You are on page 1of 12

LRI Monthly: January 2016

Email: info@livericeindex.com

Website: www.livericeindex.com

Tel: +44 (0) 1252 741 420 - Copyright 2016

Coming Soon...
The first in a new series of LRI Special Reports

Basmati 2015/16
- Forecasts for 2016
- In depth price analysis
- Detailed reviews of key markets
- Interviews with buyers & sellers

Exclusively available to purchase from the LRI Store (coming soon)


Email: info@livericeindex.com

Website: www.livericeindex.com

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 02

January 2016

El Nio and the future of the rice market

El Nio events, named after the Christ child due to their appearance at Christmas time, are a source of tremendous anxiety within agricultural markets. The LRI examines
whether El Nio, despite its disruptive power, may generate resilience within the market.
Since the first Agricultural Revolution occurred
around 10,000 years ago, weather has been
the key factor for farmers and subsequently for
agricultural markets. Farmers plant in accordance
with the weather which means that regular
and predictable weather patterns provide
routine peaks and troughs of supply, allowing
traders to plan the optimum time to fulfil their
requirements. Disruptions to this routine can
cause uncertainty and fear which can impede
the smooth functioning of markets and distort
prices. Unfortunately, weather is not always as
regular and predictable as we would like. There
are a number of atmospheric anomalies which
can cause huge disruptions to the usual global
weather system. Among these, it is El Nio which
currently holds the attention of agricultural
markets, not least in rice.
El Nio is credited with stimulating the
evolutionary process by putting biological
systems through periodic stress and it could
be said it is doing the same to the rice industry.
To prepare for the effects of an El Nio,
governments have promoted the development
and use of drought-tolerant rice varieties (for
example), which could prove vital to the future
of the industry. Climate change is going to
play an increasing role in grain production
throughout the 21st Century. If the industry can
learn from experiences during El Nio events,
they are likely to stimulate greater resilience to
the future climatic changes that scientists are
predicting. Although the current turbulence is
difficult, the rice market will have a stronger long
term future because of it.

The Science of El Nio

El Nio is a warming of waters in the eastern

Pacific Ocean, caused by a collapse or


weakening of westerly trade winds. The
warming water disrupts atmospheric
conditions in a related anomaly known as the
Southern Oscillation, which is often studied
alongside El Nio in what is called ENSO (El
Nio-Southern Oscillation). While scientists
use El Nio to specifically refer to the warming
of Pacific sea temperatures, it is commonly
used to describe the associated atmospheric
anomalies and so will this article. El Nio
events are classified as weak, moderate or
strong and happen around every four to seven
years, yet the strong events are much less
common. El Nio has likely occurred since the
end of the last Ice Age around 12,000 years ago
but it has only been studied in earnest since
the 1970s. The trigger for such events is still
unclear, yet it is now understood that El Nio
is a vital component of the worlds weather
system as it transfers excess energy (heat)
from the Tropics (where more heat enters the
atmosphere than is lost) to the Poles (where
more heat is lost than enters). Without these
periodic transfers of heat, the Tropics would
become too hot for human habitation and
regions close to the Poles too cold. During
an El Nio, heat is pushed towards the Poles
through winter storms which generally causes
drought in the tropics, heavy storms in the
subtropics and unusually hot weather closer to
the Polar Regions.
Among the most pressing concerns for the
rice industry is the impact that El Nio may
have on the Indian Southwest Monsoon,
which is vital for the development of the main
Indian Kharif crop that usually accounts for
20% of annual global production. As India

Email: info@livericeindex.com

shutterstock/NNCreated

El Nio is known to cause drought in Southeast Asia

is a tropical country, strong El Nio events


would generally be expected to correlate with
reduced rainfall, as it is with other countries in
the tropics. Indeed, during previous, milder, El
Nio events, such as in 2002/03 and 2009/10,
monsoon rainfall was reduced by 19% and
25% respectively, causing reductions in Indian
paddy production. However, as an example
of how complex global weather systems
are, both the 02/03 and 09/10 El Nios were
considered moderate events, while in stronger
El Nios, the Indian Monsoon has performed
slightly better. The 2015 Monsoon, during the
current strong El Nio, was reduced by 14%,
slightly better than had been expected, but
during the previous strong El Nio 1997/98
the Indian Monsoon was actually 2.2% above
average. The reason for this disparity is that the
Indian Monsoon is greatly affected by another
climatic event called the Indian Ocean Dipole
(IOD). Positive IODs generally have a beneficial
effect on the Indian Monsoon while negative
IODs generally have a weakening effect. In
1982/83 and again in 1997/98 the strong El Nio
correlated with a positive IOD, mitigating El
Nios impact. However, the moderate El Nio
events of 2002/03 and 2009/10 did not have a

Website: www.livericeindex.com

positive IOD to mitigate their effects which led


to a significant reduction in Monsoon rainfall.
The current strong El Nio is again correlating
with a positive IOD and once again the recent
Indian Monsoon was not as badly affected as first
feared. Meteorologists are still in the process of
understanding the IOD and it is unclear whether
strong El Nios will always correlate with a
positive IOD, or if it has just been a coincidence
so far.
El Nio has a related, yet opposite event called
La Nia which reverses the El Nio effects. A
return to normal conditions is possible, but La
Nia events tend to follow El Nio about 50%
of the time. La Nia generally causes opposite
conditions to El Nio, with stronger rains in the
tropics and drier conditions in the sub-tropics.
In 2010, La Nia conditions contributed to above
average monsoon rains across India, leading to
particularly heavy flooding in Pakistan.

Psychological hold on the market

Because of its ability to disrupt weather, El


Nio has a distinct psychological impact
on agricultural markets by making buyers
particularly nervous. Much of this psychological

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 03

January 2016
effect is due to uncertainty and market
participants look for early signals that a
disruptive event is coming. Often markets
will look for clues among other agricultural
commodities. For example, sugar traders will
sometimes look to rice for early signs of El
Nio. Yet the problem is that rice, like sugar,
responds only to the atmospheric component
of El Nio and not the warming of sea waters
which precede them. Among the most severely
affected agricultural commodities is fishmeal,
as the coasts of Peru - the country where a rise
in Pacific sea temperatures is most apparent
- also provides close to half of global fishmeal
production. While most softs react to changes
in atmospheric conditions, fish prices react
to the earliest component of El Nio events
changes in the sea temperature. As waters
off Peru warm, anchovies (the predominant
fish species in fishmeal production and a
commodity dominated by Peruvian exports)
seek cooler waters further south which
translates to much higher prices. In November
2014, before meteorologists had confirmed the
current El Nio event, Peruvian fishmeal prices
peaked at US $2,370 PMT an increase of 66%
from January 2014.
For rice in particular, El Nio is associated with
some dramatic purchases. In 1998, at a time of
reduced production in key exporting countries
such as Thailand, Indonesia entered the market
for more than 5 million MTS significantly
more than their usual requirements. The
prospect of such purchases happening
again creates substantial bullish sentiment
whenever another El Nio approaches and
which is especially true for strong events.
However, the imports in 1998 were not simply
weather-related as the country was not only
suffering from drought but also a financial
crisis. There were contemporaneous reports
that Indonesian consumers were making
significantly more purchases of rice than usual,

not just because of fears of drought but because


of fears of economic and political collapse. The
political situation in 1998 prevented any timely
intervention from the Indonesian Government.
However, Bulog entered the market much earlier
during the current El Nio cycle, purchasing 1.5
million MTS in early October last year to build
stocks ahead of anticipated shortages. The
importance of timely imports should be noted
because so long as consumers and traders
understand there are sufficient stocks to cover
requirements unti the next harvest, the prospect
of speculation and hoarding, as was seen in 1998,
are significantly reduced.

Supply side issues and benefits

El Nio does cause problems for producers, most


acutely in Asia where drought is a significant
issue during El Nio. During the 82/83 event
and the 97/98 event Thailand experienced
severe drought and Thai rainfall was significantly
reduced again during the current El Nio. The
Bhumibol Dam, on the Chao Phraya River, is
currently at just 7% of usable capacity and
the Government has continually encouraged
farmers to switch away from planting rice
during the off-season, which requires irrigation.
Although it is still too early to predict off-season
production as many farmers are ignoring the
Governments advice and continuing to plant,
the latest estimates from the USDA are that offseason production will be 47% below last years
level leading to a shortfall of around 4 million
MTS in 2016s production. Equally, Vietnam
also suffered during the previous two strong
El Nios and is again facing water shortages.
However, the latest estimates from the USDA
and from the Vietnamese Government are that
2016 production will be reduced by a little more
than 1% despite concerns that water shortages
and salinity will impact production. Planting has
in fact been aided somewhat by a reduction in
winter flooding, allowing Vietnamese farmers to
increase the planted area.

Email: info@livericeindex.com

For Asian producers, El Nio is an example


of the stress to come, with many scientists
predicting significant changes to the worlds
climate during the 21st century. A 2009 study
by the Asian Development Bank suggested
that climate change is likely to increase water
stress in both the Mekong Delta and the Chao
Phraya River Basin, two of the worlds key rice
production areas. There are ways to manage
the kinds of droughts associated with El Nio,
such as investment in water management
systems, the development of drought
tolerant seeds or the encouragement of less
water-intensive growing methods such as the
System of Rice Intensification.
While El Nio generally creates subdued
rainfall in Asia, the reverse is true in the
Americas. The rice growing region of South
America, centred around southern Brazil,
northern Argentina, Paraguay and Uruguay,
typically experience extreme rainfall
and flooding. During the 97/98 El Nio,
production was affected by delayed plantings
due to heavy rains. During the current El Nio,
the region was again beset by severe flooding
in December 2015. The latest estimates of
Mercosurs 2015/16 rice production anticipate
a fall in field yields and a reduction in planted
area due to the wet and cold weather which
has delayed planting. Total paddy production
for Argentina, Brazil, Chile, Paraguay and
Uruguay is anticipated to be 15 million MTS,
a 6.9% fall from 2014/15. While excessive
water is very disruptive in the short term,
there is a saying that rain makes rice. In the
year following the previous strong El Nio
in 1997/98, South America experienced one
of the best harvests on record, with both
field yields and milling yields described as
excellent. Indeed, in 1999 the milling yield
of South American rice was so good that
brokens supply was 35% down on the year
before, despite increased paddy production.

Website: www.livericeindex.com

In California, heavy rains have been more


welcome as the region has been experiencing
severe drought over recent years. While not clear
of drought conditions, the northern Sierra snow
waterpack is 120% of normal, a stark difference
to last year when the snowpack was the lowest
it had been in around 500 years, following the
historic drought.

Conclusion

The rice market was in a period of oversupply


when we entered El Nio in May 2015. African
demand remains very subdued due to low
oil prices which led to significant economic
problems and depreciating currencies.
Meanwhile the stocks built up by during the
Thai pledging scheme are currently at around 13
million MTS and the Government has committed
to increasing the volume released onto the
market this year as it attempts to liquidate its
stock. A recent report from the World Bank noted
that Thai 5% broken white rice prices actually
declined in Q4 2015, when El Nio was peaking
and it anticipates only slight price increases this
year, largely due to slow demand from emerging
economies. With last years prices reaching the
lowest levels since the LRI began conducting
price assessments in 2011, there are certainly
worse times for the market to absorb the impact
of a strong El Nio.
If the market can learn to cope with these drier
periods, optimising production and planning
purchases carefully so as not to distress the
market, then the market will be better placed to
survive the more chronic problems that we will
endure as a result of climate change. Just as El
Nio is credited with stimulating strength and
resilience within biological entities, if the rice
market can become more resilient as a result of
these testing times, it should help it prosper in
the long term.

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 04

January 2016

El Nio Indicators and Impacts Timeline


July 82 - Oct. 82
Poor monsoon causes
water shortages in
India. Export ban on
non-Basmati.

Nov. 82 - April 83
Heavy rains in South
America cause floods
in Paraguay, Argentina
and parts of Brazil.

1997/1998
Strong El Nio

Nov. - Dec. 97
Heavy rains and cold
weather force replantings in Argentina,
Uruguay and Brazil.

Dec. 97
Out of season
rainfall causes
flooding in
Pakistan.

2009
Weak El Nio

April - May 09
Brazil suffers its worst
flooding for 20 years.
Uruguay is also badly
affected.

August 09
Typhoons cause
flash flooding
across eastern
China.

2015
Strong El Nio

October 15
Cambodian
harvest
affected by late
monsoon.

1982/1983
Strong El Nio

December 15
Paraguay,
Argentina,
Uruguay and
Brazil suffer
severe flooding.

Email: info@livericeindex.com

Nov. 82
Reduced production in
Arkansas, Mississippi
and California as
flooding damages crop.

April 98
Dry weather
in Vietnam
reduces milling
and field yields.

Feb. 83
Indonesias droughtaffected crop is down
10% on expectations.

April 98
Despite adequate rainfall,
the Indian crop is poor with
high levels of chalky and
damaged grains.

Sept. 09
South and East Africa
suffers severe drought,
while W. Africa is hit by
severe flooding.

December 15
Paddy production in
the Philippines during
2015 reduced by
600,000 MTS due to
drought.

Website: www.livericeindex.com

June - Aug.
83
India imports
170,000 MTS.

May 98
Good weather aids planting.
Demand increases due to
poor Central and South
American production.

Sept. - Oct. 09
Late monsoon with
meagre rains in India
reduces crop by 15-18
million MTS.

Oct. 09
Tropical storms
cause heavy
flooding in
Northern Vietnam.

December 15
Concerns over
water levels in
Mekong River as
Vietnam enters dry
season.

December 15
California enjoys
heavy rain
and snowfall
throughout
Chritsmas
period.

Tel: +44 (0) 1252 741 420 - Copyright 2016

Sep. 83
Drought
reduces
Spanish crop.

May 98
Typhoon
and flooding
destroys stocks in
Bangladesh.

Oct. 09
Argentina
suffers worst
drought for 100
years.

December 15
Drought in Thailand
leads Govt. to
discourage offseason planting.

Page 05

LRI Timeline

January 2016

click here to access the LRIs Timeline

13 January
Indian paddy
procurement reaches
20.8 million MTS.

25 January
Trading Corporation
of Pakistan reject
lowest offer in their
tender for 15,000 MTS
of 5% broken white rice
destined for Niger.

18 January
Iran has economic
sanctions officially
lifted.

1 January
Markets closed
worldwide for New
Years Day.

22 January

Nigerian stocks
stand at around
60,000 MTS.

14 January

Syrian
Government hold
tender for 8,113 MTS
of 5% broken white
rice.

13 January
Japans MAFF
awards 4,304
MTS in SBS
tender.

World Bank
forecast
agricultural and
energy prices to
2020.

Japans MAFF
award full 57,000
MTS in their first MA
tender of 2016.

19 January
Chinese paddy
stocks forecast to
exceed 100 million
MTS in Q1 2016.

Email: info@livericeindex.com

E.U. announces next


tranche of duty-free
U.S. TRQ import
licences.

Website: www.livericeindex.com

16 February
Japans MAFF
hold SBS tender. for
30,000 MTS.

1 February
Col-Rice hold first
U.S. TRQ auction for
65,972 MTS of export
licences.

28 January

26 January

Gulfood trade
fair held in
Dubai.

February 2016

27 January

22 January

Trading
Corporation of
Pakistan announce
new tender for rice
destined for Niger.

World Bank
Report
recommends that
Vietnam improve
logistics.

21 February

Asian markets
closed for
Lunar New
Year.

2 February

Trading
Corporation of
Pakistan reissue
Niger tender.

January 2016
7 January

8 February

Japans MAFF
award 2,753 MTS
in SBS tender.

27 January

Thai Govt.
announce plans to
limit production to
25 million MTS in
MY 2016/17.

14 January

29 January

Egyptian GASC
delay import
tender.

16 & 17 February
Thai Govt. hold
first old crop
auctions of 2016.

3 February
Trading
Corporation of
Pakistan cancel
Niger tender for a
second time.

Tel: +44 (0) 1252 741 420 - Copyright 2016

18 February
Taiwan hold first
SBS tender of
2016.

Page 06

LRI Prices - 29/01/2016 Close, January Low and High


THAILAND - LONG GRAIN WHITE RICE
100% Grade B
5% Broken B
10% Broken
15% Broken
25% Broken
A1 Super 100% Broken

THAILAND - LONG GRAIN PARBOILED RICE


Parboiled Milled Rice 100% STX
Parboiled Milled Rice 100%
Parboiled Milled Rice 5% STX
Parboiled Milled Rice 5%

THAILAND - LONG GRAIN FRAGRANT RICE


Hom Mali White Rice 100% Grade B
Hom Mali White Rice A1 Super 100% Broken
Pathumthani Fragrant 100% Grade B

THAILAND - LONG GRAIN GLUTINOUS RICE


White Glutinous Rice 10% Broken

White Glutinous Rice 10% Broken (Sanpathong)


White Glutinous 100% Broken Rice A1

VIETNAM - LONG GRAIN WHITE RICE


5% Broken B
10% Broken
15% Broken
25% Broken
100% Broken Rice

VIETNAM - LONG GRAIN FRAGRANT RICE

CLOSE

LOW

HIGH

PAKISTAN - LONG GRAIN WHITE RICE

CLOSE

LOW

HIGH

U.S.A. - GULF LONG GRAIN RICE

CLOSE

LOW

HIGH

$380
$367
$365
$363
$349
$323

$363
$346
$344
$343
$333
$322

$380
$367
$365
$363
$349
$323

5% Broken B
10% Broken
15% Broken

$339
$334
$329

$330
$326
$320

$339
$334
$329

25% Broken
100% Broken Rice
386 2% Broken

$305
$285
$440

$300
$282
$440

$305
$285
$440

CLOSE

LOW

HIGH

PAKISTAN - LONG GRAIN PARBOILED RICE

CLOSE

LOW

HIGH

$369
$359
$364
$354

$350
$348
$350
$340

$369
$359
$364
$354

Parboiled Milled Rice 5% Broken STX


Parboiled Milled Rice 15% Broken STX

$360
$355

$356
$351

$360
$355

B
U.S. #2, 4% Broken, Hard Milled (FOB
Lake Charles)
U.S. #2, 4% Broken, Hard Milled (FOB bulk NOLA) B
U.S. #3, 15% Broken, Hard Milled (FOB bulk NOLA)
U.S. #5, 20% Broken, Hard Milled (FOB Lake Charles)
U.S. #1, Parboiled Milled 4% Broken (FOB bulk NOLA)
U.S. #2, Paddy, 55/70 Yield (FOB bulk NOLA)
Southern Flour Quality Broken Rice
Southern Pet Food Quality Broken Rice

$500
$470
$460
$455
$475
$280
$340
$300

$500
$470
$460
$455
$475
$275
$340
$300

$500
$480
$460
$455
$475
$285
$340
$300

U.S.A - CALIFORNIAN MEDIUM GRAIN RICE

CLOSE

LOW

HIGH

$690
$356
$555

$680
$345
$535

$690
$356
$555

CLOSE

LOW

HIGH

$790

$750

$790

$820
$580

$780
$570

$820
$580

PAKISTAN - BASMATI RICE


Super Kernel White Basmati Rice 2%
Super Kernel Parboiled Milled Basmati Rice 2%

INDIA - LONG GRAIN WHITE RICE


5% Broken B
25% Broken
100% Broken Rice
Swarna 5% Broken
Sharbati 2% Broken

INDIA - LONG GRAIN PARBOILED RICE


CLOSE

LOW

HIGH

$345
$343
$340
$334
$325

$345
$343
$340
$334
$325

$360
$357
$354
$343
$330

CLOSE

LOW

HIGH

Fragrant Rice 5% Broken

$425

$425

$440

KDM Fragrant Rice 5% Broken

$560

$555

$560

CLOSE

LOW

HIGH

5% Broken
10% Broken
25% Broken
A1 Super 100% Broken

$415
$410
$393
$335

$415
$410
$393
$335

$425
$415
$405
$360

CAMBODIA - LONG GRAIN FRAGRANT RICE

CAMBODIA - LONG GRAIN WHITE RICE

January 2016

CLOSE

LOW

HIGH

Phka Malis/Phka Rumduol (Wet Season) 5% Broken STX


Sen Kra Ob/Sen Pidao (Dry Season) 5% Broken STX

$760
$675

$750
$675

$760
$720

Fragrant 100% Broken A1 Super

$415

$415

$435

Email: info@livericeindex.com

Parboiled Milled Rice 5% STX

INDIA - BASMATI RICE


Traditional White Basmati Rice 2%
Traditional Brown Basmati Rice 2%
Traditional Parboiled Milled Basmati Rice 2%
Pusa White Basmati Rice 2%
Pusa Brown Basmati Rice 2%
Pusa Parboiled Milled Basmati Rice 2%
1121 White Basmati Rice 2%
1121 Parboiled Milled Basmati Rice 2%

Website: www.livericeindex.com

CLOSE

LOW

HIGH

$740
$790

$730
$780

$740
$790

CLOSE

LOW

HIGH

U.S. #1, 4% Broken


U.S. #1 Paddy, 58/69 Yield

$775
$386

$775
$386

$775
$425

S. AMERICA - LONG GRAIN WHITE RICE

CLOSE

LOW

HIGH

$470
$420
$455
$240

$470
$420
$455
$240

$485
$435
$460
$240

CLOSE

LOW

HIGH

Uruguayan 5% Broken
Argentine 5% Broken
Brazilian 5% Broken
Brazilian Broken Rice (1/2 Grain Brokens)

CLOSE

LOW

HIGH

$340
$320
$260
$293
$550

$340
$320
$257
$290
$550

$350
$321
$275
$293
$558

Brazilian Parboiled Milled Rice 5% Broken STX

$445

$445

$455

CLOSE

LOW

HIGH

Uruguayan Parboiled Milled Rice 5% Broken STX

$470

$470

$470

$338

$330

$338

CLOSE

LOW

HIGH

CLOSE

LOW

HIGH

$880
$760
$760
$660
$540
$590
$820
$660

$880
$760
$760
$660
$540
$590
$820
$660

$970
$780
$810
$730
$590
$620
$895
$740

$680
$670
$630
$620
$310

$680
$670
$630
$620
$300

$680
$670
$630
$620
$310

S. AMERICA - LONG GRAIN PARBOILED RICE

EGYPT - WHITE RICE

Medium Grain #2 5% Broken B


Medium Grain #3 10% Broken B
Round Grain #2 5% Broken B
Round Grain #3 10% Broken
100% Broken Rice Grade 0

= INDICATES BENCHMARK

Click here to access the LRIs weekly report

Tel: +44 (0) 1252 741 420 - Copyright 2016

page 07

Indica Rice

Fragrant Rice
 
 

 
 



click here to access the LRIs interactive price graphs






click here to access the LRIs interactive price graphs





 

Cambodian LG Phka Malis (Wet Season) 5% broken STX

Vietnamese 5% broken LG WR



 


 

 

Thai 5% LG white rice




Indian 5% broken WR



Thai LG Hom Mali 100% Grade B New

 







Pakistan 5% broken WR






January 2016

 

 

 

 

 

 

 

 

Vietnam LG Fragrant Rice 5% broken New

 

 




 

 

 

 

 

 

 

 

Indica rice prices from 1 January to 29 January, 2016

Fragrant rice prices from 1 January to 29 January, 2016

Thai 5% broken white rice firmed by US $21 PMT in January as a result of the reduced availability
of paddy. At the start of the month exporters purchased volumes from the local market to cover
shipments to Indonesia and the Philippines, before the price of Thai 5% broken stabilised at
US $351 PMT FOB. Uncertainty over off-season crop production encouraged mills to hold onto
existing paddy stocks which led to white rice prices firming at the end of the month, with Thai 5%
broken white rice closing at US $367 PMT FOB. Vietnamese white rice prices softened ahead of
the harvesting of the Winter/Spring crop, with Vietnamese 5% broken white rice ending the month
down US $15 PMT at US $345 PMT FOB as exporters completed their shipments for Indonesia and the
Philippines.

Thai Hom Mali 100% Grade B softened slightly at the start of 2016 to US $680 PMT
FOB FCL as arrivals of the new crop put pressure on prices. Demand also remained slow
throughout January as buyers preferred Vietnamese Fragrant 5% broken rice which was
trading at a US $245 PMT discount to Hom Mali at the beginning of the year, although there
were regular sales of Hom Mali made to Chinese buyers. Prices firmed after new crop
arrivals slowed in the latter half of the month and as the Thai Baht appreciated by around 1%
against the U.S. Dollar. Thai Hom Mali 100% Grade B closed January at a month-high of US
$690 PMT FOB FCL.

Pakistani and Indian white rice prices converged in January; prices in Pakistan firmed because of
an increase in demand from East and West African buyers, with exporters also covering bulk
shipments to Cuba and West Africa, while in India the availability of new crop paddy gradually
improved, leading to prices softening.
Prices across South America softened despite forecasts that El Nio would impact production for
the upcoming new crops, with Brazilian 5% broken white rice closing down US $5 PMT to US $455
PMT FOB FCL and Uruguayan and Argentine 5% broken white rice prices ending January down US $15
PMT at US $470 PMT FOB FCL and US $420 PMT FOB FCL respectively. The price of U.S. #2, 4% broken
white rice remained stable in January as U.S. exporters completed steady trade to regular buyers in
Haiti and Central America.

Email: info@livericeindex.com

 

Vietnamese Fragrant 5% broken rice gradually softened during January to reach US


$425 PMT FOB following a period of slow demand as many buyers waited for the arrival of
higher quality new crop from the Winter/Spring harvest which is due after the Lunar New
Year. However, there was demand for Vietnamese KDM Fragrant 5% broken from buyers
in West Africa, causing prices to firm slightly to US $560 PMT FOB in the latter half of the
month.
Although Cambodian Phka Malis 5% STX softened in mid-January by US $10 PMT to US
$750 PMT FOB FCL, demand from China, Malaysia and Europe caused prices to firm to US
$760 PMT FOB FCL by the end of the month. Although there was also cross-border demand
from Vietnam, Vietnamese buyers made purchases at aggressive prices and Cambodian
Sen Kra Ob was assessed down to US $675 PMT FOB FCL. The supply of fragrant broken rice
improved following the increase in milling to cover the sales and Cambodian Fragrant 100%
broken A1 Super rice softened by US $20 PMT during January to US $415 PMT FOB FCL.

Website: www.livericeindex.com

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 08

Parboiled Rice

Japonica Rice

 
 




 
 




click here to access the LRIs interactive price graphs



January 2016

click here to access the LRIs interactive price graphs

Californian MG U.S. #1, 4% broken Calrose

 

Thai LG PB milled 100% STX





Pakistan PB milled 5% Broken STX

 



Egypt White Rice MG #2 5% broken

 


 


 









 



India PB 5% STX





Californian MG rice U.S. #1 Paddy, 58/59 Yield





 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Parboiled rice prices from 1 January to 29 January, 2016

Japonica rice prices from 1 January to 29 January, 2016

Thai parboiled prices increased in January as they were supported by a tight supply of paddy in
the local market because mills held on to stocks due to concerns surrounding the prospects of the
off-season crop. Sales were subdued, however, due to ongoing issues surrounding trading directly
with Nigeria, although there were some small volumes sold to Benin. Parboiled supplies were also
tight due to a reluctance to run parboiling plants only to produce the small quantities in demand.
Thai Parboiled 100% STX closed the month up US $19 PMT at US $369 PMT FOB.

Californian medium grain #1, 4% broken (Calrose) was stable at US $775 PMT FAS FCL
Oakland throughout January. Exporters focused on sales to Japans Ministry of Agriculture,
Forestry and Fisheries (MAFF) which awarded U.S. exporters a total of 1,818 MTS in their SBS
tender and 26,000 MTS in their MA tender. China was awarded 12,000 MTS of milled medium
grain in MAFFs MA tender. Californian exporters also made some sales of small volumes of
Calrose to buyers in the Middle East and North Africa who were covering pre-Ramadan
requirements which also supported prices. The paddy market in California was extremely slow
with U.S. #1 Paddy, 58/69 Yield softening during the month to US $386 PMT Ex-works. Recent
rains in California have eased the states drought conditions with snowpack levels in the North
and Central Sierra at 125% and 118% of normal for this time of the year.

Sales of Indian parboiled rice also remained relatively slow for most of January, with few direct
shipments to Nigeria and low levels of trade to West Africa and Russia. However, increased sales
at the end of the month to West African destinations supported prices and Indian 5% STX ended the
month up by US $8 PMT at US $338 PMT FOB.
Pakistani Parboiled 5% broken STX increased by US $4 PMT to $360 PMT FOB in mid-January
as sales of paddy on the local market increased throughout the month as mills concentrated on
covering demand for white rice. However, despite some sales to East Africa, only low levels of
trade for Pakistani parboiled rice have taken place.
In South America, Uruguayan parboiled prices remained stable throughout the month, while
Brazilian parboiled prices softened by US $10 PMT in mid-January due to the depreciation of
the Real against the U.S. Dollar with sales being confined to regular buyers. Brazilian Parboiled 5%
broken STX closed the month assessed at US $445 PMT FOB FCL.

Email: info@livericeindex.com

 

Egyptian prices were assessed unchanged throughout the month with Egyptian Medium
Grain #2, 5% broken assessed at US $680 PMT FOB FCL. Egypts General Authority for Supply
Commodities have delayed an import tender to allow more time for importers to prepare
samples. GASC are importing rice to cover their domestic requirements due to a reluctance from
paddy stock holders to sell their stocks.
Taiwans Council of Agriculture has announced their 2016 CSQ volumes, including 64,634
MTS for the U.S. and 18,634 MTS for Australia.

Website: www.livericeindex.com

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 09

Up-Coming and Pending Tenders


AARQ
The Association for the Administration of Rice Quotas, Inc (AARQ) have announced the next
tranche of duty-free U.S. Tariff Rate Quota imports to the E.U. Bids for the rights to ship 19,360
MTS of U.S. rice to the E.U. duty-free must be submitted by 18 February.

January 2016

Taiwan
Taiwans Council of Agriculture (COA) has announced that their first Simultaneous-Buy-Sell
(SBS) tender of the year will be held on 18 February. The COA has chosen to hold one SBS
tender this year rather than the normal two tranches. The total 2016 Country Specific Quota
for brown rice is unchanged (see below). However, the volumes tendered for via the SBS
system from Australia and Thailand have been reduced from 8,300 MTS and 10,300 MTS
respectively to 6,500 MTS each. The balance has been transferred to the Normal tender
process. For more details, please see the table below:

Colombia

Country

Col-Rice will hold a Tariff Rate Quota auction for 65,972 MTS of export licences on 1 February for
shipment by 30 June. This will be Col-Rices first auction in 2016. The licences allow the successful
bidders to export U.S. rice duty-free to Colombia. In the last auction held in October 2015, the
licences were awarded to Bunge and Diana Rice at an average price of US $315.87 PMT.

Volume Available (MTS,


Milled Equivalent)

Shipping Period

1 February
2 June

65,972
13,694

1 February - 30 June
1 July - 13 October

13 October

14,543

14 October - 31 December

Total

94,209

Bid Date

Thailand

The Thai Government announced plans to hold their first old crop auctions of the year on
16 and 17 February. The first lot will comprise 204,000 MTS of rice for human consumption,
whilst the second lot of 360,000 MTS is for industrial use.
Stocks of old crop rice remaining in private hands are currently very low and the price of 5%
broken white rice 2012/13 Ex. Govt. has firmed in recent days to US $320 PMT FOB.

Japan

SBS tender (MTS)

Normal tender
(MTS)

2016
Rice CSQ
(MTS)

Egypt

2,500

2,500

Thailand

6,500

1,800

8,300

Australia

6,500

12,134

18,634

USA

35,600

29,034

64,634

Subtotal

48,600

42,968

94,068

Egypt
The Egypts General Authority for Supply Commodities (GASC) has delayed an import tender
to allow small and medium importers more time to deliver samples. The tender is expected
to be reissued within two weeks. GASC is importing rice, despite current domestic paddy
stocks of around 4.5 million MTS, as mills and paddy stock holders have been reluctant to sell
in expectation of higher prices. However, exporters are reporting subdued offshore demand
with Medium Grain #2 5% Broken offered at US $750 PMT FOB FCL. Prices have firmed
considerably due to tight availability, although exporters anticipate prices may soften when
GASC fulfils their requirements through imports.

Japans Ministry of Agriculture, Forestry and Fisheries (MAFF) have announced a new
Simultaneous-Buy-Sell (SBS) tender for 30,000 MTS which will be held on 16 February.

Email: info@livericeindex.com

Website: www.livericeindex.com

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 10

January 2016

Tender Results

Japan

Japan
Japans Ministry of Agriculture, Forestry and Fisheries (MAFF) awarded the full 57,000 MTS of
milled rice in their 22 January Minimum Access tender. For more details please see the table
below:
Variety

Awarded
Origin

Volume
(MTS)

Shipping Date

non glutinous milled MG

USA (CSQ)

13,000

20 April - 20 May

non glutinous milled MG

USA (CSQ)

13,000

20 April - 20 May

non glutinous milled MG

China (GQ)

12,000

20 April - 20 May

non glutinous milled LG

Thailand (GQ)

7,000

10 April - 20 May

non glutinous milled LG

Thailand (GQ)

6,000

10 April - 20 May

non glutinous milled LG

Thailand (GQ)

6,000

10 April - 20 May

Total

Japans Ministry of Agriculture, Forestry and Fisheries awarded a total of 2,753 MTS out of
a possible 30,000 MTS in their 29 January Simultaneous-Buy-Sell tender. For more details,
please see the table below:

Variety

Origin

glutinous brown SG
non-glutinous brokens
glutinous brokens
non-glutinous brown SG
non-glutinous milled SG
non-glutinous milled MG
non-glutinous milled LG
non-glutinous brokens
glutinous brokens
non-glutinous milled MG
Total

USA
USA
USA
Australia
Australia
India
Thailand
Thailand
Thailand
China

Volume
(MTS)
430
800
120
345
200
40
220
400
162
36
2,753

57,000

MAFF also awarded a total of 4,304 MTS out of a possible 30,000 MTS in their 13 January
Simultaneous-Buy-Sell (SBS) tender. For more details, please see the table below:

Variety

Origin

glutinous milled SG

USA

Volume (MTS)
528

non-glutinous brown SG

USA

240

non-glutinous milled MG

USA

620

non-glutinous brokens

USA

1,300

glutinous brokens

USA

200

non-glutinous milled SG

Australia

200

non-glutinous milled LG

Pakistan

172

non-glutinous milled LG

Thailand

224

non-glutinous brokens

Thailand

560

non-glutinous brokens

China

260

Total

4,304

Email: info@livericeindex.com

Website: www.livericeindex.com

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 11

Harvest Update - January 2016

January 2016

click here for further harvest information from the LRI website

Planting

Harvesting

Alert

Thailand

Mexico

Paddy production
estimated down 25%
to 195,000 MTS as cold
weather reduces planted
area in Tabasco State.

Mali

Harvesting of the rainfed


crop almost complete.
Paddy production
expected to increase by
13% to 2.4 million MTS.

Main crop harvest is


nearing completion.
Attention is now moving
to the off-season harvest,
which is expected to be
significantly reduced due to
water shortages.

Vietnam

Planting of main Winter/


Spring crop underway.
Prospects for production
are good, although there
are concerns over low water
levels in the Mekong River.

Philippines

Harvesting of off-season
crop ongoing. Milled rice
production in 2015/16
forecast down 3.3% to
11.52 million MTS.

Peru

Planting of the main


season paddy crop
underway. Concerns
remain over effect of El
Nino, although rainfall
currently above-average.

Email: info@livericeindex.com

Senegal

Indonesia

Good weather and


Govt. support result in a
64% increase in paddy
production to 917,000
MTS.

Website: www.livericeindex.com

Planting of the main season


paddy crop delayed by belowaverage rainfall in October.
Yields of ealy-planted crops
expected to be negatively
affected.

Tel: +44 (0) 1252 741 420 - Copyright 2016

Page 12