Rice

India kharif paddy acreage was up 4.5% on year at 1.67 million hectares due to good progress of monsoon rains across major growing regions. Southwest monsoon rains have been near normal so far and according to the India Meteorological Department, the currents are likely to cover most parts of the country in the next two to three days. Typically, monsoon covers the entire country by Jul 15.

The company inaugurate a rice plant of 60,000-tn initial capacity at Rotterdam in Netherlands. The company would process varieties such as Basmati, Thai, Jasmine and American rice at the new plant. Shares of the company traded at 68 rupees, up 5.8%, on the National Stock Exchange.

It nigh impossible to think of a south Indian meal without rice. And now, with the country getting ready for the rollout of the goods and services (GST) tax regime, South Indians, for whom rice is a staple food, have a reason to worry – all varieties of branded rice are set to get dearer by 5% per kilogram, come July 1. Karnataka is likely to be worst affected owing to the additional cess on grains levied by the state government on traders and millers. Besides the 5% GST tax on branded food grains, the state government levies a 1.5% market tax on food grains, which the Agriculture Marketing Produce Committee (APMC) has decided to continue even after the rollout of GST.

Rice exporters see a pick-up in demand for the Indian cereal from Bangladesh as the recent floods in that country have impacted output and sent prices high. Also, a drought in Sri Lanka has resulted in improved demand for the finer varieties such as sona masuri. Bangladesh recently floated three tenders to import about 1.5 lakh tonnes of white rice and par-boiled rice. A fourth tender is expected in July 1st week. Export prices have improved by about 15 per cent since the beginning of the year. As against FOB price of $360-370 per tonne in January, prices of white rice have now moved to between $420 and $430 a tonne.

Prices of rice were largely unchanged, with the 1121 sella basmati rice sold at 5,800 rupees per 100 kg in Delhi and the 1121 steam non-basmati variety priced at 6,500 rupees in Taraori, Haryana.

Sri Lanka has opened immediate talks with three countries (Indonesia, Pakistan, Thailand) to procure a rice tranche to stabilize its domestic markets. Sri Lanka are looking for par-boiled (Nadu) and Samba categories at this moment and can start with 300,000 MT.

Japan International prices of rice are on rise, with Thai rice trading at highest in about three years amid growing demand from Iran. Export prices of grade-A Thai white rice came to $492 a ton in mid-June, up 10% from a month earlier and the highest since August 2014. A big buyer is Iran, which has returned to the international markets after its landmark nuclear deal with six world powers. The Iranian government and corporate buyers in the country got their hands on 40,000 tons to 50,000 tons of jasmine rice and grade-B white rice recently. Thailand rice exporters are eagerly securing supplies for shipment to Iran. Appreciation in the Thai baht is lifting international prices as well.

Prices of rice remained unchanged in the major markets. In Karnal, Haryana, 1121 basmati sella rice was quoted at 5,300-5,400 rupees per 100 kg, while permal raw variety non-basmati rice traded at 2,800 rupees per 100 kg.

Bangladesh state grains buyer issued its fourth international tender since May, looking to import 50,000 tonnes of parboiled rice as it grapples with depleted stocks and record local prices. The deadline for offers is July 9, with the rice to be shipped within 40 days of signing any deal. Growing demand from Bangladesh will help stoke Asian prices. Ataur Rahman, additional secretary at the food ministry, told Reuters last week, that country import 200,000 tonnes of white rice at $430 a tonne and 50,000 tonnes of parboiled rice at $470 a tonne from Vietnam in a government-to-government deal. Those rates are sharply higher than what it has been paying through previous tenders. Bangladesh is buying 50,000 tonnes of white rice at $406.48 a tonne and 100,000 tonnes of parboiled rice at $427.85 and $445.11 a tonne through tenders.

USDA Madagascar 2017/18 rough rice production is estimated at 3.5 million metric tons, down 0.2 MMT from last year. The estimated output is below the 5-year average due to a severe drought in the central and northern regions of the country where nearly 80 percent of Madagascar rice is grown. Area is estimated at 2.2 million hectares, down 0.2 million hectares from last year due to the drought. Seasonal rainfall during the first half of the rice growing season (November 2016 through February 2017) was the lowest in the past 36 years. The drought in the central and northern parts of the country reduced planting and significantly reduced yields.

The government has decided to reduce the duty on rice imports by more than half the existing rate to encourage the private sector to import the staple and thus help stabilise the volatile rice market. The import duty will be 10 percent, down from 28 percent.

The National Cooperative Dairy Federation of India on Friday bought 1,500 tonne de-oiled rice bran at 1,485 rupees per 100 kg and 300 tonne rice polish at 1,826 rupees through an online auction. The dairy body also bought 600 tonne maize at 1,755 rupees per 100 kg through the auction.

The National Cooperative Dairy Federation of India will buy 6,300 tonnw de-oiled rice bran and 2,450 tonne of rice polish through a reverse electronic auction Friday.

From July 1, post-Goods and Services Tax (GST) introduction the rice is set to become expensive by three to five rupees per kilogram. India is the world largest producer of rice apart from Pakistan and Thailand, accounting 20 per cent of world production. As per the GST Act, branded and packaged rice attracts 5 per cent tax, in addition to the tax levied by the state government at 1.5 per cent; the total tax would be 6.5 per cent per kilogram. In fact, the price of all varieties of rice is expected to increase. The rice cultivating states mainly Karnataka, Andhra Pradesh, West Bengal and Punjab will be affected by the change of tax rate. Most of the states are charging only 1.5 per cent tax, this is the first-time rice will get taxed at 5 per cent.

Thailand rice exports are likely to hit a record high this year. Thailand 2017 rice exports are tipped to reach 11 million tonnes, the most ever, because of rising demand in rice-importing countries at a time that production in grower countries is falling. Thai 5% broken grade white rice to US$462 (15,684 baht) a tonne, up from last month $416 a tonne.