Thursday, October 13, 2011

2011 typhoons destroy 1.4M MT rice – Agri Dept.

As much as 1.4 million metric tons (MT) of paddy rice (palay) were lost during the last six typhoons that hit the Philippines this year.

According to the Department of Agriculture (DA), the damage from Typhoons Egay and Falcon, both of which occurred last June, amounted to a loss of 51,645 MT, while Typhoon Juaning, which came in July, resulted in a loss of 26,324 MT. Typhoon Mina, which occurred in August, claimed 64,199 MT.

The most recent typhoons, Pedring and Quiel, both of which barreled through Luzon last September, damaged 760,207 MT, the DA added.

“The Department of Agriculture should rethink its rice importation program for 2012. Given the magnitude of lost palay, 500,000 MT (rice importation) is not enough to plug the shortfall," a rice trader who refused to be named said in an interview Wednesday with reporters.

After discounting the consolidated grain loss, the DA said expected palay output for the second half is now at 8.483 million MT.

Given the total rice requirement of 6.256 million MT from July to December 2011, the country will have a rice inventory of 2.606 million MT starting January 2012, or 23 percent lower than 2011’s beginning inventory of 3.425 million MT.

The beginning inventory is good for 76.7 days, according to the DA.

The NFA is required to maintain a 30-day minimum inventory of 930,000 MT, according to the Bureau of Agricultural Statistics. Average daily rice consumption was pegged at 31,000 MT.

To ration rice seeds

In a report to the Senate on Oct. 10, the DA said it already launched a massive campaign to ration rice seeds covering a 100,000 rain-fed hectares that can contribute as much as 125,000 MT of palay.

The program is estimated to cost P130 million.

The DA is also giving subsidized seeds based on validated damage reports, as well as access to fertilizer under the Plant Now, Pay Later program of the Bureau of Soils and Water Management.

In addition, the Agricultural Credit Policy Council has created a provision for up to P400 million in credit through the Agribusiness Enterprise and other service providers.

The DA expects palay production to reach 19.8 million MT by 2012, 21.934 million MT by 2013, 23.596 million MT by 2014, 23.891 million MT by 2015, and 24.96 million MT by 2016.

The demand for rice is equally projected to reach 20.9 million MT in 2012, 21.12 million MT in 2013, 21.56 million MT by 2014, 22.02 million MT by 2015, and 22.49 million MT by 2016.

The DA is keeping its assessment of the planned rice importation for 2012, until the expected losses from the October typhoons have been factored in by its field offices. The department will announce next November a revised importation volume based on the evaluation of standing as well as destroyed rice crops.

Government said that bidding for the proposed importation should be conducted next year, and the shipments’ arrivals should "be timed during the lean months starting July."

Thai floods damage rice, threaten exports

* Thai floods also seen delaying rice shipments
* Thai prices to climb, Vietnam rice hits 3-yr high
* Vietnam rice export defaults to reach 520,000 T
* Typhoon rice damage climbs to 1 mln T in Philippines

Thailand's worst floods in half a century have inundated farms and mills, squeezing rice supplies from the world's top exporter, while rival Vietnam is expected to default on half a million tonnes as prices of the staple climb.
Flood-damage to Thai rice comes as the nation's new government implemented a scheme that gives farmers a big increase in farmgate prices, raising concerns over food inflation among buyers in Asia, the Middle East and Africa.
Swollen rivers were hampering the movement of barges, while ships at the ports were unable to load cargoes in the face of heavy rains, traders said on Wednesday, adding that at least 300,000 tonnes of rice exports would get delayed, forcing buyers to seek alternatives such as from India and Pakistan.
"The situation is really bad as it is raining non-stop, a lot of mills have been affected and a lot paddy which was lying around in the open or under tarpaulin has got submerged," said a trading manager with an international rice exporter in Bangkok.
"We see it as a serious problem."
The floods have already prompted the government to reduce its estimate of the main rice crop to 21 million tonnes from 25 million for which the harvesting was due to start this month.
"Even loading for vessels which are waiting for cargo will get delayed," said another trader from Bangkok. "It is raining heavily, so loadings have fallen and it is difficult to get cargoes alongside the vessel."
Thailand's prime minister warned businesses not to take advantage of flooding around the country to push up prices as residents of Bangkok cleared supermarket shelves, worried that the capital could be swamped in coming days.
At least 281 people have been killed by heavy monsoon rain, floods and mudslides since late July and 26 of Thailand's 77 provinces are inundated, said the Department of Disaster Prevention and Mitigation.
The north, northeast and central plains have been badly affected and Bangkok, which is only two metres (6.5 ft) above sea level, is in danger as water overflows from reservoirs in the north, swelling the Chao Phraya river.
But the floods have limited impact on sugar output, Thailand's other major export, with about 200,000 rai of cane plantation hit, said the Office of the Cane and Sugar Board, accounting for 2-3 percent of the 8.7 million rai (1.4 hectares) of plantation estimate for 2011/12 production.
The export price of Thai benchmark 100 percent B grade RI-THWHB-P1 white rice rose to $670-$680 a tonne last week from $650, while Vietnamese rice climbed to its highest in more than three years on thin stocks and expectations of higher demand.
On Wednesday Vietnam's 5 percent broken rice stood at $575-$590 a tonne, FOB, against $575-$580 a week ago. It touched $580-$590 on Monday.
Vietnam, the world's second-largest rice exporter, could default on deliveries of 520,000 tonnes of the grain this year as exporters failed to buy on domestic markets for loading due to a price surge, a state-run newspaper reported.
The projected defaults would account for 7 percent of Vietnam's annual export volume forecast at 7.5 million tonnes this year, breaking the record of 6.83 million tonnes in 2010.
The market is expecting higher rice demand in 2012 from the Philippines, where the volume of unmilled rice damaged by two recent typhoons has climbed to about 1 million tonnes, a senior agriculture official said.
"The price is rising to intercept the Philippines' demand," a Vietnamese trader in Ho Chi Minh City said. "The Philippines will buy for next year, following the impact of storms and floods and a decline in stocks."
President Benigno Aquino said the Philippines did not need to import more rice for this year's supply despite crop losses from typhoons because it had ample stocks. However, officials have said it was reviewing import plans for 2012.
Before the strong typhoons hit major rice-growing provinces in northern Philippines, the government had said it could limit rice imports for 2012 to not more than 500,000 tonnes on anticipation of a record paddy output of 17.3 million tonnes.
The Southeast Asian country bought 860,000 tonnes of rice this year, after importing 2.45 million tonnes for 2010, making it the world's biggest rice buyer.
India, which eased curbs on rice exports in September, is likely to make the most of the situation in Southeast Asia with plentiful stocks.
"We estimate about 1.0-1.5 million tonnes of Indian rice have been contracted for exports after the government freed overseas sale," said Vijay Setia, president of the All India Rice Exporters Association.
Traders said about 700,000 tonnes would be shipped by December from ports on India's east coast to destinations such as Bangladesh, Nigeria and South Africa. The export deals are happening in the range of $420-$480 a tonne, free on board (FOB) basis, for common rice.
On Sept. 1, India's rice stocks at government warehouses stood at 22.7 million tonnes against a target of 9.8 million tonnes.
India's summer rice production is expected to be 87.1 million tonnes in the crop year 2011/12, compared to 80.65 million tonnes a year ago, according to the farm ministry's first of the four forecasts released on Sept. 13. (Additional reporting by Jutarat Skulpichetrat in BANGKOK, Ratnajyoti Dutta in NEW DELHI and Erik Dela Cruz in MANILA;

Thai Rice Damage May Push Up Global Prices, Mohanty Says

Damage to rice crops from Thailand to Philippines may “push up” prices this year as global production of milled rice may be less than previously forecast, according to the International Rice Research Institute.
Flooding in Thailand, the biggest exporter, may have damaged as much as 5 million metric tons of paddy, while a typhoon in Philippines and flooding in Cambodia and Laos will trim rice output, Samarendu Mohanty, a senior economist at the institute, said in New Delhi today. Global production of milled rice may be as low as 455 million tons in the year that began on Sept. 1, less than the 460 million forecast last month, he said.
Reduced rice supplies, the staple for half the world, may fuel a 21 percent rally in prices in the past year in Chicago and boost global food costs that the United Nations predicts will remain high and fluctuating as demand rises because of economic growth. Damage to crops may boost import demand for rice, Robert Zeigler, director-general of the institute, said in a separate interview.
“There will be supply-demand imbalances by the end of this year and early 2012,” he said. “There may be price volatility in rice because of weather problems.”
Prices of Thai white rice may climb 21 percent to $750 a ton from $619 a ton today because of crop damage and Thailand’s plan to buy rice from farmers above market rates, said Sumeth Laomoraphorn, chief executive officer of C.P. Trading Co., Thailand’s fourth-largest exporter. Rough-rice futures for November in Chicago climbed as much 1.6 percent to $16.23 per 100 pounds today.
Thai Stockpiles
Thailand last week started a government-purchase program, at prices as much as 44 percent above market rates, to boost crop prices and rural incomes. Global rice prices will depend on what Thailand does with the rice it buys from growers, rice institute’s Mohanty said.
“The damage to the crop in Thailand might put upward pressure on prices,” Mohanty said in an interview. “Thai export policy is not very clear. Global prices will depend on the rice export policy in Thailand.”
Flooding devastated crops mostly in Chao Phraya basin in central Thailand and paralyzed shipments, C.P. Trading’s Sumeth said by phone today. The nation’s exports may halve to about 500,000 tons a month from October to December, he said.
“Thailand, Cambodia and Vietnam are facing the same destiny but supplies from India will make up for the decline in production, limiting a chance of rice price rally,” Sumeth said.
Indian Exports
India, the world’s second-largest producer, allowed private companies to export non-basmati rice for the first time in more than three years in July after state-run stockpiles reached a record. Shipments from the South Asian nation may total 4 million tons in the year from April 1, according to the All India Rice Exporters Association.
Indian shipments will account for 11 percent of global trade this calendar year, overtaking the U.S. and Pakistan to become the third-largest shipper, according to the U.S. Department of Agriculture, or USDA, in a Sept. 12 report.
“India should export more to benefit at a time when Thai rice is not very competitive,” Mohanty said.

Vietnamese rice export prices rise to three-year high

Vietnamese rice export prices rose up to 2 percent on Monday to their highest level in more than three years after the government of neighbouring exporter Thailand began a purchasing scheme last week that gives farmers a hefty premium. The 5 percent broken rice strengthened to $580-$590 a tonne free on board (FOB), up around 1.3 percent from $575-$580 last Wednesday. The $590 level is the highest since the $600/tonne price on September 10, 2008.
The 25 percent broken grain rose 1.9 percent to $530 a tonne, FOB, from $520 last week. The government of Thailand, the world's biggest rice exporter, is paying farmers 15,000 baht ($483) a tonne for unmilled rice from October 7 to the end of February, which covers the harvest of the main crop. That compares to a market price of 10,000 baht last week and just 7,000 to 8,000 baht in June."Foreign demand is nearly frozen, while in the domestic market speculators raised prices," a trader in Ho Chi Minh City said. Vietnamese traders are stocking up on rice in anticipation of gaining customers put off by Thailand's higher rice prices. In the Mekong Delta, where seasonal floods are at their highest level since 2000, paddy prices rose slightly to 6.2-7.5 million dong ($298-$360) per tonne on Monday from 6.2-7.3 million dong last week, after a major crop harvest has come to an end.Floods could stay high until the end of this month, state forecasters said. Damages so far on a third minor crop in the Delta are limited, but high flooding prevents the operation of rice mills and raise production costs, traders said. Indonesia has overtaken the Philippines to become Vietnam's top rice buyer this year, having bought 17 percent of the country's export volume in the January-August period, followed by the Philippines with 16 percent, the Agriculture Ministry said.The Philippines could buy a small volume of rice from Vietnam late this year, while Indonesia's earliest order would be from February 2012, the Planning and Investment Ministry-run Dau Tu newspaper quoted a Vinafood executive on Monday as saying. The Vietnam Food Association has advised exporters to sign contracts only when they have stocks to avoid losses or defaults on deliveries due to failure in buying grain in the domestic market for loading, Dau Tu reported.

WASDE: Rice Production Down 4.0 million from Last Month

U.S. rice production in 2011/12 is forecast at 186.9 million cwt, down 4.0 million from last month and the smallest crop since 1998/99. The decline is entirely due to a decrease in yield.  Average yield is estimated at 7,123 pounds per acre, down 150 pounds from last month.  Harvested area is unchanged at 2.62 million acres.  Long-grain production is forecast at 116.8 million cwt, 2.5 million below last month and the smallest crop since 1996/97.  Combined medium- and short-grain production is still a record forecast at 70.1 million cwt, down 1.5 million from last month.  The import forecast is unchanged at 19.0 million cwt.  Domestic and residual use for 2011/12 at 127.0 million cwt is unchanged from a month ago.  Total rice exports are projected at 91.0 million cwt, down 2.0 million from last month.  The decrease is entirely in the milled and brown rice category, as the rough rice export forecast is unchanged.  Long-grain and combined medium- and short-grain export projections are each lowered 1.0 million cwt to 60 million and 31.0 million, respectively.  Total rice ending stocks are projected at 36.4 million cwt, down 1.9 million from last month.
The 2011/12 long-grain season-average farm price range is projected at $13.50 to $14.50 per cwt, unchanged from last month.  The combined medium- and short-grain farm price range is projected at $15.50 to $16.50 per cwt, up 50 cents per cwt on each end of the range from last month.  The all rice season-average farm price is forecast at $14.00 to $15.00 per cwt, unchanged from a month ago.
Projected global 2011/12 rice supply, consumption, trade, and ending stocks are increased from a month ago.  World rice production is forecast at a record 461.4 million tons, up 3.0 million from last month due primarily to an increase in India.  Thailand’s 2011/12 rice crop is raised 0.5 million in anticipation of a bumper main-season crop in the Northeast and large off-season crop in the North and the Central Plateau that will likely offset the production losses from the recent flooding.  India’s 2011/12 rice crop is forecast at a record 100.0 million tons, up 3 percent from last month and up 5 percent from the previous year.  India benefitted from a near-record monsoon in 2011.  Partially offsetting the production increases are reductions for Pakistan, the Philippines, and the United States.  Global consumption is raised 1.8 million mostly due to an increase in India.  Global exports are raised with increases for India and Vietnam, partially offset by decreases in the United States and Pakistan.  Imports are raised for Bangladesh and Nigeria.  Global 2011/12 ending stocks are projected at 101.4 million tons, up 2.8 million from last month, 3.6 million above 2010/11 and the largest stocks since 2002/03.  Forecast ending stocks are raised for Bangladesh, India, and the Philippines, but lowered for Vietnam and the United States.

Fukushima rice safe for distribution after tests -Kyodo

Rice harvested from Japan's nuclear accident-hit Fukushima prefecture is safe for distribution after tests showed that radioactive materials from the crops were below the limit set by the government, Kyodo agency reported on Wednesday.
Radioactive readings from rice harvested in all districts of Fukushima where the crops were grown were below the 500 becquerels per kilogramme limit set by the government, Kyodo said.
Fukushima expanded the inspection spots nearly ten-fold to around 300 areas in September after radioactive cesium of 500 becquerels per kilogramme was found in a sample of a pre-harvested rice in Nihonmatsu city, 56 kilometres (35 miles) west of the Fukushima Daiichi nuclear plant crippled by a devastating earthquake and tsunami in March.