsidisation, tariffs, phytosanitary and environmental safety standards
sometimes in a whimsical manner. On July 6, the United States International Trade Commission (USITC)
notified investigations (to be completed by April 2015) on global competitiveness of the US rice industry as
compared with other exporting countries like China, India, Indonesia, Thailand, Vietnam, Uruguay, and
Brazilthis assessment would also include practices adopted by major importing nations.

The intention perhaps is to probe the morality of international rice trade.US-milled rice, at $570-670/mt fob, is
grossly out-priced, by at least $200-$250/mt, by rice of Asian origin. The US output is 7 mt (milled) with export
of about 3 mt, mostly to Latin American nations. In 2014-15, Indias and Thailands exports may touch 10 mt
each, with Vietnam trailing at 7 mt.Despite the USs average paddy yield of 8-9 tonnes/hathe world average
is 4 tonne/hafarm price of paddy is about $350/mt (that makes milled rice $580/mt at conversion factor of
0.66). In India, paddy is priced at $235/mt, in Vietnam, at $240-$260/mt and in Thailand, at $480/mt till
recently (now, at around $260/mt). Is this difference in paddy prices that worry the US?

Market distortions
Paddy production in developing countries is incentivised through subvention of inputs like seed/fertiliser, etc,
and higher procurement prices while rice is discounted to poor consumers for vote-bank politics. Exports of
surpluses thus get directly or indirectly subsidised. At the same time, importing nations make rice expensive by
imposing high tariffs to protect domestic production/ inefficiencies, which are again followed by subvention to
the targeted beneficiaries, creating arbitrage opportunities for the market players. Paddy can be processed to rice
in many ways (raw, steamed, parboiled). By-products like husk, bran, bran oil and broken rice can also be
traded. Export pricing of rice thus gets discounted with realisation from such collaterals. Long/medium/short-
grain (nonbasmati rice) and aromatic (basmati) varieties can be mingled to average out pricing. Like in any
other business, for rice trade also, in the grey area of ethics of pricing a commodity, adherence to fair market
practices is diluted due to multiplicity of options available.

China's summer grain output at record high
Xinhua News Agency July 14, 2014 12:16pm
BEIJING, July 14 (Xinhua) -- China's summer grain output hit a record high of 136.60 million tonnes in 2014,
up 3.6 percent from last year, said the National Bureau of Statistics (NBS) on Monday.The total planting area
for summer grain crops expanded 0.1 percent from the previous year to 27.6 million hectares, the NBS data
showed.China's summer grain crops, mainly wheat and early-season rice, usually account for about 20 percent
of its annual grain output. Autumn grain crops, which include corn and middle- and late-season rice, account for
the remaining 80 percent.


NBS senior analyst Huang Jiacai pointed out that climate conditions had been very favorable to wheat
production this year, resulting in a higher per-unit yield of wheat.The latest bumper harvest of summer grain
may help ease concerns about China's ability to feed its 1.3 billion people amid soaring cereal imports in recent
years.Though cereal imports rose to more than 14 million tonnes in 2013, that accounted for less than 2.6
percent of the country's cereal output, according to the ministry of agriculture. In 2013, the country's grain self-
sufficiency rate stood above 97 percent.China also has a "red-line" guarantee that the amount of land dedicated
to arable farming shall never shrink to less than 120 million hectares.
DA determined to pursue rice self-sufficiency goal
Category: Agri-Commodities
14 Jul 2014

Written by Alladin S. Diega / Correspondent
THE government is not abandoning its rice self-sufficiency program, the Department of Agriculture (DA) said
on Monday.Saying that food security is included in the current administrations main list of concerns, [there is]
no change for the food-sufficiency target, Agriculture Secretary Proceso J. Alcala told reporters in a media
briefing.Its just like a household issue. Why depend on others if you can produce the food yourself? Alcala
said.The comment was prompted by latest reports stating that Presidential Assistant on Food Sufficiency and
Agriculture Modernization Francisco Pangilinan said 90 percent of rice sufficiency is enough and the rest will
be secured through rice imports.
Alcala said that, at present, rice sufficiency is already at 96 percent, adding that perhaps Pangilinan has yet to
review the full extent of the agricultural accomplishment or that he was just misquoted.Earlier, Agriculture
Undersecretary Emerson Palad said the administration is not abandoning its rice self-sufficiency target.In fact,
for 2015, the DA is targeting 100-percent self-sufficiency, which is not far-fetched coming from the current 96-
percent level, Palad said.In a statement, Rice Watch and Action Network, a rice non-governmental
organization advocate, said, We are worried over Secretary Francis Pangilinans plan to allow the private
sector to take over local procurement and the importation of rice as their solution to the problems besetting the
local rice industry.
Aurora Regalado, convener of the group, said, The government should allow the rice industry to fully develop
first, which is needed for a sustained and inclusive growth, before changes in the policy on rice subsidy is
welcomed.The groups urged the government to pursue its own Food Self-Sufficiency Program (FSSP).Under
the FSSP, the government, through the National Food Authority (NFA), is supposed to increase palay
procurement from local farmers.Regalado said traded global rice is considered scarce, with only 5 percent to 7
percent of the worlds rice production being exported.Rice is commonly consumed where it is produced,
Regalado said, adding that this finding was actually the reason the FSSP was conceptualized by the government
after a series of consultations from rice-industry stakeholders, primarily the farmers.


Alcala, noting that he is no longer a part of the NFA council, said should the NFA council decide to remove its
subsidy on the farmers, the council should be very careful, citing the experience in 2008, when the price of rice
at the international market shot up.The DA chief also said it is unlikely that President Aquino will abandon the
countrys rice self-sufficiency program.
Aquino urged to stop rice imports, impose price control while raiding rice hoarders
By Allan Nawal |Inquirer Mindanao
4:25 pm | Sunday, July 13th, 2014

RDAVAO CITY, Philippines Bayan Muna Representative Neri Colmenares urged President Benigno Aquino
III to stop the importation of rice and implement price control on the staple to stymie the rice cartel.

Colmenares said conducting raids against unscrupulous traders alone would not address the problem on rice
cartel, which has flooded the market with adulterated rice sold at high prices.President Aquino should
immediately stop import liberalization and deregulation policies and at the same time conduct the raids because
raids would be useless if imported rice continuously flood the market, which is controlled by the rice cartel, the
militant lawmaker said in a statement sent to the Philippine Daily Inquirer.

Colmenares said a price ceiling should also be enforced so as
to protect consumers because the cartel would try to jack up
prices.Imposing a price ceiling, which will immediately
penalize a violator with a maximum of 10 years imprisonment,
has more teeth than a suggested retail price, which will just
start an investigation, he said.Colmenares also said
Malacaang should train its focus on opportunistic rice traders
instead of small retailers.The small retailers do not have the
power to manipulate prices all over the country, only big time
cartels have that power, he added.In Digos City, Davao del
Sur Gov. Claude Bautista said the provincial government has
been closely coordinating with other government agencies to identify the sources of adulterated rice being sold
in the markets.

The National Food Authority (NFA) is important in the campaign against unscrupulous traders who mix
commercial rice with cheap imported varieties as it has the mandate to run after them, according to
Bautista.We can only do so much, Digos City Mayor Joseph Peas agreed.As of Sunday, none of the big
warehouses belonging to major rice traders in the province has been inspected.Felimon Cangrejo, provincial
NFA head, said they have been monitoring rice operations with the assistance of the polices Criminal
Investigation and Detection Group (CIDG).How come they could not find one? Adulterated rice are being
widely sold in Digos City for example. These were being passed off as well-milled variety, Editha Maliwanag,
who admitted having to return a sack of 7-tonner rice to a retailer for being adulterated, said.


Korea to announce rice market opening next week
Oh Kyu- wook
The Korea Herald
Publ i cat i on Dat e : 12 - 07- 2014
The Seoul government is set to announce its final plans for opening the rice market as early next week despite
strong objections from farmers as well as ongoing debates about high import duties, a pre-condition for the
market opening. We could no longer delay our decision. We have no other alternative, but to accept the market
opening by imposing tariffs (on rice imports), Yeo In-hong, vice minister of agriculture, food, and rural affairs
said during the last public hearing, held at the National Assembly on Friday.His comments came as the Seoul
government is set to make a decision on opening its rice market with the deadline set by the World Trade
Organisation approaching in September.
The vice minister said the ministry concluded that it would be a better choice to open the market by slapping
high tariffs on rice imports instead of putting off liberalisation to protect the local farm industry.The ministry
will reportedly announce tentative tariff rates for rice imports as early as next week, with experts predicting that
the import duties will range from 400 to 500 percent. The vice minister said the duty rate had not yet been
fixed. Local farmers are still divided over the market liberalisation. The Korean Advanced Farmers Federation,
a lobby group of local farmers, said they can accept the opening of the market if the government keeps tariffs
for imported rice as high as possible. The progressive Korean Peasants League, however, is strongly protesting
the market opening, citing worries about free trade agreements potential threats to the local agricultural
industry.
The government is saying there is no other option without even trying to begin negotiations (with WTO),
Park Hyung-dae, an official from the Korean Peasants League said Friday.The progressive farmers group
insists that the government should request a waiver from the WTO to keep its restrictions on imported rice,
though it still requires approval from the members of trade organization.The government said earlier it would
make its stance before the end of June but delayed its decision, citing more time needed to consult with the
National Assembly before it notifies the WTO in September.South Korea must make a decision on the rice
market as the current waiver deal with the WTO ends this year. The country was allowed to delay its rice
market liberalisation for 10 years under a 1993 agreement with the WTO in which the country agreed to
increase its minimum market access import quota by 20,000 tonnes per year. The government extended the
agreement by 10 years in 2004.
New Association Seeks To Improve Rice Market


uy Heimkhemra, VOA Khmer
14 July 2014
KANDAL PROVINCE
Cambodian farmers are looking toward a new organization to help them get the best prices for their rice, but many
are skeptical disparities between farmers and traders can be overcome.The Cambodian Rice Federation was started
in May, bringing together disparate companies, associations and farmers in a bid to stabilize market forces that have
traditionally left farmers vulnerable.Sitting in the shade of a palm tree one recent afternoon, farmer Phan Chantol
said he has received little help from previous associations.I know none of them, he said. Instead, he has had to sell
his rice at low prices to traders, who then sell it at a high mark-up.
So they all can earn more profits, the 33-year-old farmer said.Cambodia exported about 380,000 tons of rice in
2014. But economists say it could do a lot better. Poor yields and poor market structures have traditionally hurt the
industry, while neighbors Thailand and Vietnam have become international powerhouses in rice export.Before the
Cambodian Rice Federation was created, 84 companies and three associations were in operation for the collection,
production and export of rice.
But farmers remained highly vulnerable to the market and traders, forced to sell once their fields have yielded rice,
when there is a glut.The trader is king, when you talk about the price of rice, Phan Chantol said. We earn no
profits from planting rice; its just for eating. Now, most farmers in my village have decided to migrate to Thailand,
rather than grow rice.The new federation aims to change that.The Cambodian Rice Federation will be led by Sok
Puthyvuth, the son of Cabinet Minister Sok An, who as voted in at the inception of the organization by rice millers,
exporters and other industry leaders.Sok Puthyvuth told VOA Khmer the goals of the federation are to unite
shareholders in an effort to operate faster; to work with government authorities to solve problems in the sector; and
then to expand the rice exports to more countries.Our plan is also to go out and help farmers through education
about techniques to grow rice with high productivity and ensure proper rice prices for our farmers, he said.
The federation will have to convince farmers like Khouen Tith, 45, from Prey Veng province, who says the price is
just too low to make farming worthwhile. He and his wife now work in Kandal province, earning money each day
plowing land for other farmers.On a break at the corner of a rice field, he said there was no profit, compared to what
he spent on fertilizer alone. The rice was sometimes just enough for him to eat, and sometimes hed be caught in
some disaster or drought. I heard that theres a newly formed rice federation to help farmers, but I am not optimistic
it will help farmers, he said. All thats needed is fair payment for rice, he said.


Sok Puthyvuth said he hopes to address the price problem.Meanwhile, millers like Hean Vanhorn say the new
federation could help exports, especially if the Ministry of Commerce helps with organization and structure.Kim
Savuth, former president of the Federation of Cambodian Rice Exporters, which was absorbed into the new
federation, said he supports the unification.United, we will have more people and more ideas to work together, he
said. Otherwise, our work may have been repeated.
Anti-graft agency probing rice deals, links to ministers
PHUKET: The National Anti-Corruption Commission sub-panel is deeply probing alleged irregularities in the rice-
pledging scheme's financial transactions to identify possible nominees linked to five former ministers under investigation,
NACC deputy secretary-general Warawit Sukboon said yesterday.Facing graft probes in connection with the rice-
pledging scheme are ex-PM Yingluck Shinawatra, ex-commerce ministers Niwatthamrong Boonsongpaisan, Boonsong
Teriyapirom and Yanyong Phuangrach and former deputy commerce minister Poom Sarapol.
Warawit said the NACC was waiting for more information from banks and relevant state agencies. He said all the
information would be further examined in depth through analyses and syntheses to identify any irregularities in the
financial transactions made by the five ex-officials before they assumed and left their post.He said the graft panel would
also interrogate parents, spouses and children and other people linked to the five to see if there were any suspicions they
could have acted as nominees.The panel would meet twice a month to expedite the investigation.
If there were evidence the five had become unusually rich, the NACC would request that the Attorney General indict them
and confiscate their assets.
Warawit said the NACC could directly file petitions with the Supreme Court to prosecute them if it had suspicions that
any of them had committed asset concealment or submitted a false asset declaration.ML Panadda Diskul, permanent
secretary of the Prime Minister's Office, yesterday led a team of officials to inspect Udon Thani rice warehouses with
thousands of sacks of pledged rice under the rice-pledging scheme and found that 25 sacks of broken rice were
missing.Panadda said his team did not find any irregularities as the number of missing sacks was much lower than 5 per
cent of the total number of sacks and therefore the warehouses would not be probed further.
He said some sacks were infested with weevils and at one stage the inspection team - which included military officers -
had to flee a warehouse after being swarmed by weevils.The team used a forklift to ensure there were no attempts to cover
up rice theft. Previous checks had found that some warehouses managers had tried to deceive officials by neatly piling
rice sacks several metres high to form a four-sided wall but it was hollow inside the wall.Panadda rejected criticism that
the inspections were politically motivated, saying they were part of the move to regulate the rice sector to bring Thai rice
back to glory.
Alls Not Well in the Rice Market


Written by Samarendu Mohanty
SUN,13 JULY 2014

On the surface, rice markets remain calm and stable, but underlying market sentiments are rapidly changing
because of weather disruptions in many rice-growing nations. The global rice market faces the possibility of a
production shortfall in the major rice-growing regions in South and Southeast Asia and also in China because of
El Nio events. So far, the market has been quite nonchalant about this possibility because of large buffer stocks
in key rice-growing countries. Global rice stocks, at least on paper, have increased by 3680 million tons since
the rice crisis in 2007 (USDA: 36 million tons; FAO: 80 million tons). However, the majority of these increases
in rice stocks have occurred in three countries (India, China, and Thailand) and they have largely been held by
the state agencies.

Among these three countries, the Food Corporation of India (FCI), the nodal agency of the Indian government
for rice procurement, publishes the procurement stock level on its website on a monthly basis, whereas China
has always been secretive about its grain reserves. According to FAO, the current rice inventory in China is
close to 100 million tons, whereas USDA puts it close to 50 million tons. Despite these large stocks, China has
emerged as the largest importer of rice in the world in the past couple of years and nobody can provide a
satisfactory answer as to why China is suddenly importing so much rice. Similarly, Thai rice stocks have
ballooned in the past couple of years because of the pledging scheme implemented in late 2011, but there is a
lot of confusion among government officials and rice traders and millers on the level of pledged rice stored in
thousands of warehouses spread across the country. The Thai military government is now investigating 1,800
warehouses across the country to ascertain the quantity and quality of the stored rice.

El Nio Effects
Many rice-growing countries in South and Southeast Asia are cautiously optimistic about rainfall distribution in
the next couple of months that will determine the fate of the biggest crop of the year and is likely to shape the
direction of the market. In the case of India, the largest exporter in the world, where the wet season crop
accounts for more than 85% of the total crop, the southwest monsoon arrived in many rice-growing states 7 to
10 days late and has weakened in many parts of India since then. In the eastern state of Odisha, the monsoon
arrived in the third week of June and soon after disappeared.
In many parts of the state, paddy transplanting has not started yet. The agricultural director of the state told the
media on 9 July that, if rain does not return by the next week (15 July), then a million hectares of land cannot be
planted with rice this season, that is, a quarter of the total rice in the state. But, fortunately, rainfall started today
(12 July) and is expected to continue for the next few days. This should speed up transplanting in the state.
Several southern states such as Andhra Pradesh, Telangana, and Karnataka also face similar situations because
of deficit rainfall so far. The fate of millions of hectares of rice land is dependent on the revival of monsoon in
the next couple of weeks.Although the current government rice stocks of 25.5 million tons (as of 1 July 2014)


are at a very comfortable level, they have declined by 6 million tons from the 31.5 million tons at the same time
in 2013 (Food Corporation of India website, accessed on 10 July 2014).
In order to control rice prices, the government has recently allocated 5 million tons of rice for sale through the
Public Distribution System at heavily subsidized prices.The new government will be under pressure if planting
is substantially reduced because of the late revival of monsoon and it may take measures to restrict exports, at
least of nonbasmati rice, to safeguard the domestic food supply and keep enough in the warehouse to meet the
requirements of the domestic food subsidy program.The first line of action of the government will be to impose
a minimum export price for nonbasmati rice exports to keep more rice in the domestic market similar to what it
has done for onion in the past few weeks. In mid-June, the government imposed a minimum export price of
US$300 per ton and further increased the minimum export price to $500 per ton after two weeks.
If domestic rice prices continue to rise even after the imposition of a minimum export price, then some form of
quantitative export restrictions or even an outright export ban on nonbasmati rice is definitely a
possibility.Indias actions to combat drought will largely decide the fate of the global rice market in the next
few months. Its influence as the largest exporter of rice is a lot greater now than what it used to be in 2007. If
India remains open for business, the rice market will behave rationally and prices will be determined by
fundamental factors. However, if India imposes any export restrictions, particularly quantitative restrictions,
then the market might panic.

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