Friday, 1 July 2011
NFA to defer rice imports to shield local farmers from price decline
QUEZON CITY, July 1(PIA) -– The National Food Authority (NFA) is deferring the arrival of rice imports to protect local farmers from the scare of a looming price depreciation due to the abundance of rice supply for the next three months.
In the Communication and News Exchange (CNEX) Forum held at the Philippine Information Agency (PIA) Conference Room on Friday, NFA Administrator Angelito T. Banayo stressed the sufficiency of the country’s rice supplies and its price stability as the reasons why NFA deferred said importation.
NFA is set to import 800,000 Metric Tons (MT) of rice for the year where three-fourths or 600,000 MT will be shouldered by the private sector leaving 200,000 MT for its own importation.
“Ang kulang na lamang dun sa 200,000 MT ay 63,000 MT. 137,000 MT na ang nakakarating. Pero hindi namin ito binebenta, derecho muna ito sa bodega kasi marami pa naman tayong bigas at pangalawa hanggang ngayon, very stable ang presyo ng bigas. Hindi tumataas ang presyo ng bigas,” (Out of the 200,000 MT, 137,000 MT were already delivered. However, these will not be sold; instead it will be delivered to warehouses for storage since we still have sufficient supply and the price of rice remain stable up to now, ) Administrator Banayo said.
“Dun naman sa pribadong sektor, 299,000 MT na ang nakarating as of yesterday. At dahil nga sa natatakot or nangangamba tayo na pagdating ng September na bumaba ang presyo, pinadedefer natin. Wag na muna nilang irush na iparating. Para naman ang farmers ay bumalanse naman tayo sa market situation,” (As for the private sector, 299,000 MT were already delivered as of yesterday. Due to possible price depreciation in September, we informed them to defer the delivery. They don’t need to rush it so as our local farmers would stay in competition with the market situation) Banayo added.
Banayo also assured an ample rice supply for the rest of the year. “Towards the later part of September, mag-aani na tayo so OK na tayo sa 2011,” (The later part of September will be harvest season, thus, we will be okay for 2011).
Meanwhile, Administrator Banayo said it is difficult to conduct any estimation on the volume of the country’s rice import on the next year as rice supply is always predicated on weather.
According to Banayo, it will be more appropriate to wait for the estimation that will be done by the Bureau of Agricultural Statistics on October.
“Every typhoon like that of Ondoy would cost us an estimated loss of 200,000 MT, so we would rather wait for the official figures from the Department of Agriculture,” Banayo added. (JPL –PIA GHQ)
Thursday, 30 June 2011
Vietnam exported 3.5 million tonnes of rice in H1
Vietnam exported 3.5 million tonnes of rice in the first six months of this year, earning US$1.7 billion, according to the Vietnam Food Association (VFA).
The VFA reported that farmers in the Mekong delta, Vietnam's largest rice bowl, have harvested over 210,000 ha of rice out of the total cultivated area of 1.6 million ha in the 2010-2011 summer-autumn crop with an average yield of 5 tonnes per hectare, up 0.2 tonnes over the yield in the same period last year.
The provinces of An Giang and Can Tho saw even higher average yields of 6-6.5 tonnes per hectare.
Normal rice was purchased at prices from VND5,800 to VND6,000 per kilogramme, meanwhile the price of high quality rice type was between VND6,300 and VND6,800 per kilogramme. As a result, farmers earned profits of 30-35 per cent compared to production cost.
Rice Supply Tightening in China May Boost Imports, Inflation
June 30 (Bloomberg) -- Rice supply in China, the world’s biggest grower and consumer, may decline after drought and floods damaged crops, potentially boosting inflation and increasing imports.
The early indica harvest may drop in some areas, said eight of 12 officials, traders and farmers surveyed by Bloomberg News in Hunan and Jiangxi provinces, the top producers of the variety which represents 17 percent of annual output. The crop may increase or be about the same as last year, said four of those surveyed from June 21 to June 25. Output of this type already dropped last year to the lowest level since 2003, according to the statistics bureau.
Lower production may bolster rice futures in China that jumped 29 percent in the past year and increase imports that doubled in the first five months. Surging food costs because of drought and floods helped lift inflation to 5.5 percent last month, the fastest pace in almost three years. The rate may quicken to more than 6 percent in June, adding pressure on the central bank to increase interest rates, some economists said.
“Competition for the early rice harvest will be quite intense given expectations for low output, likely driving up prices,” said Zhang Ting, an analyst at Cngrain.com, a researcher owned by China Grain Reserves Corp., which manages the grain reserves. “Output may at best match last year” even as the planted area probably gained, she said in an interview.
Faster Inflation
Rough-rice futures in Chicago climbed 48 percent in the past year, trailing a 75 percent jump in corn. The export price from Thailand, the biggest shipper, gained 8.6 percent. The lagging performance of rice may be “separating us from a food crisis.” Abdolreza Abbassian, a senior economist at the FAO, said in March.
Inflation in China, the second-biggest economy, has been driven by gains in meat, grain and vegetables. The cost of food, almost a third of the consumer price index, jumped 11.7 percent in May from a year earlier, boosted by surging pork prices. The price of packaged rice climbed 19 percent in the year through June 24, according to the Ministry of Commerce.
Rising prices in China may boost imports from Southeast Asia including Vietnam, Cngrain.com’s Zhang said. Purchases in the first five months doubled to almost 300,000 tons, with imports shipped from Vietnam surging, according to customs data. Shipments were 366,192 tons for all last year, data show.
Early indica rice on the Zhengzhou Commodity Exchange climbed to 2,661 yuan a ton on May 30, the highest level in more than three months, and closed at 2,596 yuan today. The procurement price for unhusked early rice on June 23 was 19 percent higher than a year ago, according to a Cngrain.com index.
Lakes Drained
The total rice harvest in China may gain 1 percent to 197.6 million metric tons in 2011 from last year, according to the grain information center. State grain reserves amount to 40 percent of annual consumption, Zhang Ping, chairman of the National Development and Reform Commission, said in March.
Central China experienced the driest three months on record in the lead up to May, draining the biggest lakes and reservoirs and cutting irrigation. Between March and May, seven provinces including Hunan and Jiangxi recorded 60 days without precipitation, delaying the transplanting of early season seedlings, the China Meteorological Administration said June 2.
The drought was followed by devastating floods, which damaged at least 338,000 hectares (835,216 acres) in Jiangxi and Hunan this month, according to the Ministry of Civil Affairs.
Harvest Delays
In Xiangyin county of northern Hunan, one of the areas worst affected by drought, output may plunge as much as 40 percent from last year, according to Chen Youguang, general manager of Zhiyou Rice Industry Co., which processes the grain. Low temperatures also damaged the seedlings, while excessive rain since June flooded some crops, he said.
“Many of these plants haven’t formed heads,” which should have been completed by now, Chen said, standing next to green paddies. The harvest may be delayed by half a month, he said.
The government will set a price floor of 102 yuan ($15.75) per 50 kilograms for early-indica rice this year, 9.7 percent higher than last year, the State Administration of Grain said in March. Farmers will likely demand between 110 yuan to 115 yuan, according to the traders surveyed.
In Zhuantou village, eastern Hunan, 60-year-old farmer Yang Dawen said the drought was the worst he has seen. In addition to the drought, floods this month wiped out some crops, he said in an interview June 22. “Maybe I’ll get half as much as last year” from the half acre planted with early rice, he said.
Sunday, 22 May 2011
Rice output may not be enough: IRRI
The global rice harvest will likely be just enough to meet demand, leaving little cushion for any losses from drought in China or potential monsoon problems in India, the International Rice Research Institute said.
Rice output may be 450 million to 460 million tonne in the 2011-2012 season, with demand forecast at 450 million tonne, said Robert Zeigler, director-general at the Los Banos, Philippines-based institute. The output forecast doesn’t account for the impact of drought in China, he said.“We’re not seeing a surplus, and that’s a little bit of a problem,” Zeigler said in an interview.“The near-term unknown is the impact of the drought in China on production. The other big unknown is the Indian monsoon.”
Potential output losses in China, the world’s largest grower and consumer, and abnormal monsoon rains in India, the second-largest, could tilt the market into a deficit, driving Chicago-traded futures higher.
Zeigler’s forecast compares with the May 11 outlook of the US Department of Agriculture, which estimated the global harvest at 457.858 million tonne in the 2011-2012 season, trailing demand estimated at 458.73 million tonne.The July-delivery rough-rice contract gained 1.1% to $15.05 per 100 pounds on the Chicago board of trade at 1:31 pm Singapore time, taking this week’s advance to 7.6%. Futures gained 26% in the past year, trailing corn’s 109% jump and wheat’s 72% advance.
The rice-growing region in central China will likely remain dry over the seven-day period started yesterday, Telvent said in a May 18 forecast. Growing areas need more rain in the coming weeks, it said.
Areas of central China surrounding Wuhan city are experiencing the worst drought in 50 years, affecting half of all crops and causing estimated economic losses of more than 300 million yuan ($46 million), the China News Service reported yesterday, citing the municipality’s water department.Rainfall in Wuhan was as much as 70% lower this year, compared with a year earlier, the report said. The drought has affected 1.5 million crops including rice, wheat, corn, rapeseed and cotton, according to the report.
Source: http://www.financialexpress.com/news/rice-output-may-not-be-enough-irri/793309/0
Silver prices settle, but sales continue to soar
Last month, silver prices skyrocketed to an all-time high of $48 an ounce, causing many Americans to rifle through their jewelry boxes, attics and drawers for old necklaces and other silver trinkets.
Silver is now trading at about $35 an ounce, but with gas and food prices soaring, people still are looking to raise some money by unloading their shiny objects.
Ordinarily playing second fiddle to gold, silver came into the spotlight when the price per ounce hit $25 in late 2010 and continued to soar.
"It's doubled since last year," Michael Toback, owner of a precious metals supply house in New York City, says of the number of people bringing him silver they want to sell. Jewelry such as silver chains or charms might yield a few bucks, he says, but the real value is in heavier pieces like sterling silverware, as well as tableware like platters, candlesticks and napkin rings.
Toback says some of the people selling silver now are those who bought silver coins and bullion the last time the price came close to $50 an ounce back in 1980, only to watch it drop below $5 shortly thereafter. Many others, though, aren't hobbyist investors, but ordinary people hoping to take advantage of silver's historically high value.
Many visit pawn shops or antique stores, while others sell their silver items at Tupperware-party-style events, at which guests come in with silver and leave with cash.
Entrepreneur Lisa Rosenthal, owner of a 3-year-old company in suburban Boston that runs gold-buying parties, expanded her business early this year to capture the burgeoning interest in silver. While her associates previously bought silver from event participants as a courtesy, Rosenthal now markets silver-specific buying parties. Since March, Party of Gold's associates have been booking a couple hundred silver-buying parties each month around the country. "The quantity of silver we receive now is pretty tremendous," she says.
Dave Crume, vice president of A-OK Pawn and Retail in Witchita, Kan., and president of the National Pawnbrokers Association, says he's buying a lot more silver these days, a phenomenon which his fellow pawnbrokers report experiencing, as well. "I'm probably seeing a 300 percent increase, at least," he says.
Crume says people know their silver is worth more than it used to be, but often they don't have a good sense of how much it's gone up. "The majority of people are pleasantly surprised" when they find out how much they can earn from a tarnished pitcher or cache of mismatched flatware.
This was exactly what happened to Susan Baker, an accounting manager from Boylston, Mass.. Baker took some of her in-laws' old silver to sell last month when her husband's siblings were cleaning out the family home in preparation for putting it on the market. Baker says she had a small assortment of items — a couple of candlesticks, napkin rings, commemorative mugs and around 40 pieces of silverware — and was bowled over when the buyer offered her nearly $1,250 for the collection.
"We knew that silver had some value, but it was a pleasant surprise that it was that much," she says. "But right there on the spot, she wrote us a check."
While Baker says her family plans to put their windfall towards a group vacation, other people selling silver are pressed by economic necessity, buyers say. "In some cases, they tell me they're behind on their mortgage payment," says Larry Nyborn, co-owner of Precious Metals Reclaiming Service in Westwood, Mass. "I've heard that more than once, that's for sure."
"For the average person, their silver and gold is one of the few things that has gone up," says Phil Dreis, owner of the Antique Cupboard in Waukesha, Wis. "They're facing the problem of more expensive food and gasoline, their wages haven't gone up and a lot of sources of people's wealth have disappeared. This is one of the few that's been a success story."
Source: http://www.msnbc.msn.com/id/43082610/ns/business-personal_finance/
Cambodia's royal oxen fail to predict rice harvest
PHNOM PENH (AFP) – Cambodia's royal oxen shunned rice grain on Saturday during an ancient ceremony to predict the country's agricultural fortunes -- prompting fears of a poor rice harvest among superstitious farmers.
King Norodom Sihamoni presided over the ritual in a park outside the palace where thousands of people watched royal astrologers observing the animals' behaviour.
After a symbolic ploughing of a portion of the field, a pair of oxen were led to seven dishes -- rice, corn, beans, sesame, grass, water and alcohol -- laid out on trays.
They were seen eating only corn and beans, allowing the palace's chief astrologer Kang Ken to declare that this year's corn and beans harvests will be bountiful.
The astrologer did not spell out to the crowd what it meant for the rice yield, sparking concern among farmers.
"I am very worried that we will not have a good rice harvest," farmer Ros Makara, 52, told AFP after the ceremony, which marks the start of Cambodia's rainy season, traditionally the time to plant rice.
"But I will try my best to grow rice. I do not totally rely on the prediction," he added.
While still taken seriously by many rural Cambodians in this deeply superstitious country, ploughing ceremony predictions have been called into question in recent years.
Vietnam rice exports rise 20% year to date
HANOI - Vietnam's rice exports so far this year have reached 2.87 million tons, a rise of 20.6% from a year ago, the Vietnam Food Association said.
That reflects deals Vietnam signed earlier this year with the Philippines, Indonesia and several African countries. However, rice prices in Vietnam and elsewhere in Asia may ease in coming weeks as demand has now slowed and supply is rising.
Revenue from Vietnam's exports of the grain as of May 19 hit $1.36 billion, up 23.6% from the corresponding period last year, the association said in its weekly report on Friday.
Its figures suggested rice export prices had averaged $474 a ton so far this year, up 2.6% from $462 in the same period last year.
Indonesia, Bangladesh, Cuba and the Philippines topped the list of rice buyers during the first four months of this year, the Vietnam Customs department said in a statement on Thursday.
The food association's report said Mekong Delta farmers had completed harvesting the winter-spring rice crop, with output of 10.36 million tons of paddy.
That is in line with industry forecasts of 10.4 million tons, up slightly from 10.27 million tons reaped last year.
Farmers in the Delta, Vietnam's food basket, have so far planted 1.07 million hectares (2.64 million acres) of the summer-autumn crop, 66.4% of their target for the crop, the report said, citing data from provincial agricultural departments.
The harvest is due to start in June in some areas and peaks from July, when paddy prices are expected to fall unless Vietnam secures major export orders, traders said this week.
Vietnam has revised up by a quarter its rice export forecast for this year to a record high of 7.1 million to 7.4 million tons because of the rise in shipments in the first quarter, the Agriculture Ministry said in early April.
But the U.S. Department of Agriculture attache in Vietnam forecast on May 11 that Vietnam's rice exports in the 2010/2011 marketing year would drop to 6.2 million tons from the record 6.73 million in 2009/2010.
The food association has also forecast rice exports this year would ease, to 6.5 million tons from 6.83 million tons, based on government statistics.
Source: http://www.abs-cbnnews.com/business/05/20/11/vietnam-rice-exports-rise-20-year-date
India: Ban on rice exports lifted
HYDERABAD: A bumper rabi crop coupled with lack of godown space with both government agencies and millers has forced the state government to lift ban on export of raw rice for a period of two months.
Though the government claims that this measure has been taken with a view to ease the pressure on godowns to accommodate fresh rabi crop arrivals, rice millers in the state have termed the government's decision as a positive development. However, officials clarified that there would be a review every 15 days to assess the impact of permitting the export of raw rice.
The decision was taken by chief minister N Kiran Kumar Reddy at a high-level review meeting with civil supplies minister D Sridhar Babu, marketing minister Mukesh Goud, chief secretary S V Prasad, agricultural marketing principal secretary Ratna Kishore, agriculture principal secretary B Nagi Reddy, FCI zonal manager B Kalyan Chakravarthy, civil supplies corporation VC&MD Dinakar Babu, a representative of the railways and other officials at secretariat on Wednesday.
The meeting also decided to allow sale of boiled rice outside the state without any conditions. Earlier, millers were forced to sell two-thirds of the boiled rice in the state and only one-third outside the state. Sources said rice millers, mostly from Telangana were holding around 32 lakh MTs of parboiled rice stocks.
The development assumes significance as rice millers had previously exported lakhs of tonnes of superfine rice by misusing and exploiting the permission given for export of raw rice only for a month. Sources said an estimated 35 lakh tonnes of various varieties of superfine rice was available with rice millers now and there was tremendous scope for them to exploit the state government's decision.
The chief minister asked officials to prepare details about the procurement plan and godown space required to ensure minimum support price (MSP) for farmers. He assured to take up the matter of godown space with the Centre during his visit to New Delhi on Thursday.
Reddy asked officials of all departments concerned to co-ordinate effectively and ensure that farmers received MSP for their produce. "If any official certifies that farmers are given MSP without verifying it on the ground level, stringent action should be taken against him," he said.
The chief minister asked the railways to allot more rakes to the FCI for Andhra Pradesh for the months of May and June for movement of rice. He wanted the rakes to be provided for movement of at least 5 lakh MTs of rice per month.
Officials informed the chief minister that the total production of rice during 2010-11 (both rabi and kharif put together) was expected to be 140.65 lakh MTs, which showed an increase of 32.27 lakh MTs over 2009-10. Officials said FCI, state agencies, civil supples corporation and IKP groups opened a total of 1,187 purchase centres and procured 1,10,620 MTs this season.
Officials said in order to prevent distress sale by farmers, the paddy offered by farmers at MSP to IKP groups would be allowed to be kept on farmers' account at agriculture market committees on rent-free basis up to 90 days or till the payment is made to them in full.
Source: http://timesofindia.indiatimes.com/city/hyderabad/Ban-on-rice-exports-lifted/articleshow/8489529.cms
Philippines to reap record rice harvest
MANILA, Philippines (Xinhua) - The Department of Agriculture (DA) expects to produce record riceharvest in the first semester of 2011 as a result of the good weather, the country's agriculture department said in a statement on Saturday.
The DA said Cagayan Valley is seen producing 1.22 million tons of palay in the six-month period or 31.4 percent more than last year's output.
Corn harvest meanwhile is expected to top 852,24 tons, 114 percent more than last year's yield of 397,42 tons.
"Cagayan Valley's record rice and corn harvests buttresses government's goal to attain self-sufficiency in rice by the end of 2013," the DA said.
Cagayan Valley ranks third behind Central Luzon and Western Visayas in terms of Philippines' riceproduction.
Despite being an agricultural nation, the Philippines is one of the world's biggest rice importers.
Source: http://www.philstar.com/Article.aspx?articleId=688394&publicationSubCategoryId=200
China expects higher rice planting acre amid on-going drought
BEIJING, May 21 (Xinhua) -- China may see increased planting acre of early rice this year, though drought has not been relieved in some areas, said a statement on the website of the Ministry of Agriculture on Saturday.
China is expected to plant 88.5 million Mu (5.87 million hectares) of early rice this year, about 1.6 million Mu more than the previous year, thanks to soaring rice prices and policy incentives, the statement said.
However, drought continues in Hubei Province, Poyang Lake areas in Jiangxi Province, Dongting Lake areas in Hunan Province and Leizhou Peninsular in Guangdong Province, the statement said.
The drought has affected about 3 million Mu of paddies in Hubei in the middle reaches of the Yangtze River, the statement said.
The statement urged local agricultural departments to help facilitate paddy management, as strong rains were forecast for southern China from Friday to next Tuesday.
The middle and lower reaches of the Yangtze River received about 40 to 60 percent less rain this year than in previous years -- this year being the least amount of rain in the past 50 years, said the State Flood Control and Drought Relief Headquarters.
Source: http://news.xinhuanet.com/english2010/china/2011-05/21/c_13887296.htm
Tuesday, 17 May 2011
Rice production to increae 32% on higher yields, expanded area
MANILA, Philippines — The Philippines' unmilled rice output in the third quarter is forecast to rise 32 percent from a year ago to 3.49 million tonnes as better rains result in higher yields from an expanded harvest area, the Bureau of Agricultural Statistics (BAS) said yesterday.
The projected growth in July to September, a lean period for rice production due to the onset of the rainy season, puts less pressure on the country to import more rice this year.
In its quarterly report, the BAS said unmilled rice harvests in January to June were projected to reach 7.61 million tonnes, up nearly 15 percent from a year earlier.
''Brighter prospects are seen for palay (unmilled rice) and corn production, harvest areas and yields for the first half and for the third quarter of 2011,'' the state agency said.
The forecasts were based on a BAS survey of standing crop in the second quarter and farmers' planting intentions in July to September.
Rice output in the second quarter may reach 3.57 million tonnes, 14.2 percent higher from a year ago as continuous above-normal rainfall was expected to help boost production, the BAS report said.
The agency said area harvested in the first half may increase by 10.2 percent from last year's record of 1.82 million hectares, while yield per hectare may improve to 3.8 tonnes from last year's 3.64 tonnes.
Early rains boosted output of the national staple in the first quarter, with production rising 15.6 percent to 4.04 million tonnes, the highest for any March quarter.
That helped lift overall farm output, with the production of the sector growing 4.1 percent in the first three months of the year, the fastest first-quarter growth since 2004. Corn output in the first half was projected to reach 3.3 million tonnes, up nearly 37 percent from a year ago. In the third quarter, production may grow 1.6 percent to 2.36 million tonnes from a year earlier.
Earlier this month, Agriculture Secretary Proceso Alcala said the government was maintaining its forecast of a record unmilled rice output of 17.46 million tonnes for the whole year, more than 10 percent higher than in 2010, given favorable weather conditions.
With crops benefiting from inincreased rainfall, the Agriculture department sees farm output this year growing between 4.5 and 5.5 percent, the highest in at least four years, after contracting 0.12 percent in 2010.
Alcala has been consistent in ruling out additional rice imports this year, saying the approved volume of 860,000 tonnes was enough with good harvests and a huge stockpile from last year's purchases.
The Southeast Asian country, the largest rice buyer in recent years, imported a record volume of 2.45 million tonnes in 2010 when rice output fell due to an extremely dry weather.
With the Philippines' limited import requirements, rice prices in the global market have remained largely under control amid a food- and oil-price driven inflation that has caused worries for central bank policy-makers around the region. (Reuters)
(SOurce: http://www.mb.com.ph/articles/318667/rice-production-increae-32-higher-yields-expanded-area)
Rice overimported in last 3 years of Gloria Macapagal-Arroyo
MANILA, Philippines—The Philippine government overestimated the yearly rice consumption by every Filipino, leading to overimportation in the last three years of the Gloria Macapagal-Arroyo administration.
An audit team tapped by the National Food Authority(NFA) to review its rice importation program, debt and losses said the agency’s private sector-financed importations from 2008 to 2010 amounted to “legalized smuggling” by favored groups.
The private importers consisted of 10 groups from Pangasinan province and eight traders from Cebu province.
When the interagency committee on rice and white corn, headed by then Agriculture Secretary Arthur Yap, met in 2009 to discuss the importation for 2010, no questions were raised on the estimate of the Bureau of Agricultural Statistics (BAS) that the per capita consumption between 2006 and 2009 jumped 8.5 percent to 128.8 kilograms.
The number was used as basis to compute the rice requirement for 2010, the year the Philippines imported 2.4 million metric tons (MT) of rice, making it the world’s largest importer of the grain.
Had the committee checked the BAS figures, the rice consumption figure for 2010 could have been adjusted to a more reasonable level of 120 kg a year, BAS’ updated per capita estimate that it released in July 2010, the audit team said.
“This per capita difference of 8.8 kg multiplied by the projected 2010 population of 93.034 million would result in an over-quantity of MT for 2010 importation of 818,000 MT,” said a report prepared by the three-member audit team.
Mismanaged inventories
The NFA’s mismanaged inventories also contributed to overimportation and surging rice prices, especially in 2008.
The report said there were months when the NFA stockpile went below the mandated buffer periods.
“From January 2000 to July 2010, there were 27 out of 127 months (or 21 percent) where the NFA stocks went below 15 days. Moreover, these near-stock-out occurrences were consecutive strings of 15 months (from February 2007 to April 2008) and 7 months (from Oct. 4 to April 5),” the report said.
The NFA’s rice inventory beginning July also went below its mandated target of 30 days in 2001, 2008, 2009 and 2010.
FAO warning
The longest near-stock-out in 2007-2008 was crucial as this was the time the UN Food and AgricultureOrganization (FAO) was issuing warnings on a possible food crisis and huge jumps in prices due to crop shortfalls, natural calamities and the globalfinancial crisis.
Despite these warnings, the NFA did not act to ensure that the country had a sufficient rice buffer, allowing traders, who were waiting for news of the low supply of NFA rice, to increase prices in early 2008.
Data from the Department of Agriculture showed that the price of rice in 2007 hovered between P20 and P25 a kilo. In 2008, the retail price jumped to between P34 and P40 a kilo.
The retail price of well-milled rice averaged P38.37 a kilo in June 2008, up by 13.89 percent from the previous month’s price and by 57.38 percent from the level in June 2007, according to the BAS.
Buying binge
Because of the global rice shortage in 2008 that affected supplies in the country, the NFA went on a buying binge the following year, NFA Administrator Angelito Banayo said recently. “The NFA overbought,” he said.
The trading agency imported more rice, culminating in the 2.4 million MT delivery for 2010, which the FAO said was one of the highest rice importation volumes on record.
This resulted in a supply glut that hurt not only NFA sales but also the prices of palay (unmilled rice) sold by farmers.
“The beginning-July stock [in 2009] was overdone, i.e. in excess of 17 days over the 90-day optimum national inventory. This overhang in the market dampened NFA sales volume and likewise dampened palay prices during the fourth quarter harvest,” the report said.
Corruption in the private sector importation, mistakes in consumption estimates, mismanagement of stocks and the unfortunate timing of rice purchases contributed to overpricing and the NFA’s debts over the years, the report said.
P33-B overprice
The audit noted that in the past 10 years, the NFA bought rice way beyond the benchmarks issued by the FAO.
“From years 2000-2010, the total (overprice) against the aforementioned benchmarks was $714 million or an (overprice) of $60/MT on a total purchase tonnage of 11.8 million MT valued at $4.8 billion,” the report said.
It said the last three years of the Gloria Macapagal-Arroyo administration saw the biggest overprice of imported NFA rice, which averaged $125/MT, or more than double the overprice of $60/MT for the whole of 2000-2010.
P182-B loss
The cumulative overprice during the period was P33 billion, nearly 20 percent of the NFA’s trading loss of P182 billion, the report said.
Mismanagement extended to NFA loans and investments, causing huge debts and losses.
To be able to import rice, the agency borrowed heavily from government financial institutions like the Development Bank of the Philippines, Land Bank of the Philippines and Philippine Veterans Bank from 2003 to 2005. As of 2010, the NFA government-guaranteed debt stood at P176.8 billion, the report said.
Losses in state bonds
But the loans were not used for rice purchases alone. The audit report said the NFA invested P16.5 billion in government bonds maturing in seven years.
The report said the NFA had to borrow periodically to pay the interests for the loans without getting an interest from its investments in zero-coupons.
Before the bonds matured, the NFA sold them to Land Bank of the Philippines. “It appears that NFA lost P1.3 billion to P3.3 billion from such investment on top of front-end fees to financial advisers,” the report said.
It also noted that the liquidation of the NFA bonds led to the restructuring of loans, which more than doubled from P16.5 billion to P35 billion.
Padded arranger fees
The report said the NFA also overpaid the “arranger fees” that totaled P230 million to the Land Bank and a private finance firm, ONL Consultants Inc.
ONL Consultants, also the financial adviser of the bankrupt Quedan and Rural Credit Guarantee Corp. (Quedancor), was the arranger for NFA transactions with Development Bank of the Philippines and Land Bank and was paid “2 percent for some loans.”
The report said the payment was way beyond the ceiling set by the government that even the Bangko Sentral ng Pilipinas (BSP) took notice.
The BSP, according to the report, told the NFA that arranger fees should “not exceed 1 percent but NFA actually paid 2 percent for some loans. By comparison, the consortium of banks that arranged NFA’s P18 billion long-term loans in 2009 charged only .0005 percent in arranger fee.”
It was not the first time that ONL Consultants, founded by Norberto Ong, was embroiled in a financial deal that turned out to be disadvantageous to the government.
ONL Consultants was the arranger of Quedancor’s P3-billion loan with Land Bank in 2004 for which it was paid P100 million, the report said.
Adding value to rice through greater innovation
The National Innovation Agency (NIA) has for years promoted the use of innovation and technology in developing rice into a variety of products to sell at a higher value.
Its objective is to encourage sales of the grain in grammes, not by the tonne or in bulk.
Even though Thailand tops in the global rice industry with more than 9 million tonnes exported last year, competition is growing more intense from countries such as Vietnam, the US and Pakistan.
Some exporters have tried adding value by boosting the nutritional content of the grain with vitamins, but a number of innovations have resulted in new products made from rice.
An NIA study found strong potential in global markets for innovative rice businesses in Thailand, notably those using substances found in rice as ingredients in the manufacture of cosmetics, food supplements and medicines.
The agency has also provided financial support to private firms and the research divisions of many organisations for projects such as quick-boiled rice, germinated brown rice and baby powder made from rice.
The NIA has contributed 10 million of the 257 million baht invested in supporting these projects since its establishment in 2003.
In 2007, the NIA joined with the Thai Rice Foundation to introduce a programme to promote greater innovation within the industry.
Together they inaugurated the Rice Innovation Award, scheduled to run for five years through 2011, with 1.5 million baht from the NIA to market innovative rice products commercially.
Asaya Siriaoutan, manager of the NIA's Innovation Culture Promotion Department, said the number of contestants in the project has increased each year, with more and more innovative projects.
"The trend of rice-based products that have a special function is on the rise including skin and health-care treatments, thanks to the valuable properties of rice,"she said.
Award-winning innovations have included rice bran oil as an ingredient in products such as shortening and cereal cream as well as using it as a substitute for butter and coconut milk.
Rice bran oil is lower in saturated fats and cholesterol and therefore suitable for health-conscious consumers.
Ms Asaya said apart from rice, the NIA has supported more than 600 creative projects in its eight years.
Food is a major industry in the country, and many Thai entrepreneurs have developed innovative products aimed at improving health, she said.
People nowadays understand better that prevention is better than cure, a concept that is conducive to innovation, said Ms Asaya.
(Source: http://www.bangkokpost.com/business/economics/237387/adding-value-to-rice-through-greater-innovation)
CBOT Updates: Rice ends higher
MUMBAI (Commodity Online): US rice futures finish higher with corn and wheat as the grains strengthen on weather worries.
Traders will digest planting data from the USDA in a weekly crop report due at 4 p.m. EDT. Rice planting is expected to remain behind normal after getting off to a slow start due to wet weather.
A week ago, 57% of the crop was sown, below the average of 76% for that time of year. CBOT July rice ends up 12c at $14.10 1/2 per hundredweight.
Courtesy: CME Group
(Source: http://www.commodityonline.com/futures-trading/market/CBOT-Updates:-Rice-ends-higher-22330.html)
Govt may look at raising rice prices in Aug/Sept '11: KRBL
The rice stocks have been quite active today. They have been doing very well in trade. Anil Mittal, CMD of KRBL and Gurnam Arora, Joint MD of Kohinoor Foods, in an interview with CNBC-TV18’s Anuj Singhal and Sonia Shenoy, gave their perspective on the rice stocks and how the are expected to do going forward.
Below is a verbatim transcript of the interview. Also watch the accompanying video.
Q: What is going right for the rice sector? What kind of pricing trend have you seen over the last two-three weeks? Has there been a bit of upmove?
Mittal: There has been an upmove in the rice prices because of the demand from Iran. Other than demand, the procurement which was being suppressed by Saudi and other countries in last three weeks has come up. There has been quite a good price rise of about USD 50-80 per tonne in the last three weeks.
Q: This time around, there has been an expectation that the monsoons will be normal, which has raised hopes of better pharma output and stable food prices as well. Did you have any talk with the government to free the rice and wheat exports because you had indicated that provided the monsoon is stable, you can persuade the government to free the export situation? Have you had any talk on that account or anything that you are hearing?
Mittal: On a regular term, we have been in constant touch with the government to open the export of non-basmati rice. The total buffer with the government is 59.1 million tonne which is three times than the normal norms.
The present position is that there is no space with the government to store the rice. People in Punjab and Haryana are desperate because government is unable to take the levy share which they normally used to finish in the month of April.
More than 40% of the levy share in Punjab is lying as it is and rice millers are into deep problem. Rice has been rotting in the godown and in open as well. I was quite confident after talking to various government officials that in the month of April end or May they will open it. We are now confused on what is the government making. The government has not opened the rice exports.
Q: Have you had discussions with food ministry on exports of non-basmati rice? What is the situation currently?
Arora: I don’t know what political compulsions the government has to not open non-basmati exports. There is no point of rotting all the grains in the ware houses.
Supreme Court is also very concerned about it and has taken up this matter number of times with the government. Because of the food inflation, they have a fear that market will slightly flare up.
We have been asking for just 5 million tonnes of non-basmati and that is the maximum India can export at this point of time. It is not only that we have allowed exports and export will happen. If we are competitive, only then we will be able to do it.
Q: What about the basmati exports? What kind of prices are you seeing currently? In the past, the prices were picking up on that account. How much of a pick up you are hoping to see? What would that do in terms of translation to your revenue front?
Arora: This year, the market has not been as good as last year. Recently in the last two-three weeks, the market has been coming up.
Earlier because of these problems in Syria, Libya and Bahrain, a lot of importers did not want to import the same quantities like last year. Now, most of the Middle East countries are comfortable. They have started asking for prices and started looking at imports now.
Q: On an average, how much has the prices gone up by?
Arora: We have seen a change of about USD 30-40-50 per tonne in the last couple of weeks, depending upon the kind of basmati. With better monsoon outlook and the FMCG industry doing well, all looks good.
