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Daily Global Rice E-Newsletter by Riceplus Magazine

Rice E-Newsletter
February 06 , 2015
V o l u m e 5, Issue I

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LA Rice Meetings: Get the Latest on Cuba, Iraq, China,
Mexico, and Much More
Rep. Charles Boustany speaks before a standing room only crowd in Louisiana last year
JENNINGS, LA -- Louisiana rice industry
stakeholders will receive the latest information on
opportunities and challenges in major markets at one
of three meetings scheduled next week. The Annual
Joint Membership meeting of the Louisiana Rice
Council and the Louisiana Rice Growers Association
will be held on Tuesday, February 10, at the Grand
Marais Center, 919 North Lake Arthur Avenue,
Jennings, LA 70546.
A trade show and reception will begin at 4 p.m., program presentations begin at 5:45p.m, followed by
dinner. In addition to reports on major Louisiana rice export markets, USA Rice Federation staff will
highlight activities in the international and domestic markets and government affairs issues impacting the
industry. Kevin Norton, the U.S. Department of Agriculture's Natural Resources Conservation Service
state conservationist, will be the keynote speaker and Dr. Mike Strain, commissioner of the Louisiana
Department of Agriculture and Forestry, will also be on hand to address issues of concern for the
Louisiana rice industry.
On Wednesday, February 11, the Central Louisiana Rice Growers Association will hold their annual
membership meeting at 11 a.m. at the Dean Lee Research and Extension Center in Alexandria. USA Rice
staff will repeat their reports and lunch will be served. For more information, contact Phillip
Lamartiniere, (318) 201-1132.Then on Thursday, February 12, USA Rice staff reports will be delivered at
the Northeast Louisiana Rice Growers Association Rice Forum, which begins at 8:30 a.m. at the Delhi
Civic Center in Delhi, LA. For more information,
contact Keith Collins, kcollins@agctr.lsu.edu.
Contact: Randy Jemison (337) 738-7009
USA Rice Joins 70 Agricultural Groups Urging Passage of TPA

A piece of the trade puzzle
WASHINGTON, DC -- In a letter to all members of Congress today, the USA Rice Federation
and dozens of other agriculture groups made the case for congressional approval of trade
promotion authority or TPA. TPA defines trade objectives and priorities for trade negotiations

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as well as puts consultation and notification
requirements on the administration. "TPA is
absolutely critical if the U.S. negotiators are
to reach trade agreements that improve
market access for U.S. rice," according to
Bob Cummings, USA Rice's COO. "Right
now, the administration is focused on
finishing up the Trans Pacific Partnership
negotiations. For us, that means securing a
deal with Japan for more imports of U.S. rice and less intervention in the import market by the
Japanese government. A TPA with a clear priority on agricultural market access will keep the
focus on a comprehensive and meaningful agreement with Japan."
Congress will assess individual trade agreements, like TPP, against the provisions of TPA and
vote up or down on implementing legislation. TPA provides assurance to foreign countries that
agreements reached with U.S. negotiators cannot be amended by Congress and, more
importantly, provides clear negotiating direction to the President against which the deals his
negotiators bring home will be measured.
Contact: Kristen Dayton (703) 236-1464

Weekly Rice Sales, Exports Reported
WASHINGTON, DC -- Net rice sales of 60,600 MT for 2014/2015 were up 86 percent from the
previous week and 3 percent from the prior four-week average, according to today's Export Sales
Highlights. Increases were reported for Colombia (31,500 MT), Honduras (8,800 MT, including
8,000 MT switched from unknown destinations), Saudi Arabia (6,000 MT), Jordan (5,000 MT),
and Mexico (3,800 MT). Decreases were reported for unknown destinations (3,000 MT), Costa
Rica (700 MT), and Guatemala (300 MT).
Exports of 60,600 MT were down 19 percent from the previous week and 24 percent from the
prior four-week average. The primary destinations were Costa Rica (17,800 MT), Haiti (16,700
MT), Honduras (8,800 MT), Mexico (4,700 MT), and Guatemala (4,700 MT).
This summary is based on reports from exporters from the period January 23-29.
CME Group/Closing Rough Rice Futures
CME Group (Prelim): Closing Rough Rice Futures for February 5

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Month

Price

Net Change

March 2015

$10.450

+ $0.200

May 2015

$10.700

+ $0.195

July 2015

$10.940

+ $0.180

September 2015

$10.785

+ $0.160

November 2015

$10.900

+ $0.105

January 2016

$10.990

+ $0.105

March 2016

$10.990

+ $0.105

How many acres of rice in 2015?
Establishing base acres, Cuba, and a look back at 2014
Feb 5, 2015David Bennett | Delta Farm Press

The Arkansas rice crop in 2014 was one for the record books,
although not always in a good way. “Growers I‟ve spoken with
that have grown rice for 30 or 40 years all say they never
experienced a year like 2014,” says Jarrod Hardke, Arkansas
Extension rice agronomist. “That was really bolstered when
you look at the month of July — the coldest average
temperature on record for that month. The whole season really trended towards being the coolest
ever.”Besides the cool weather, 2014 was tough on rice growers because of the timing of the wind
and rain events. It meant a lot of workarounds.Even so, “when it came to season‟s end, most people
were pretty happy with their crops. There were plenty of growers who said it was their best crop even
though they had to work a lot harder for it.
“A lot of our rice yield is set by pre-flood nitrogen. With the wind and rain, that was out of sync in
many fields. It was hard to get those applications out at the proper time on dry ground. Those delays
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probably hurt our yields a bit so it‟s surprising our end result turned out so well.”There was a benefit
of all those early, light rains, though: they kept herbicides activated. “So, even with the delays the
weeds were being suppressed. A lot of fields got almost unbelievable residual control from products
that typically don‟t last that long. Bob Scott (Arkansas Extension weed scientist) has commented on
the extremely clean crop — a few escapes not withstanding — that we headed into the heart of the
summer with.”Rice producers did have to fight a lot of disease pressure. “It was a terrible year for
blast — probably the worst since 2004.
However, most producers did a good job of fighting that battle. There were a few situations where
fields were left without management and that proved to be a mistake. I never saw any of them but
have gotten reports that some of those fields were later walkaways. Blast can really take a field
out.”Sheath blight also showed up in some fields. “It doesn‟t have the potential for loss like blast but
does need to be watched especially in cool, mild conditions. Milder daytime temperatures, heavy
dew-set every day and routine rain showers set you up for disease in rice.”There were also a lot of
small diseases that popped up here and there.
Rick Cartwright, former University of Arkansas plant pathologist, “refers to those as „nibblers.‟
Those are the diseases that aren‟t the big ones that will jump up and knock a crop out. You know, a
field might have a complex of little things that don‟t appear to be much at first — things you might
not think need to be treated — but they just take little bites out of the grain yield until they turn into
something very damaging.”
http://deltafarmpress.com/rice/how-many-acres-rice2015?page=1&utm_source=USA+Rice+Daily%2C+February+5%2C+2015&utm_campaign=Friday%2C+December+13%2C+2
013&utm_medium=email

IRRI to build new biotech facility to study climate change
impacts on agriculture
By: Anna Valmero, InterAksyon.com
February 5, 2015 3:43 PM
IRRI in Los Banos, Laguna. FILE PHOTO
The online news portal of TV5
LOS BAŇOS, Laguna - The International Rice Research
Institute (IRRI) has announced plans to build a new
research facility that will help scientists study the impacts
of climate change on agriculture, and consequently on the
food supply of future generations. The Lloyd T. Evans
Plant Growth Facility is a biotech hub that aims to tap
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more young researchers to study how rising concentrations of carbon dioxide and other
greenhouse gases in the atmosphere will impact on the production of crops and grains, especially
rice, said Matthew Morell, deputy director general for research at Laguna-based IRRI.
“We expect researchers to flock to the facility and collaborate with each other. We especially
aim to attract young researchers because it is absolutely critical that we have people who will
take the battle for sustainable food supply forward,” said Morell in an interview.The biotech
facility will be one of the advanced worldwide when it opens by end of 2015, he added.With the
new facility, IRRI also seeks to have more national and cross-country collaborations with other
research institutes.Agriculture is highly vulnerable to the impacts of severe changes in the
weather as it is dependent on highly specific climate conditions. In late 2013, the Philippine
agricultural sector suffered major losses after Haiyan (local name: Yolanda), the strongest
typhoon to make landfall to date, hit the Visayas.
Moreover, half of the world‟s population or about 3.5 billion people consider rice their staple
food. Filipinos eat 119 kilos of rice a year, according to an IRRI study.In the new facility,
prolonged dry spells and flooding induced by climate change will be simulated, and plants will
be attached with sensors to enable accurate, real-time monitoring of the impacts of various
weather elements like light intensity, night temperature, and humidity.The Australian
government through the Australian Centre for International Agricultural Research will fund the
facility‟s construction worth US$15 million.
More agriculture students
In a separate interview, Dr. Fernando Sanchez Jr., of the University of the Philippine Los Baños,
welcomed the construction of the new facility, which will provide young university researchers
with the best tools. The crop scientist noted that this would encourage more students to take up
agriculture as a career or to conduct related studies.In 2012, UPLB reported a sharp decline in
agriculture enrollment of only 4.7 percent of the total 9,500 enrollees in 2012, down from 43
percent in 1995 and 51 percent in 1980.A vibrant agricultural research environment is needed to
ensure sustainable food supply in the face of climate change, Morell noted.
For this, IRRI has a two-pronged approach that seeks to provide young researchers tools and
facilities to conduct their studies and to host regular conventions such as the Global Rice
Research Science Partnership (GRISP), where young scientists have the chance to present their
studies to senior research fellows.“It is absolutely critical that we have the people in the future to
take the battle forward,” stressed Morell.In her doctorate study, Filipina GRISP presenter Rica
Joy Flor mentioned the benefits of tapping overlooked informal networks and key players in
farming communities to ensure the sustainable adoption of technologies. She says that these
informal groups usually identified by their tasks in the field can help the communities get better
bargain when dealing with middlemen in acquiring plant materials or in selling their goods as a
group instead of simply as an individual.
She mentions a huge opportunity for Filipino students to apply their expertise in agricultural
research.Initially, Flor wanted to specialize in medical anthropology and later found her way into
community networks in farming communities.“We always view agriculture to be a separate field
of discipline but it is interrelated to other studies. I think young researchers will find good
problems to study and make an impact to help people via agricultural research,” she says.Pieter

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Rutsaert, a European post-doctoral fellow at IRRI, noted in his research that gender dynamics is
also a challenge, especially in bringing women‟s voice in community decision-making.

Rice research adopts drone technology in Riverina
NSW Country Hour
By Laurissa Smith
Updated Wed at 8:08pmWed 4 Feb 2015, 8:08pm
PHOTO: A drone captures hundreds of rice plots at Rice Research Australia near Jerilderie in
southern NSW.(Russell Ford)
MAP: Jerilderie 2716
The Australian rice industry can't get enough of remote-controlled technology.
It is trialling robotic tractors to sow crops,
while using drones to watch them grow.
Industry group Rice Research Australia,
based near Jerilderie in south-west New
South Wales, has been looking at the
benefits of drones for the last three
years.This season it is incorporating them
across its trial sites.The Unmanned Aerial
Vehicle (UAV), which cost around $2,700,
has a GPS system installed inside it, with a
camera attached on the outside.It flies
above the rice fields to record video
footage of crop establishment and density,
weeds and in some cases nitrogen uptake.
Rice Research Australia manager Russell Ford said with further research the UAV's could save
growers time and money."We do a panicle initiation test and it's very manual-orientated," he
said."We're looking for an opportunity to make that easy for farmers."If we're going to do that,
we need something that correlates very closely to nitrogen uptake and that's some of the research
that's happening at the moment."Mr Ford said he expected more farmers would incorporate
drones into their production system in the coming years.
"The technology, for some reason, interests people in Australia," he said.We tend to go out there
and try it, whether we know how to use it or not."That's an attribute Australian farmers and
researchers are very good at."Let's hope we continue to develop that because a lot of this
technology will be useful in making us more efficient in the future."

Rice producer signs MoU with machinery firm
Thu, 5 February 2015

Chan Muyhong
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Local rice miller and exporter, QC Rice Company, signed a memorandum of understanding
(MoU) yesterday with Chinese agricultural firm, Rizhao Rui Energy Trading Company, a
partnership that will see the two businesses trade in rice and agricultural machinery.The deal sees
Rizhao Rui Energy Trading Company agree to import 250,000 tonnes of Cambodian rice from
QC Rice, while the Cambodian rice producer has agreed to import $4 million worth of farm
machinery from its Chinese partner.
The agricultural equipment includes plough tractors, rice transplanting machines and harvesting
machinery, according to Taro Ichiro, executive director of QC Rice Co.The machineries, he said,
will be used to help farmers contracted to QC Rice across six provinces where the lack of labour
and farming equipment is hindering production.“We want to speed up paddy rice production and
increase farmers‟ revenues,” he said. “Using machinery is an efficient tool to help them, also we
want to guarantee on-time delivery and quality rice for buyers,” he added.While QC Rice
exported only 120 tonnes of rice last year, Ichiro, said the MoU will help boost its
exports.Rizhao Rui Energy Trading Company is part of Wuzheng Agriculture Machinery, and
along with producing a wide range of agricultural machines, the company also has more than 100
distribution channels for rice in China, said Jun Kong, CEO of Rui Energy International.
“The MoU will help us to introduce Wuzheng machineries to Cambodia‟s market and with the
existing channels for rice and cassava in China, it is good for the two companies to work
together,” he said.The first rice export will occur by the middle of the year, he added.China‟s
import quota of 100,000 tonnes of rice from Cambodia is something Kong said the company
would be seeking to lift in order to allow the 250,000 tonnes anticipated in the deal.David Van,
senior adviser to the Cambodia Rice Federation, said that the federation is always “hopeful and
supportive to any of our rice exporters to be able to increase exports to the huge market right
next door, which is China”.
Van said the Chinese quota of 100,000 tonnes was due to end in the first quarter of this year, and
it was up to the Ministry of Commerce to negotiate an increase with the Chinese government.
Rizhao Rui Energy Trading Company, being private company, would also need to engage the
Chinese authorities, Van added.The Ministry of Commerce could not be reached for comment
yesterday, however, in August, the commerce minister said he had requested an increase in
Cambodia‟s rice quota to 500,000 tonnes.

How many acres of rice in 2015?
Establishing base acres, Cuba, and a look back at 2014
Feb 5, 2015David Bennett | Delta Farm Press

The Arkansas rice crop in 2014 was one for the record books, although not always in a good way.
“Growers I‟ve spoken with that have grown rice for 30 or 40 years all say they never experienced a
year like 2014,” says Jarrod Hardke, Arkansas Extension rice agronomist. “That was really bolstered
when you look at the month of July — the coldest average temperature on record for that month. The
whole season really trended towards being the coolest ever.
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”Besides the cool weather, 2014 was tough on rice growers because
of the timing of the wind and rain events. It meant a lot of
workarounds.Even so, “when it came to season‟s end, most people
were pretty happy with their crops. There were plenty of growers
who said it was their best crop even though they had to work a lot
harder for it.“A lot of our rice yield is set by pre-flood nitrogen.
With the wind and rain, that was out of sync in many fields. It was hard to get those applications out
at the proper time on dry ground. Those delays probably hurt our yields a bit so it‟s surprising our
end result turned out so well.”There was a benefit of all those early, light rains, though: they kept
herbicides activated. “So, even with the delays the weeds were being suppressed. A lot of fields got
almost unbelievable residual control from products that typically don‟t last that long. Bob Scott
(Arkansas Extension weed scientist) has commented on the extremely clean crop — a few escapes
not withstanding — that we headed into the heart of the summer with.”Rice producers did have to
fight a lot of disease pressure.
“It was a terrible year for blast — probably the worst since 2004. However, most producers did a
good job of fighting that battle. There were a few situations where fields were left without
management and that proved to be a mistake. I never saw any of them but have gotten reports that
some of those fields were later walkaways. Blast can really take a field out.”Sheath blight also
showed up in some fields. “It doesn‟t have the potential for loss like blast but does need to be
watched especially in cool, mild conditions. Milder daytime temperatures, heavy dew-set every day
and routine rain showers set you up for disease in rice.”There were also a lot of small diseases that
popped up here and there.
Rick Cartwright, former University of Arkansas plant pathologist, “refers to those as „nibblers.‟
Those are the diseases that aren‟t the big ones that will jump up and knock a crop out. You know, a
field might have a complex of little things that don‟t appear to be much at first — things you might
not think need to be treated — but they just take little bites out of the grain yield until they turn into
something very damaging.”

Japanese rice: the new, safe luxury food in China
BY ALEXANDRA HARNEY AND YUKA OBAYASHI
SHANGHAI/TOKYO Sun Jan 25, 2015 4:16pm EST

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(Reuters) - First it was European infant formula, then New
Zealand milk. Now Chinese consumers are adding Japanese
rice to the list of everyday foods they will bring in from
abroad at luxury-good prices because they fear the local
alternatives aren't safe.The volume of rice imported
from China remains small - 160 tonnes last year, according
to Japan's National Federation of Agricultural Cooperative
Associations.
But that is more than triple the total in 2013, a trend
that illustrates Chinese consumers' dwindling
confidence in the safety of the country's own
agricultural produce."Chinese rice farmers use
pesticides," said a seller identified as Ying Ying,
who started offering Japanese rice on the Taobao
online marketplace last August. "Japanese rice isn't
polluted by heavy metals."Pollution from
industrialization has exacted a heavy toll onChina's
soil and water.
In May 2013, officials in Guangdong province in southern China said 44 percent of rice samples
contained excessive levels of the metal cadmium.A study by the Ministry of Environmental
Protection last April estimated that 16.1 percent of China's soil was contaminated. In parts of the
country, soil pollution is so bad that some rice farmers refuse to eat what they grow.After the
cadmium revelations, some Chinese consumers began to see rice from Thailand as an affordable
and safe substitute.
In contrast, Japanese rice is neither cheap nor easy to find in China. Japanese rice imported by
Chinese grain trader COFCO sells for 74 Chinese yuan ($12) a kg on PinStore, an online
supermarket run by Japanese trading house Sumitomo Corp. Domestic rice sells there for as little
as 7.5 yuan per kg.
As demand grows, Chinese consumers are increasingly turning to online platforms such as
Taobao, run by Alibaba, to buy rice directly from individuals in Japan.One person seems to have
paid as much as 1,499 yuan ($241) for five kg, according to Taobao.Steep prices, though, are no
deterrent for some."Much tastier than Chinese rice. Worth every cent - great texture and taste,"

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one delighted buyer wrote on Taobao.To meet demand, some Chinese producers now say they
use Japanese seeds and promote their rice as a safer alternative to purely domestic
strains.Zhejiang Xinxie Yueguang Agricultural Science and Technology says its Echizen brand
rice is safe and grown with "water from pure sources and strict quality control". The packaging
says the rice is a Japanese variety.
But Echizen rice is grown in Changxing county, a hub of lead-acid battery production in eastern
Zhejiang province. Battery production can be highly polluting.Li Jun, general manager at
Zhejiang Xinxie Yueguang, insisted the company's rice had passed tests for lead, cadmium,
mercury, pesticides and other chemicals by state inspectors.The company had also found other
areas to grow rice where there was less concern about pollution, Li said.The Chinese eat around
120 million tonnes of rice a year and the country imported more than 2.2 million in the first 11
months of 2014, including 1.2 million tonnes from Vietnam and 626,000 tonnes from Thailand,
customs data shows.
Japan is a small rice exporter - just 3,777 tonnes in January to November 2014, according to
agriculture ministry data - but it is looking to boost shipments to Asian countries as part of a
wider push to export more agricultural products.However, if the trend to China looks
encouraging, any further increase through normal export channels may be slow: the Chinese
authorities have given just one Japanese rice mill clearance to send polished rice.Others have
begun an application process but that has stalled. Some would-be suppliers have been waiting for
three years, a Japanese government official said.(Additional reporting by Shanghai Newsroom;
Editing by Alan Raybould)
http://www.reuters.com/article/2015/01/25/us-china-japan-rice-idUSKBN0KY0YX20150125

Vinafood 2 ridiculed for its plan to buy paddy from farmers
VietNamNet Bridge – Experts have
expressed doubts about Southern Food
Corporation’s (Vinafood 2) plan to
“restructure rice production and
export”.Vinafood
2,
the
major
Vietnamese rice exporter, has announced
it will “make a breakthrough” in rice
exports by buying unhusked rice from
farmers to process rice for export instead
of buying rice for export, as it did in the
past.Huynh The Nang, general director of
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Vinafood 2, said this is a part of the corporation‟s plan to develop its large-scale paddy field
model, which would help it secure enough rice stocks for export.
Meanwhile, this would allow farmers to sell rice at good prices.It is expected that the large-scale
fields would account for 20 percent of the rice growing area in the Mekong River Delta by
2020.Vinafood 2 has completed working sessions with its subsidiaries and commercial banks on
the cooperation in implementing the restricting process.The rice exporter has signed cooperation
contracts with four banks, namely MHB, LienViet Post Bank, VietBank and HD Bank, under
which the banks would provide loans to rice merchants, cooperatives, rice suppliers and
Vinafood 2‟s subsidiaries.Nguyen Van Nam, a renowned trade expert, noted that for many years,
Vinafood 2 has been acting as the “rice exporters‟ foreman”, not buying rice directly from
farmers, but from merchants and via intermediaries.
Nam said he still could not imagine how Vinafood 2 can do this.“Farmers sell fresh paddy right
at the fields. If Vinafood 2 wants to buy paddy from farmers, it will have to develop a collection
network nationwide,” he noted.Commenting about Vinafood 2, the expert said this was the best
choice for Vinafood 2 for now.In the past, Vinafood 2 was the only authorized exporter. But
things are different now: many other companies also have the right to export rice if they can
satisfy the requirements set by the government.“As Vinafood 2 is losing its monopoly, it will
have to buy paddy from farmers to process finished rice products for export, or it will have
nothing to do,” he said.
Analysts warned that it would be very costly and complicated for Vinafood 2 to reorganize its
business chain, i.e., it would carry out all phases of the production, processing and export.An
analyst noted that it would be better for Vinafood 2 to sign rice-supply contracts with local
enterprises. If so, it would be able to create a rice production and business chain which would
allow it to save costs and work effectively.
Kim Chi
Tags:Vietnam,rice export,largest exporter,

http://english.vietnamnet.vn/fms/business/122658/vinafood-2-ridiculed-for-its-plan-to-buy-paddy-fromfarmers.html

Costly rice seen limiting Thai exports
Published: 4 Feb 2015 at 08.09
Newspaper section: Business
Writer: Phusadee Arunmas

Thai rice exporters are projecting shipments of just 10 million tonnes this year, mainly due to
high prices for Thai grains. The amount is much lower than the previous forecasts of the
Commerce Ministry and the US Department of Agriculture (USDA), Charoen Laothammatas,
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president of the Thai Rice Exporters Association, said yesterday.The association expects
shipments to fetch US$5.95 billion or 161 billion baht in 2015.The 10-million-tonne amount
includes 5 million tonnes of white rice, 2 million tonnes of Hom Mali fragrant rice, 2.7 million
tonnes of parboiled rice, 100,000 tonnes of glutinous rice and 200,000 tonnes of Pathumthani
fragrant rice.The USDA earlier forecast Thai rice exports of 11.3 million tonnes, and the
Commerce Ministry announced recently that it was upbeat on Thailand returning to global
dominance with as much as 11 million tonnes shipped this year.
Thailand exported 10.96 million tonnes of rice last year, up 66% from 2013. Export value rose
by 23% to $5.43 billion.Mr Charoen said 2015 would be challenging for rice exports, with Thai
rice now quoted at the highest price in the region.For instance, key rival Vietnam's free-on-board
price for 5% white rice is $350-360 a tonne, compared with Thai grains quoted at $405-410.Last
year, Thai rice prices were $20-30 cheaper than those of Vietnam."This year, Thailand is
expected to see stiffer competition, while the government's massive rice stocks and volatile
foreign exchange due to quantitative easing (QE) in Europe and Japan are likely to exert further
pressure on the price of Thai rice," Mr Charoen said.
"Falling oil prices are also expected to lead potential rice buyers in Africa such as Nigeria to buy
less."Moreover, drought conditions are seen lowering domestic production, particularly for the
second crop.Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association,
said lower exports would apply especially to white and parboiled rice, as potential buyers are
expected to shift to cheaper grains from other rice producers because of falling oil prices and the
strong baht.Vichai Sriprasert, another honorary president of the association, said foreign
exchange would play a key role in how Thai rice exports perform, with foreign QE measures of
particular importance. He urged the central bank to help manage the baht and move it in line with
the currencies of other regional competitors."The Thai baht is now relatively strong compared
with other currencies in the region, and even Singapore announced a surprise easing of its
currency policy to dampen inflationary expectations and support growth," Mr Vichai said.

Finance Ministry to take rice pledging debt from BAAC
Published: 5 Feb 2015 at 06.00
Newspaper section: Business
Writer: Wichit Chantanusornsiri

The Finance Ministry is about to issue laws to take over debt incurred from the Yingluck
Shinawatra government's rice-pledging schemes to make the balance sheet of the state-owned
Bank for Agriculture and Agricultural Cooperatives (BAAC) more flexible for business
expansion. Taking debt from the rice-pledging scheme off the BAAC's balance sheet will allow
the farm bank to run without worries over the massive debt, a Finance Ministry source said
yesterday.
The subcommittee overseeing accounting of all rice-subsidy schemes earlier estimated losses
from buying 84 million tonnes of milled rice in the 15 schemes from 2004-14 amounted to 682
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billion baht, with the Yingluck Shinawatra government alone accounting for 518 billion. The
combined loss will be higher if depreciation, missing milled rice from warehouses, interest costs
and warehouse rental fees are included.Rent to store the rice in warehouses amounts to 2 billion
baht a year, and the interest from borrowing 500 billion baht to fund the scheme is charged at 3%
annually, while the depreciation rate of the rice stands at 10% per year.An inspection of the 17
million tonnes of milled rice bought under the previous government's scheme found only 2.19
million tonnes were standard quality and classified as Grade A rice.
Some 14.4 million tonnes were judged to be substandard or Grade B, while the rest was
classified as Grade C because it was either rotten or had been registered incorrectly.
The inspection was done by a team working for PM's Office Minister ML Panadda Diskul. The
source said the debt takeover would be similar to the Financial Institutions Development Fund
debt takeover of 1.4 trillion baht from the 1997 financial meltdown.The government is legally
required to use proceeds from pledged rice sales to pay the principal and interest in addition to
the government budget set each fiscal year, the source said.The debt takeover will also help to
lower interest costs, as the Finance Ministry has a better credit rating than the BAAC, the source
said.
It will be impossible for the government to pay off the debt within a short time period, as
this would constrain public investment, meaning it is obliged to structure the debt as a long-term
loan to match revenue from the rice sales and the budget.The ministry may also take over
other state enterprise debt from previous government policies, the source said.

APL families to get subsidised rice, wheat
Unit system to be re-introduced to check diversion
Keeping an eye on the forthcoming polls to local bodies, the government proposes to supply
subsidised rice and wheat to 19.6 crore Above Poverty Line (APL) families under the public
distribution system. But there‟s a rider: APL families have to give in writing that they will lift
their monthly quota without fail.The Congress Legislature Party (CLP) meeting on Wednesday
unanimously endorsed the proposal on providing subsidised ration to APL families.
The CLP welcomed the proposal and appealed to Minister of State for Food and Civil Supplies
Dinesh Gundu Rao to implement it at the earliest. The proposal would be placed before the
Cabinet soon, and it would be executed in the next two months, sources in the Food and Civil
Supplies Department told The Hindu .To check diversion of foodgrains, it was decided to reintroduce the unit system for rations for BPL families, and food items would be distributed based
on the size of the family.
For instance, a single-member family will get 5 kg of rice, while an eight-member family will get
40 kg of rice per month.“In the unit system, the larger the size of the family, the larger will be
the quota,” sources said.At present, single-member, two-member and three- and more members
in a family are receiving 10 kg, 20 kg and 30 kg, respectively, under the Anna Bhagya scheme.A
sum of Rs. 4,000 crore had been earmarked for the department in 2014-15, and it is expected to
spend Rs. 2,800 crore.

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http://www.thehindu.com/news/cities/bangalore/apl-families-to-get-subsidised-ricewheat/article6858493.ece

Thai crops to suffer worst drought in 15 years
BANGKOK Thu Feb 5, 2015 5:53am EST

(Reuters) - Thailand will experience its worst drought in more than a decade this year, the irrigation
department said on Thursday, damaging crops in one of the world's biggest rice-exporting
nations.Thailand was currently battling drought in eight of 76 provinces, but 31 other provinces
remained at risk, the Interior Ministry said, adding that it had allocated around 6.8 billion baht
($208.65 million) to alleviate drought, up from 430 million baht ($13.19 million) last year.The funds
would be used to install water pumps and provide mobile water tanks in affected areas, it said.
"This year's water levels are the worst in 15 years but we have managed our water supply so people
can be confident that there will be no problems regarding water shortages," said Lertwiroj
Kowattana, director-general of the Royal Irrigation Department.Drought will cut major rice exporter
Thailand's 2015 off-season crop by over 30 percent, according to the latest report from the Office of
Agricultural Economics.Thailand's off-season rice is grown between November and April after the
main crop is harvested. The second crop needs irrigation as there is little rain during that period.
The government had announced that it would not provide water for second-crop rice farming. On
Thursday, it said it had persuaded farmers to halve second-crop production in 2015.Around 160,000
hectares, or around 1.3 percent of Thailand's total rice farm land, will be affected by drought, the
Agriculture Ministry estimates.Palm oil production has also been hit by ongoing drought prompting
the government to import around 50,000 tonnes of crude palm oil due to a domestic
shortage.Thailand's military government has said it plans to invest $7.5 billion in urgent water
management projects over the next two years.
The projects are part of a 10-year water management plan across the country after the military
government scrapped a 350-billion baht water plan initiated by the previous
administration.(Reporting By Kaweewit Kaewjinda, Pracha Hariraksapitak and Panarat
Thepgumpanat; Editing by Amy Sawitta Lefevre and Nick Macfie)

http://www.reuters.com/article/2015/02/05/us-thailand-drought-idUSKBN0L917F20150205

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