Northeast japonica rice price rises lack momentum, stability may become the mainstream

It is understood that at present, as temperatures gradually drop and the large-scale rice harvest is about to end, the volume of japonica rice coming onto the market in Northeast production areas has increased somewhat, and policy-based purchasing is being rolled out successively. At the same time, various grain purchasing, selling and processing enterprises have also successively entered the market to purchase, but because demand in the terminal market is not strong and the temporary storage purchase price supports the market, farmers have a relatively strong mentality of holding out for higher prices when selling grain, while grain-using entities are cautious about purchasing new grain. In addition, in areas where temporary storage purchase depots have opened for purchasing, the volume of paddy rice purchased is gradually increasing and prices are stabilizing, while in areas where depots have not yet opened for purchasing, the volume of paddy rice purchased is not large; at the same time, there are certain differences in paddy rice quality across regions, for example, the purchase price for paddy rice with moisture content above 18% and milled rice yield below 67% is relatively low. The specific analysis is as follows:

Rice market purchase and sale prices are moving toward stabilization

In recent times, policy-based purchasing in the japonica rice market in Northeast production areas has been rolled out successively, and supported by this, its price trend has stabilized. It is understood that as of now, the purchase price of 2015-produced grade 3 japonica paddy rice from Changchun, Jilin is 3120 yuan/ton, down 40 yuan/ton from the end of last week, and the purchase price of standard No. 1 Northeast rice is 4850 yuan/ton, unchanged from the end of last week. The train loading price of grade 3 japonica rice in Tiexi, Songyuan is 3200 yuan/ton, unchanged, and the train loading price of standard No. 1 Northeast rice is 4650 yuan/ton, unchanged. The purchase price of grade 2 japonica rice in the Jiamusi area of Heilongjiang is 3400 yuan/ton, and the train loading price of standard No. 2 Northeast rice is 4680 yuan/ton, unchanged from last week. The purchase price of 2014-produced grade 2 japonica rice in the Hulin area is 3240 yuan/ton, up 40 yuan/ton from last week; the train loading price of standard No. 1 Northeast rice is 4400 yuan/ton, unchanged from last week.

Farmers' rice harvesting work is basically finished

At present, the rice harvesting period for farmers in Northeast China has basically ended. Taking Jilin Province as an example, because Jilin farmers' rice was affected during the regreening stage by low temperatures and slow seedling recovery, the rice growth period was prolonged, causing the rice harvest period to be delayed by about half a month, not ending until October 25. In addition, due to factors such as warmer weather, timely late harvesting may become the norm. This year, Jilin's rice transplanting area was about 11.8 million mu, 20,000 mu less than last year, a decrease of 0.2%, with a per-unit yield of 1010 jin/mu. Output was about 6 million tons, flat or slightly higher than last year. Rice quality was basically flat with normal years and lower than last year. The brown rice rate was above 77%. Grade 1 accounted for 20%, grade 2 accounted for 50%, and grade 3 accounted for 30%, all unchanged from last year. However, due to factors such as early low temperatures and weather, this year Jilin rice's milled rice yield was lower than in normal years, with the average milled rice yield at about 65%, below the normal-year level of 66-67%.

Market-support purchasing unfolds, and the volume of japonica rice entering warehouses grows markedly

At present, the rice market clearly shows a pattern of "new" being strong and "old" being weak, with high quality commanding high prices. As the number of depots implementing market-support purchasing increases, the volume of policy grain entering warehouses this week has also shown rapid growth. According to statistics from Sinograin, during the period from October 16 to 20, production areas across the country purchased a total of 260,200 tons of 2015-produced market-support japonica rice, achieving explosive expansion compared with 3,300 tons in the previous period. As of October 20, a cumulative 263,500 tons of market-support japonica rice had been purchased, while in the same period last year protective-price purchasing had not yet started. As the main variety purchased and stored by state reserve depots, relatively cheap ordinary japonica rice performed overall better than the high-quality rice market.

Rice market demand is sluggish and prices have fallen back

Since late October, more new-season japonica rice has come onto the market, while demand in the rice market has remained persistently sluggish and weak. In particular, after new japonica rice came onto the market in main production areas, market purchasing was not active, and prices in some areas of the south showed a downward trend. As of now, the wholesale price of Northeast round-grain rice in the Beijing market is 4460-4640 yuan/ton, unchanged from last week; the wholesale price of Jiangsu-produced japonica rice in the Hangzhou area is about 4520 yuan/ton, down 20 yuan/ton from last week; the wholesale price of Heilongjiang-produced round-grain rice is 4920 yuan/ton, down 40 yuan/ton from last week; the wholesale price of Northeast japonica rice in the Fuzhou market is 5200 yuan/ton, down 60 yuan/ton from last week. At present, the market is in a concentrated period for Northeast japonica rice and southern middle indica rice coming onto the market, and starting in November, new-season japonica rice from Jiangsu and late indica rice from Hunan and Jiangxi will also come onto the market in batches. The rice market will enter a new round of the supply cycle, and the market may continue a weak adjustment pattern.

⟦NL> China's rice imports increased in September

According to customs statistics, in September 2015 China imported 357,700 tons of rice, up 66.37% month on month and up 98.72% year on year. From January to September, China imported a total of 2.3142 million tons of rice, up 26.65% year on year. Entering the second half of the year, rice import volumes gradually rose, and combined with large volumes of new-season middle and late rice coming onto the market domestically, short-term market supply pressure increased.

International rice market prices have begun to rise

In October, multiple institutions lowered their forecasts for 2015/16 global rice output. Among them, USDA forecast 2015/16 global rice output at 474 million tons, 1.7 million tons lower than last month's forecast and down 1% from the previous year; FAO forecast this year's global milled rice output at 742.6 million tons; the International Grains Council (IGC) forecast 2015/16 global rice output at 476.6 million tons, below the earlier forecast of 478.8 million tons and compared with 479.1 million tons the previous year, which would be the first decline in global rice output since 2009/10. At present, due to the downward revision of global rice output, spot market prices for Asian rice have begun to rise somewhat. It is understood that as of now, Thailand's 100% grade B rice is quoted at 383 US dollars/ton (about 2432 yuan/ton), up 2 US dollars/ton from the same period last week and down 53 US dollars/ton from the same period last year, Bangkok FOB quote. Vietnam's 10% broken rice is quoted at 365 US dollars/ton (about 2318 yuan/ton), up 18 US dollars/ton from the same period last week and down 70 US dollars/ton from the same period last year, Ho Chi Minh City FOB quote.

In summary, as the volume of new rice coming onto the market increases, the contradiction of market supply exceeding demand will gradually emerge. It is expected that Northeast japonica rice prices will lack upward momentum, but after Heilongjiang Province and Anhui Province launched the 2015 minimum purchase price execution plan for japonica rice, Jiangsu Province and Jilin Province also launched the 2015 minimum purchase price execution plan for japonica rice starting from October 19 and October 25 respectively, in order to curb price declines, boost active market purchasing, ensure that farmers' returns are not affected, and also prevent sharp fluctuations in market prices. Therefore, at present, as the volume of new-season japonica rice coming onto the market gradually increases, purchasing entities are also increasing accordingly, and due to differences in region, quality and business nature, japonica rice purchase prices differ. Overall, the domestic japonica rice market purchase and sale is transitioning toward new grain, old grain temporarily withdraws from the market during the purchasing period, the price decline is not yet obvious, and stability may become the mainstream.