Market Analysis ended 30.12.2004

In Asia, Vietnam, world’s second largest rice exporter, has said that the country’s paddy output next year would edge up slightly to 36 Mil MT, from this year's estimated 35.87 Mil MT. The agriculture ministry placed the exportable rice for next year at between 3.8 Mil MT and 4.0 Mil MT. Vietnam competes with Thailand, the world's top rice exporter, which is among the Asian nations hit by Sunday's Tsunami.

China is expected to post an unprecedented $5.5 billion agricultural trade deficit this year. The scenario is being seen as in part due to wider market access to foreign commodities as the country consistently fulfills its commitments to reduce tariff rates on agricultural goods and implemented tariff-rate quotas.

Bangladesh has developed two new high yield varieties of rice BRRI-Dhan-42 and BRRI-Dhan-43. These are medium drought resistant, of short duration and high yield compared to the existing varieties. These showed the yield potentials of 4 MT per hectare within 100-day growth duration.

Spain will send to Medلn (Indonesia) 5,000 kilos of rice which is processed and ready to use for victims of the tidal wave disaster that struck Southeast Asia on Sunday.

The US rice industry is upbeat over the significant gains that it apprehends will come its way in the South Korean market. Seoul's agreement on opening of its rice market is seen as an opportunity for American farmers to expand sales not only to Korea but the entire Asia. The US, the second-largest rice exporter to South Korea, has called on the country to hike its import quota and the ratio of US rice sold directly to local consumers.

CBOT News:

Chicago rough rice futures ended modestly higher Thursday, finishing the last trading session of the 2004 calendar year firmly on late speculative buying. CBOT January rice settled $0.03 per cwt higher at $7.18 and March rice finished $0.03 per cwt higher at $7.39

In Asia a major announcement by South Korea set the grain markets across the world in a buoyant mood. Seoul after a protracted and laid out negotiation process agreed to allow rice imports of nearly 8% of domestic consumption by 2014. Under a 1994 global free-trade agreement, South Korea was allowed to limit rice imports to 4% of domestic consumption, or about 205,000 MT.

Seoul’s formal announcement of agreeing to double rice imports by 2014 came as a great New Year gift for China and the US as they are expected to benefit the most from the decision. China will receive an import quota of 116,159 MT of rice while the US will receive a 50,076 MT quota and Thailand 29,963 MT. The balance will go to other nations involved in the talks.

Pakistan is looking at a new rice variety developed by the Nuclear Institute of Agriculture (NIA) to multiply production by manifold in the country. The NIA has already led to the development of five varieties of wheat, four varieties of rice, and one variety each of cotton, sugarcane and mungbeans. These varieties had played a significant role in raising the socio-economic status of the farmers, particularly of Sindh by enhancing the agricultural output.

A recent study by the Brazil government has revealed that 40% of the country’s adult population is overweight, and about 10 million are obese. The study speculates that this may be due to a sudden change in the food habits from traditional foods like rice to junk food.

Many rice farmers in Costa Rica have decided against sowing their rice crops due to acarus plague that has already damaged a 20% of the harvest. One of most affected areas is Guلpiles. The Ministry of Agriculture has already initiated measures to avoid further spread of the plague.

A study made by the Inter-American Institute of Cooperation for Agriculture - Dominican Republic – has indicated that the quality of rice of some country’s producers does not match market standards, since many of the rice factories rely on little and very old machinery. In addition drying process and transportation are also outdated.

Chicago rice futures finished Wednesday's session lower across the board, with the rolling of spreads and light speculative selling featured attractions. CBOT Jan rice settled 10 cents lower at $7.15 per hundredweight and March rice finished 4 1/2 cents lower at $7.36 per hundredweight