Daily Exclusive ORYZA Rice E-Newsletter

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October 15, 2015

Vol 5.Issue XV

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Oryza Overnight Recap Chicago Rough

Rice Futures Hammered Once Again
Overnight as Sellers Follow-through on
Yesterdays Action; Soy and Corn Supported
After Yesterdays Rally
Chicago rough rice futures for Nov delivery are currently noted 20 cents per cwt (about $4 per
ton) lower at $12.395 per cwt (about $273 per ton) ahead of early floor trading in Chicago. The
other grains are seen trading with mixed results overnight; soybeans are currently seen trading
about 0.4% higher, wheat is listed about 0.1% lower and corn is currently noted 0.4% higher.
U.S. stock index futures pointed to a slightly higher open on Wednesday amid earnings from big
name financial companies and some top-tier data releases that will be closely watched by
investors for hints on the strength of the U.S. economy. Earnings could be a particular challenge
for stocks this quarter, with analysts expecting a 4.8% decline in S&P 500 profits, according to
Thomson Reuters. So far, there's been a trickle of reports, but the season gains momentum
Wednesday with results from the major financials and others. On the data front U.S. retail sales
barely rose in September as cheaper gasoline weighed on service station receipts, while producer
prices posted their biggest decline in 8 months. August business inventories data are also due at
10:00 a.m. and the U.S. Federal Reserve's latest Beige Book at 2:00 p.m. Chinese inflation data,
released overnight also weighed on sentiment, cooling more than expected last month, adding to
concerns about the health of the world's second-biggest economy. The weak data weighed on
Asian and European stocks, with major indices in Europe falling in the region of 1% in midmorning London trade. Gold is currently trading about 0.7% higher, crude oil is seen trading
about 0.6% lower, and the U.S. dollar is currently trading about 0.5% lower at 8:15am Chicago
time.

California Rice Growers Estimate 2015

Output to Fall 8% y/y to 1.55 Million Tons
Oct 14, 2015

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Californian rice growers, who are midway through this year's harvest are expecting the state's
rice output to decline to around 1.55 million tons, down about 8% from around 1.68 million tons
in 2014, according to Capital Press.
The decline in output may be attributed to a decline on acreage as well as yields. Californian
farmers planted rice in about 148,000 hectares of land compared to about 172,400 hectares last
year due to water shortages. The state is enduring the fourth year of drought, which has led to a
significant decline in water levels in most of the reservoirs.
The yields are also expected to decline to about 7 tons per hectare, down from about 7.22 tons
per hectare last year.
Meanwhile, water shortages are likely to impact migratory bird habitat this winter, according to
the state's Farm Bureau. Californian farmers normally create about 120,000 hectares of managed
wetlands during the rice-growing season. But last year they could create only 40,000 hectares of
wetlands. This year, the Bureau expects them to create about 20,000 hectares.
Most of the rice growers are expecting prices to increase. If prices don't increase they are
concerned that their margins would suffer severely.
California is the second largest rice producing state in the U.S. after Arkansas and typically
contributes to about 25% of the total rice grown in the U.S. annually. The state's rice sector
employs about 25,000 people grows medium-grain rice and most of the rice grown here is
exported.
Currently, export prices of the U.S. medium grain rice stand at around $835 per ton, down about
9% from around $915 per ton at the beginning of this year.

Indonesia Will Decide on Rice Imports after

November 2015, Says Minister
Oct 14, 2015

Indonesia, which has signed purchase contracts with Vietnam and Thailand to import rice in case
of a need, will decide about the imports in November at the earliest or in December, according to
Reuters.
The Coordinating Minister for Economic Affairs told reporters that the decision would be taken
after looking at the harvests, which will continue till the end of October 2015.

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"We have reached agreements with Vietnam and Thailand. Based on the agreements, Indonesia
will decide on the time of the imports. When we put forth a request, they need a month to
dispatch," he was quoted.
Though the Agriculture Minister has been saying that the agency has about 1.7 million tons of
stocks and they are sufficient till the end of the year, increasing rice prices have become a cause
of concern. "The price of rice has increased by 10 percent over the last two months. It indicates
that the stocks are decreasing," the Minister said.
Indonesian rice production is likely to be impacted by a drought-inducing El Nino phenomenon,
which is expected ti be stronger than that than that experienced in the 1997-1998 period.

Oryza Afternoon Recap - Chicago Rough

Rice Futures Continue to Crater on Lack of
Action in Cash Market; Grains Reverse
Course as Traders Book Profits Following
Yesterday's Rally
Oct 15, 2015

Chicago rough rice futures for Nov delivery settled 45 cents per cwt (about $10 per ton) lower at
$12.145 per cwt (about $268 per ton). The other grains finished the day in the red as well;
Soybeans closed about 0.4% lower at $9.1050 per bushel; wheat finished about 2.1% lower at
$5.0825 per bushel, and corn finished the day about 1.4% lower at $3.7900 per bushel.
U.S. stocks traded mixed Wednesday as investors digested earnings reports and economic data.
U.S. retail sales barely rose in September as cheaper gasoline weighed on service station
receipts, while producer prices posted their biggest decline in 8 months. August business
inventories remained unchanged while economists expected a 0.1% increase. The U.S. Federal
Reserve's latest Beige Book is scheduled for release at 2:00 p.m. Overseas, equities were lower
after weaker-than-expected Chinese inflation data added to concerns about the health of the
world's second-biggest economy. In early afternoon trade, the Dow Jones Industrial Average
declined 99 points, or 0.58%, at 16,983. The S&P 500 traded down 3 points, or 0.15%, at 2,000,
with consumer staples leading four sectors lower and materials the greatest advancer. The
Nasdaq traded up 8 points, or 0.16%, at 4,804. Gold is trading about 0.1% higher, crude oil is
seen trading about 0.1% higher, and the U.S. dollar is seen trading about 0.1% lower
about 1:15pm Chicago time.

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Tuesday, there were 2,084 contracts traded, up from 765 contracts traded on Monday. Open
interest the number of contracts outstanding on Tuesday decreased by 2221 contracts to
12,471.

Nigeria to Collaborate with Brazil to Develop

Rice Sector, Boost Production
Oct 14, 2015

The governments of Nigeria and Brazil have decided to work together to enhance agricultural
research in Nigeria as well as boost food production and security in the country, according to
local sources.
The Permanent Secretary of Nigeria's Agriculture Ministry told local sources that the
collaboration would enhance investment in agricultural research in the country. He noted that
they are keen on transforming the working structure of Agricultural Research Council of Nigeria
(ARCN) on the lines of its Brazilian counterpart.
The work plan especially involves the development of the rice sector, which seeks to achieve
self-sufficiency in production. The Ministry is keen on borrowing ideas from Brazil to achieve
the task. The collaboration would particularly seek to improve rice cooperatives, rice value
chain, rice milling equipment and agribusiness activities.
"The partnership would see Nigeria attains self-sufficiency in agricultural production with the
application of technology, to improve its economy, said the Vice President of Nigerian-Brazilian
Chamber of Commerce & Industry.
Brazil has also reportedly offered to export rice to Nigeria and has sought the government to
relax the barriers on rice importation. However, the Nigerian Investment Promotion Commission
(NIPC) Executive Secretary noted that Nigeria is seeking Brazil's support in improving the
quality and quantity of rice production in the country as Nigeria itself is a major market.
We want to borrow a leaf from Brazil to be a major producer, consumer and be the net exporter
in the areas where we have the comparative advantage," she said.
A trade delegation from Brazil that visited Nigeria early this week noted that Brazil's
investments in Nigeria would focus on rice production, housing, and waste recycling.

Thailand Cancels Sales of 345,472 Tons of

Rice from Previous Auction
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Oct 14, 2015

The government of Thailand has cancelled sales of around 345,472 tons of stockpiles rice made
in the auction conducted on September 29, 2015, because prices have increased since the
auction, Reuters quoted the Commerce Minister.
Thailand will retain sales of around 100,000 tons made to four bidders, according to the
Permanent Secretary for Commerce. She told reporters that sales made to about twelve bidders
are cancelled due to low prices offered.
This is the seventh auction this year and eleventh one after the military government took over in
May 2014. . It sold around 4.56 million tons of stockpiled rice raising around 48.6 billion baht
(around $1.36 billion) in the ten auctions conducted since it took over in May 2014.
The military government still holds 13.5 million tons of rice in its stockpiles.
Export quotes of Thai 5% broken rice have been increasing over the past few weeks due to
increasing demand from the Philippines and other importing nations. They stand at around $360
per ton, up about $10 per ton from the end of September.

TPP Ensures Gradual Elimination of Rice

Import Tariffs in Member Countries
Oct 14, 2015

The Trans-Pacific Partnership (TPP) deal finalized last week has reportedly ensured that tariffs
on rice imports will eventually be eliminated by the member countries in the next ten years,
according to a statement by the USDA.
Japan, Malaysia, Vietnam and the U.S. have agreed to alter or gradually remove tariffs on rice
imports.
Japan, which has been adamant on increasing duty-free rice imports from the U.S. has agreed to
initially allow 50,000 tons of duty-free rice imports from the U.S. and gradually increase up to
70,000 tons by thirteenth year. Japan will reportedly increase imports from the U.S. by 2,000
tons from the fourth year of the agreement. Japan will also modify its quota administration to
enhance the transparency and effectiveness of the new country specific quota (CSQ). It has also

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agreed to immediately eliminate its 36 yen per kilogram (12.7% ad valorem equivalent) tariff on
other animal feeds, containing rice.
Malaysia will eliminate tariffs on rice, currently ranging from 15-40%, in ten years and lock in
tariffs on rice products at zero percent.
Vietnam will eliminate its tariffs on rice, which are currently at 40% with immediate effect. It
will also eliminate its tariffs on rice products, currently as high as 35%, in eight years or before.
The U.S. will eliminate tariffs on rice products, currently as high as 11.2%, in zero to 15 years.
Vietnam Plans to Develop National Rice Brand Based on Jasmine Rice Type
Oct 14, 2015

The Vietnam Food Association (VFA) is planning to develop a national brand for Vietnam's rice
based on the jasmine type, local sources quoted the Chairman of the VFA.
He told local sources that they selected the jasmine rice type because the fragrant rice exports of
the country have increased significantly in recent years. The proportion of fragrant rice exports
in the country's total rice exports has reportedly increased to 26% in the first nine months of
2015 from a meagre 3% in 2007. Price of fragrant rice also has consistently increased to current
$600 per ton from about $460 per ton in the past.

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The VFA Chairman noted that building a national brand would take time. They need to invest in
large-scale fields for fragrant rice production to secure stable supply, he said. The VFA is
planning to collaborate with a number of corporate partners to develp such fields.
Vietnam exported about 4.35 million tons of rice in January 1 - September 30, 2015, down about
9% from about 4.8 million tons of rice exported in first nine months of 2014, according to data
from the VFA. The average rice export price so far in this year stands at about $420.77 per ton
(FOB), down about 2.6% per ton from about $432 per ton recorded during same last year.
Export quotes for Vietnam 5% rice have increased during the past month due to new demand
from the Philippines. They currently stand at around $355 per ton, up about 9% from around
$325 per ton last month. However, they are still 19% lower from their year-ago level of around
$440 per ton.

Thailand Rice Sellers Alter Some of Their

Quotes Today; Other Asian Quotes Remain
Unchanged
Oct 14, 2015

Thailand rice sellers lowered their quotes for 100% rice and 5% broken rice varieties by about $5
per ton each to around $365 - $375 per ton and $355 - $365 per ton respectively. They increased
their quoted for Hom Mali rice by about $5 per ton to around $815 - $820 per ton. Other Asian
rice sellers kept their quotes unchanged.
5% Broken Rice
Thailand 5% rice is indicated at around $355 - $365 per ton about $5 per ton premium on
Vietnam 5% rice shown at around $350 - $360 per ton. India 5% rice is indicated at around $355
- $365 per ton, about $50 per ton premium on Pakistan 5% rice shown at around $305 - $315 per
ton.
25% Broken Rice
Thailand 25% rice is indicated at around $330 - $340 per ton, about 5% discount on Vietnam
25% rice shown at around $335- $345 per ton. India 25% rice is indicated at around $315 - $325
per ton, about $35 per ton premium on Pakistan 25% rice shown at around $280 - $290 per ton.
Parboiled Rice

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Thailand parboiled rice is indicated at around $365 - $375 per ton. India parboiled rice is
indicated at around $335- $345 per ton, about $70 per ton discount to Pakistan parboiled rice last
shown at around $405 - $415 per ton.
100% Broken Rice
Thailand broken rice, A1 Super is indicated at around $305 - $315 per ton, at par with Vietnam
100% broken rice shown at around $305 - $315 per ton. India's 100% broken rice is shown at
around $300 - $310 per ton, about $25 per ton premium on Pakistan broken sortexed rice shown
at around $275 - $285 per ton.

South Korea's 2015 Rice Output May

Increase Slightly on Better Yields, Says
Ministry
Oct 14, 2015

South Korea's rice production is estimated to increase about 0.4% to around 4.258 million tons,
basis milled, in 2015 from around 4.241 million tons in 2014 due to higher yields, local sources
quoted the Ministry of Agriculture, Food and Rural Affairs.
"Overall output is expected to increase marginally as the average yield from each unit area of 10
hectares is predicted to rise," the Ministry was quoted. "Favorable weather conditions from June
onward and almost no crop damage caused by parasites and typhoons are raising expectations of
better yields this year," it added.
Based on data from the Statistics Korea, the Ministry noted that the country's average yield is
estimated to increase to around 5.33 tons per hectare this year, up about 2.5% from around 5.2
tons per hectare last year. The paddy rice acreage in the country has declined to around 799,344
hectares, down about 2% from around 815,506 hectares, according to the Ministry.
The Ministry noted that it is planning to introduce measures for stabilizing market prices of rice.
Some of these measures include encouraging private processing units to buy more rice,
strengthening monitoring of imported rice and regulating the country's stockpile.
The country's current rice reserves stand at around 1.32 million tons. The Ministry is expecting
the demand for rice at around 3.97 million tons in 2016. The government is currently facing the
challenge of falling consumption and increasing stocks.

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The government opened its rice import market starting January 1, 2015 and decided to impose
tariffs of 513% on rice imports over and above its mandatory rice imports of 408,700 tons under
the World Trade Organization (WTO) minimum market access (MMA) quota.
Global Rice Quotes
October 15th, 2015
Long grain white rice - high quality
Thailand 100% B grade 370-380

Vietnam 5% broken

355-365

India 5% broken

355-365

Pakistan 5% broken

305-315

Myanmar 5% broken

415-425

Cambodia 5% broken

415-425

U.S. 4% broken 490-510

Uruguay 5% broken

535-545

Argentina 5% broken

530-540

Long grain white rice - low quality

Thailand 25% broken

330-340

Vietnam 25% broken

335-345

Pakistan 25% broken

280-290

Cambodia 25% broken 400-410

India 25% broken

315-325

U.S. 15% broken

500-510

Long grain parboiled rice

Thailand parboiled 100% stxd

365-375

Pakistan parboiled 5% broken stxd

405-415

India parboiled 5% broken stxd 335-345

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U.S. parboiled 4% broken

590-610

Brazil parboiled 5% broken

545-555

Uruguay parboiled 5% broken NQ

Long grain fragrant rice

Thailand Hommali 92% 820-830

Vietnam Jasmine

465-475

India basmati 2% broken

NQ

Pakistan basmati 2% broken

NQ

Cambodia Phka Mails

830-840

305-315

Vietnam 100% broken 305-315

Brokens
Thailand A1 Super

Pakistan 100% broken stxd

Cambodia A1 Super

275-285

355-365

India 100% broken stxd 300-310

Egypt medium grain brokens

NQ

U.S. pet food

330-340

Brazil half grain NQ

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

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