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USA Rice Daily
Up-to-the-Minute News on Issues and Activities
Friday, July 10, 2015
U.S. Rice Industry United in Efforts to Open Chinese Market 
Dow Brantley
Brantley wants a reasonable agreement

DALLAS, TEXAS -- At a meeting here yesterday the USA Rice Producers' Group unanimously passed a motion urging the conclusion of negotiations between the United States and China to establish a phytosanitary agreement that would pave the way for U.S. rice to be exported to China.

 

The group, representing rice farmers in all six rice states covering close to 90 percent of the U.S. rice crop, offered guidance to U.S. negotiators to help them finalize a deal that would be acceptable and manageable to the U.S. industry.

 

The negotiations, between USDA's Animal and Plant Health Inspection Service (APHIS) and their Chinese counterparts (AQSIQ), have dragged on for years and hit snags recently when the Chinese made demands the U.S. industry felt were not based on sound science.

 

"The Chinese are demanding our industry set traps for insects that do not exist in the United States, and that we set a totally unreasonable number of traps per square foot of storage space," said John Owen, a Louisiana rice farmer and chairman of the USA Rice Producers' Group.

 

The USA Rice Millers' Association, whose members would be responsible for the trapping, agreed with the producers.

 

"We're not opposed to trapping, but, any agreement needs to meet reasonable standards that are consistent with international trade agreement precedents and be based on quantifiable, scientific data consistent with previous USDA/APHIS procedures," said Chris Crutchfield, a California miller and chairman of the USA Rice Millers' Association.

 

Chinese negotiators are also demanding very specific package labeling that is both unprecedented and many felt unfeasible.

 

"The labeling requirements are not appropriate for inclusion in a phytosanitary protocol at all," said Dick Ottis, chairman of the USA Rice Merchants' Association.

 

The three organizations came together under the industry's national organization, USA Rice, to adopt the joint resolution.

 

Dow Brantley, an Arkansas rice farmer and chairman of USA Rice, was pleased with the industry's unity and strong statement that both supports, and guides, U.S. negotiators.

 

"There's no question we'd like to participate in the Chinese market, but these ever-evolving demands being made by the Chinese government were making it ever-less likely we were going to actually gain access to the market," Brantley said.  "We appreciate the efforts of the U.S. negotiators on our behalf, and are happy to provide input as a united industry."

 

Brantley said the market has great potential for the U.S. industry, and that his group has been working for years to establish trade relationships and line up customers for the day the phytosanitary deal is complete.  However, he says if the final deal is based on unreasonable, unscientific demands that can never be truly satisfied, there's little point to agreeing.

 

"The notion that you can agree to something with the Chinese government now and fix it later is very naïve," he said.  "Once the ink dries on that deal, the Chinese are going to hold us to it, so it needs to be a deal we all can live with today and that actually allows us to start sending our rice over there."

 

Contact: Michael Klein (703) 236-1458

WASDE Report Released
USDA Logo

WASHINGTON, DC --U.S. 2015/16 all rice supplies are lowered 11.0 million cwt to 278.4 million due to a production decrease. Supplies of long-grain rice are lowered 12.5 million, but medium- and short-grain rice supplies are raised 1.5 million. All rice production is lowered 12.0 million cwt to 207.0 million due mostly to a decrease in area with long-grain production reduced 9.5 million and medium- and short-grain rice lowered 2.5 million. All rice planted area, as reported in

Acreage is estimated at 2.77 million acres, with long-grain at 2.07 million, and medium- and short-grain area at 0.69 million. Beginning stocks for 2015/16 are raised 1.0 million cwt to 46.4 million due to revisions made to 2014/15 all rice and rice-by-class supply and use. All rice average yield is estimated at 7,544 pounds per acre. All rice total use is lowered 1.0 million cwt to 240.0 million cwt, with domestic and residual use lowered 1.0 million cwt to 130.0 million, and exports unchanged at 110.0 million cwt. Ending stocks are projected at 38.4 million cwt, down 10.0 million.

U.S. 2014/15 all rice exports are lowered 1.0 million cwt, raising ending stocks by the same amount. Long-grain domestic and residual use and exports are raised; ending stocks lowered; and the season-average price increased. Medium-and short-grain domestic and residual use and exports lowered; ending stocks raised and the average price unchanged. June 1 Rice Stocks implied shifts in the rice-by-class domestic and residual use estimates. Rice-by-class export estimates are based on U.S. Census Bureau trade data through May and the latest export sales data.

U.S. long-grain 2015/16 rice season-average price is projected at $10.90 to $11.90 per cwt, up 90 cents per cwt on each end of the range. Medium- and short-grain price is unchanged at $17.80 to $18.80 per cwt. All rice price is projected at $13.00 to $14.00 per cwt, up 70 cents on each end of the range. California medium- and short-grain price range is raised 50 cents. Other States medium-and short-grain price midpoint is lowered 20 cents per cwt.

Reduced global 2015/16 rice production leads to lower ending stocks. World rice production is projected at 480.3 million tons, still a record, down 1.4 million from last month, but up 4.0 million from last year. Rice crops are lowered for Australia, Madagascar, North Korea, Thailand, and the United States. Dry conditions in principal rice growing areas of Thailand led to a 4-percent cut in production to 19.0 million tons, still slightly above 2014/15. North Korea's crop is lowered 6 percent to 1.6 million tons due to dry conditions in the main rice producing region. Australia's rice crop is lowered due to falling reservoir levels and a drop in expected planted area. Global consumption and trade are lowered. Thailand's export projection is reduced 0.8 million tons to 10.2 million because of tighter supplies.  Conversely, export projections are raised for Burma, Pakistan, and Vietnam. Global ending stocks are projected at 90.5 million tons, down 0.9 million, the lowest since 2007/08. The global stocks-to-use ratio at 18.5 percent is the lowest since 2006/07. Ending stocks are lowered for Pakistan, Philippines, Thailand, Vietnam, and the United States.

Read the full WASDE report here.
CME Group/Closing Rough Rice Futures   
CME Group (Prelim):  Closing Rough Rice Futures for July 10.

Month
Price
Net Change
July 2015
$10.855
+ $0.040
September 2015
$11.085
+ $0.035
November 2015
$11.355
 + $0.035
January 2016
$11.620
 + $0.035
March 2016
$11.780
+ $0.035
May 2016
$11.950
+ $0.035
July 2016
$11.950
+ $0.035

In the News 

Around the Country

Disappearing Habitat Texas Water Resources Institute

As the region's water supplies, environment and populations continue to change, river authorities and water managers also have a myriad of difficult tasks in this water-strapped era: educating urban water users about conservation, enforcing drought plans and restrictions, and budgeting water to supply millions of users.

 

States, Groups Sue Over WOTUS Rule High Plains Journal

The EPA early in the morning of June 29 published its rule on the Waters of the United States under the Clean Water Act. By the end of the day, however, 18 states had filed lawsuits to challenge the legality of the rule. By the time the July 4 holiday rolled around, 27 states and state agencies as well as 14 agriculture-oriented organizations had filed lawsuits.

 

Tariffs and Trade

U.S., Japan Enter Final Trade Talks Ahead of Possible TPP Agreement Japan Times

The meeting took place as Kyodo News reported that the government was discussing a nontariff framework for certain imports in return for allowing Japan to maintain high tariffs on rice.

USA Rice Daily Index of Articles, July 6-9

Thursday, July 9  

U.S. Rice Heading to Iraq Again

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Wednesday, July 8
Brown Rice Video Takes Top Spot in MyPlate Video Contest

Tuesday, July 7
USA Rice Organizes American Independence-themed Cook-Off in Mexico

Monday, July 6
USA Rice Participates in LSU Field Day
IARC Classifies 2,4-D as Possible Carcinogen
Crop Progress:  2015 Crop 25 Percent Headed
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