Rice production, suppy lower in June
Jun 11, 2009 2:02 PM
U.S. rice supplies in 2009-2010 are 3 million cwt lower than last month, as estimated production is lowered 4 million cwt and imports raised 1 million cwt, says a U.S. Department of Agriculture World Agricultural Supply and Demand (WASDE) Report.
U.S. rice production in 2009-2010 is projected at 220 million cwt, nearly 2 percent less than last month, but 8 percent more than 2008-2009. Area harvested is unchanged at 3.16 million acres. However, average rice yield is projected at 6,955 pounds per acre, down 127 pounds per acre or about 2 percent from last month’s report.
Projected yield in June is based on trend yields by rice class for the period 1990 to 2008, adjusted downward for late planting and slow development in the Delta region caused by heavy rains and excessively wet field conditions in May.
Imports for 2009-2010 are projected at 22 million cwt, 1 million cwt more than last month and 2 million cwt more than the revised 2008-2009 figure. Total rice use for 2009-2010 is unchanged from last month, with domestic use and residual and exports all unchanged. However, the rough rice export projection is lowered 2 million cwt and entirely offset by an increase in the combined milled- and brown-export forecast. Ending stocks for 2009-2010 are projected at 36.2 million cwt, 8 percent less than one month ago, but 56 percent more than in 2008-2009.
U.S. imports in 2008-2009 are raised 1 million cwt, all in long-grain rice, due to the larger-than-expected pace of imports, principally from Thailand. Although the domestic and residual projection for 2008-2009 is unchanged at 135 million cwt, rice by class projections are changed, with long-grain rice domestic use raised 1 million cwt and combined medium- and short-grain rice lowered by an equal amount. Exports for 2008-2009 are projected at 94 million cwt, up 1 million cwt, all in combined medium- and short-grain rice. Ending stocks for 2008-2009 are unchanged at 23.2 million cwt.
The rice season-average price projections for 2009-2010 are unchanged. However, changes are made in 2008-2009 by class rice price projections, with the price range for long-grain rice lowered 5 cents per cwt on each end to $14.55 to $15.05 per cwt; and the range for combined medium- and short-grain rice raised 20 cents per cwt on each end to $21.10 to $21.60 per cwt. The 2008-2009 all rice price estimate is unchanged from a month ago at $15.75 to $16.25 per cwt.
Projected global 2009-2010 rice supply and use are nearly unchanged from a month ago. Global production is raised about 400,000 tons, primarily because of an increase for the EU-27 and Brazil, that is partially offset by reductions for the United States, Iraq and Taiwan. The change in Brazil is based largely on an increase in the 2008-2009 rice crop. The 2009-2010 Brazil crop will not be harvested until March to May 2010. Ending stocks for 2009-2010 are projected at 95 million tons, 300,000 more than last month, and 5.1 million tons, or about 6 percent, more than 2008-2009.(westernfarmpress.com)
Commodities to Be Restrained for 2-3 Years, OECD Says
By Tara Patel and Stuart Wallace
June 17, 2009 (Bloomberg) -- Commodity prices will be restrained by a weaker global economy for the next two to three years, while remaining above their average over the previous decade, the Organization for Economic Cooperation and Development said in a report on the outlook for agriculture through 2018.
Crop prices will be 10 percent to 20 percent higher over the next 10 years than from 1997 to 2006 and vegetable oils will advance more than 30 percent, the Paris-based OECD and the United Nations’ Food and Agriculture Organization said in a report today. Meat prices won’t exceed the average of the previous decade, while dairy prices may be “slightly higher.”
“Continued weakness in the general economy will further dampen commodity prices over the next 2-3 years,” the two groups said in the report. Still, “the reduction in agricultural prices, production and consumption associated with lower incomes is likely to be moderate, as long as economic recovery begins within two to three years.”
Prices of wheat, rice and corn rose to records last year, sparking riots from Haiti to Ivory Coast. The number of hungry people in the world will increase to a record 1 billion this year, the FAO said last month. Its index of 55 foods rose for a third consecutive month in May.
“Unless we see energy prices rising rapidly, the risks are low but present” of a repeat of the surge in agricultural prices, Merritt Cluff, a senior economist at the Rome-based FAO, told journalists in Paris today.
Price of rice, price of power
Now that we have a Cabinet whose assets total close to Rs. 5 billion on its own declaration, with Ministers worth over Rs. 75 million each on average, it will be worth watching how it rises to the challenge of identifying with the poor and the hungry. That Rs. 5- billion figure, painstakingly compiled by the National Election Watch, a coalition of over 1200 civil society organisations working across India, covers 64 of the 79 Ministers. The other 15 are Rajya Sabha members whose updated assets are yet to be computed. True, these figures are skewed by the fact that the top five Ministers alone are worth Rs. 2 billion. However, as the NEW points out, the rest are not destitute. In all, 47 of the 64 are crorepatis. And the remaining 15 won’t harm the score too much when their totals come in.
Together, they will preside over the destiny of, amongst others, 836 million Indians who “get by with less than Rs. 20 a day” (National Commission for Enterprises in the Unorganised Sector report, August 2007). This challenge will unfold in a Lok Sabha where the average worth of an MP is Rs. 51 million. Again, this average too, is skewed by a chunk of 60-70 MPs of the 543 whose asset worth is relatively very low. On the other hand, many have notched up large gains in wealth during their first term as MPs.
In a complex and layered verdict driven by many factors, one factor seems clear: most governments that stressed welfarist measures — particularly cheap rice and employment — gained in last month’s election results. This was regardless of which party was leading them — the Congress, the BJP, the BJD, the DMK or any other. Some of these measures might not have led to large numbers of people going out to vote for those governments. But they at least lowered hostility levels amongst the voters in a hungry nation. As Madhura Swaminathan points out, the FAO data confirm that “no country comes close to India in terms of the absolute number of people living in chronic hunger.”
The hungry have had it pretty bad. The rise in food prices was extremely steep over the last five years, one of our more adverse periods in decades. Between just 2004 and 2008, the price of rice rose by over 45 per cent and of wheat by more than 60 per cent. Atta, edible oils, dals, milk and even salt saw rises of between 30 and 40 per cent. Lower or ‘near-zero’ inflation has seen no drop in food prices. That the media never saw hunger and cheap food as a major poll factor says more about them than the issue.
The DMK’s colour television set giveaway — the focus of much derisory media attention — was never a fraction as important as its provision of 20 kg of rice per family at Rs.1 a kg since September 2008. That too, for anyone with a ration card, without dividing people into the APL or BPL groups. Tamil Nadu had already been providing rice at Rs.2 a kg for some years. It also took the NREGA seriously. The State government gained on both counts.
In Andhra Pradesh, like in Tamil Nadu, the Congress government of Y.S. Rajasekhara Reddy was helped by the presence of a third party — Chiranjeevi’s Praja Rajyam — which drew a lot of anti-Congress votes, crippling the rival Telugu Desam Party. But YSR’s was also a government which in its first year restored lakhs of cancelled BPL cards and issued lakhs of new ones (The Hindu, Sept. 29, 2005). In nine years, Chandrababu Naidu’s government issued no BPL card till just before the elections. That in a State where hunger and food have been huge issues even in urban areas. Andhra Pradesh was where rice at Rs. 2 a kg began with Naidu’s father-in-law, then Chief Minister N.T. Rama Rao. NTR’s charisma was never in question — but rice at Rs. 2 a kg helped, more than any other factor, to convert it into votes.
Chief Minister Rajasekhara Reddy in fact stole the TDP’s clothes when in April 2008 he brought back the Rs. 2 a kg rice scheme — a year before the national polls. This was at 4 kg per person (or 20 kg per family of five). An earlier generation of Congress leaders had trashed NTR’s pet project as a “costly gimmick.” But Dr. Reddy took a more sensible line and gained from it.
During Mr. Naidu’s years in power, so lavishly praised in the media for his reforms, the public was repeatedly hit by massive hikes in power charges, water rates, food prices and other costs. He has not managed to live down his record or regain credibility in 2009.
His adversary ran a decent NREGA programme. In the backward Mahbubnagar district, distress migrations fell as many found work under the NREGA. (See The Hindu, May 31, 2008) This at a time when food prices were biting. So much so that people in their 70s turned up at NREG sites for work — their Rs. 200-a-month pensions blown away by the rise in food prices. Even on that front, though, the Andhra Pradesh government earned some credit. When it assumed power, there were 1.8 million people in the State getting old-age, widow and disability pensions — a paltry Rs. 75 each. This was raised to Rs. 500 for disabled people and Rs. 200 for the rest. Hardly enough — but a lot more than before. And the number of people getting these pensions rose four-fold to 7.2 million. The State also has one of the country’s better pension schemes for women.
In Orissa, Naveen Patnaik played his cards most effectively, gutting the BJP and corralling the Congress. But he also gained hugely from giving people cheap rice. In the burning hunger zones of Kalahandi-Bolangir-Koraput, 25 kg of rice had been offered to all families at Rs. 2 a kg since mid-2008. In the rest of the State, this was restricted to BPL families. The government also gave out 10 kg of free rice to the poorest families in the KBK districts. This had a major impact in curbing starvation deaths. Mr. Patnaik also increased the numbers of those coming under pension schemes — and housing projects for the poor — quite significantly. (At the same time, he implemented the Sixth Pay Commission recommendations before the polls, sewing up the middle classes as well).
Sure, these were not the only issues on which people voted, but they played a big role (In the case of YSR and Mr. Patnaik, there was another factor that helped this along. The positive measures in both States were present and visible. The negatives — and they are explosive, like massive human displacement, SEZs, dangerous mining projects — are in the pipeline. Disasters waiting to happen but which will take two or three years to do so. Unless, of course, those policies change.)
In Chhattisgarh, however repugnant the ways of that government in many spheres, Chief Minister Raman Singh took a personal interest in declaring 35 kg per family at Rs. 3 a kg. His government then unilaterally “increased” the number of people below the poverty line to almost 15 million — in a population of 20.8 million (2001 census). That is, close to 70 per cent of the population was declared BPL. This was done several months before the 2008 Assembly elections. It helped the government in both the State and national polls.
The Left Front in West Bengal failed on both fronts. The State saw rioting at ration shops last year as the Centre cut allocations of grain sharply. Yet West Bengal, which tops the States in rice production, moved towards provision of cheaper rice only early this year. Too reluctantly and too late. Its performance in the NREGS was also very poor. Hunger was a factor in the rout of the Left Front.
So what should those in power read into the poll results? That they have a mandate for more liberalisation, privatisation, high prices and other such “reforms?” Or that the price of rice could be the price of power? That jobs and security are vital? Food prices and cheap rice are crucial, though not the sole issues. Governments cannot bank on such moves already made to bring them perpetual gains. But the whole process is a step ahead and has raised the bar on public expectations. Sharp reversals could prove suicidal.
The surge in agricultural commodity prices resulted from a combination of structural and temporary factors. Structural factors such as global population growth, rising incomes in emerging economies and the development of new market outlets have contributed to a gradual rise in world demand.
Global supply was unable to keep pace due to a slowdown in the growth of food crop grain yields and the characteristics of world agricultural markets which are thin and typically constrained by the seasonality of production.
Moreover, increasing production costs, due inter alia to rising energy prices, spilled over on agricultural commodity prices. The impact of these structural factors was amplified by large production shortfalls resulting from adverse weather conditions and trade restrictions imposed by several exporting countries. Exchange rate developments, growing speculative activity in the commodity derivative markets and the close relationship between agricultural and other commodity markets, such as the oil market, also affected agricultural commodity price developments.
The contribution of these various factors varies between sectors. For example, changes in wheat and rice prices are largely attributable to supply-side factors while maize and soybean markets have been mainly driven by a strong growth in global demand both for meat consumption and for industrial use. (ec.europa)
Vietnam: Small-scale production hindering agricultural production development
The Cuu Long River Delta has been taking drastic measures to heighten the efficiency of agricultural production. However, the small scale of production in the region has been hampering the effort
Recently, more and more Vietnamese farm produce has been ‘going abroad’. Hoa Loc mangos have been going to Japan, Lo Ren Vinh Kim Star Apples to South Korea and Europe, My Hoa pomelos to many European and Asian countries.
However, farmers are not happy because their products are being consumed and favoured by many countries in the world.
Deputy Chairman of the Lo Ren Vinh Kim Star Apple Cooperative in Tien giang province Le Van Son said that local farmers export products because they want to polish their images rather than because they aim to get profit.
Son said that farmers get the modest profit of 5,000 dong per kilogramme of fruits exported, while they earn 1,000 dong in profit for every kilogramme of fruits sold on the domestic market. However, the problem lies in the fact that the export volume is too small, not enough to bring satisfactory profit to farmer.
The cooperative exports only 100 kilogrammes of star apples a week to Russia, while it ships 7,000 kilogrammes to Hanoi.
Cho Gao dragon fruit has also been ‘going abroad’. Nguyen Thi Be Chin, Deputy Chairwoman of Cho Gao Dragon Fruit Cooperative, said that 250 kilogrammes of dragon fruit are being shipped to Russia and Germany every week, while nearly ten tonnes are being shipped to Singapore. Moreover, it provides some 1,000 kilogrammes to Metro supermarket.
My Hoa Nam Roi Pomelo has contracts to export 1,000 tonnes of pomelo, which is considered a big export volume in comparison with other fruits. However, the export volume is nothing if noting that the whole province of Vinh Long puts out 80,000 tonnes, and Binh Minh alone can put out 20,000 tonnes a year.
Thanh My Rice Cooperative in Tien Giang province is happy because ADC Company has been a responsible for the outlet of the cooperative, purchasing rice at 20 percent higher prices than the average market prices. However, in fact, the members of the cooperative do not earn much money from the cooperation programme because of the small rice growing area of 11.5 hectares only.
Limited production scale
In fact, farm produce in the Cuu Long River Delta has high quality and is being produced under the Global Good Agriculture Practice (GAP). Farmers there cannot sell products in big quantities not because of low quality, but because of low output.
Metro Supermarket is now consuming 400 kilogrammes of Cho Gao dragon fruit, and it wants to increase the volume. However, Cho Gao Dragon Fruit Cooperative just can meet half of the demand, because the cooperative now has only 32 households with GAP-certified growing area of over 30 hectares. With the capacity of 20 tonnes per hectare, the total output is 600 tonnes per annum, of which only 1/5 can meet the requirements for export or sale at supermarkets.
Similarly, only seven hectares of Vinh Kim star apple area has got GAP certificates. These can churn out just 105 tonnes per annum. Only 24 hectares of My Hoa Nam Roi Pomelo have got the certificate, which means that only 336 tonnes of fruit can be put out a year.
As said above, not all products can meet requirements for export. Exporters always have to collect products from other sources to fulfil their export contracts. Son from Lo Ren Vinh Kim said that in general, only one tonne of products can be selected from every 30 tonnes.