The exporter received the Invoice No. 145 Dated 17.12.2009 for total advance payment of Rs. 2,846,350/= vide e-mail from Mr. Sajjad Saeed Accountant of OTCL.

The Rice exporters promptly made the payment of the amount of Rupees Two Million Eight Hundred Forty Six Thousand Three Hundred and Fifty (PKR 2,846,350/=) plus Rupees Five Lacs collected from Ghaffar Corporation, through Cheque number 3445775, Dated 17 – 12- 2009 of MY BANK LTD and M/s. OTCL issued Bill of Lading # OTCL00405COT for loading of cargo on M/s. Maersk Benin Vessel on 09.01.2010.

On 16.12.2010 Rice Exporter informed Mr. Rehan Hafeez of OTCL that he have received complaint from the importer in West Africa that the containers have reached Cotonou seaport but the Maersk Line Agent refuses to release the cargo as freight has not been paid. On this Mr. Rehan Hafeez responded that he will personally meet the Exporter and discuss the issue. Later, he informed the Exporter that shipping line (Maersk Line) was asking for more money as charges of freight. At this point the exporters showed their strong reservations.

As the matter was still pending Rice Exporter called Mr. Rehan Hafeez in his office on 1^st March 2010 and very strongly protested on the unethical approach and intimated him about bad name the delay is causing to the exporter and the country. Mr. Rehan Hafeez showed his helplessness and asked for additional amount of Rs. 500,000/= and assured release of cargo in 48 hours. As delay was causing demurrages beside cargo getting rotten the rice exporter had no option but to pay. Pay Order No. 3647328 of M/s. Allied Bank Limited dated 3^rd March, 2010 in the name of Maersk Lines on A/c of OTCL was given to OTCL.

Five days passed but there was status quo. The Rice Exporter contacted Maersk Lines and was shocked to learn that not a single penny was paid to them by OTCL whereas the Exporter had made the payment way back in December 2009. This clearly indicated malalfied intentions of Mr. Rehan Hafeez and his freight forwarding company Ocean Tiger Container Line. Accordingly The Rice Exporter issued notice dated 13^th March, 2010 to OTCL.

Receiving no response Rice Exporter lodged a complaint to Federal Investigation Agency, National Trade and Transport Committee of Ministry of Commerce, Trade Development Authority of Pakistan, Supreme Court of Pakistan, Sindh High Court, Rice Exporters Association of Pakistan and Secretary General Pakistan International Freight Forwarders Association on 18^th March, 2010.

The fraudulent activity of freight forwarding company has deprived the country of 100 million dollars of annual foreign exchange revenue that is the most critical necessity of the country in view of current financial problems. We are reported that the Rice Exporters Association of Pakistan which is the body to protect Pakistani Rice Exporters is criminally silent in this issue and has not moved a single inch besides so many reminders sent by the Rice Exporter Ghaffar Corporation.

Pakistanrice.org as contacted to verify the entire matter with Mr. Mahmood Ghaffar, CEO of Ghaffar Corporation and Mr. Syed Haroon Haider Gilani who is representing Ghaffar Corporation along with his company The Vision with all the relevant correspondences’ pertaining to this matter.  Mr. Syed Haroon Haider Gilani responded to us,

“The Freight Forwarding company MS OTCL is also involved in several other cases of same nature with other exporters who are reluctant to come into the surface due to their own reasons but we regret that company is deprived of several hundred million dollars of foreign exchange, name of my beloved country is damaged but we are unable to get the culprit of this national crime arrested and prosecuted. If such practices remain unchecked, the moral of business community will further go down and country will face more and more financial crisis if current business and financial situation is not improved. This situation can only be improved if the business community is given more business friendly atmosphere and support from the government of Pakistan. We are ready to every possible help to our government in solution of our financial needs. Only if our government provides the good governance and best regulatory measure, ensuring a smooth and steady business atmosphere where corrupt elements are believed to be taken with iron hands instantly. For our matter we request Prime Minister of Pakistan to take the immediate notice of this issue and please arrange some immediate solution to save the fame of Pakistan and save it from the economic loss of a very lucrative market of rice export. I request your kind office to take necessary action to arrange;

-          The immediate release of shipment to the buyer in Niger.

-          Waiver of all penalties by shipping line due imposed.

-          Payment of Rs. 500,000 back to Ghaffar Corporation which were paid as additional freight on March 04 2010, to MS Ocean Tiger Container Line only if they release us the shipment but till the date (April 07, 2010) the shipment is not released to us.”

Federal Investigation Agency is also acting to bring the culprit OTCL into justice and for the purpose, we contact FIA corporate Circle Sindh, Inspector M. Anwar responded that he is actively pursuing the case and received the relevant documents from the Exporters and investigating the matter very actively.

These developments include:

-          The general liberalization of the international trade in sugar reduced supervision of payments as a consequence of reductions in currency and foreign exchange controls
the explosive growth in the number of independent nations (e.g. the former USSR),

-          Creating numerous new trade routes, international banks, currencies and governments. These are frequently characterised by inexperienced management and inadequate regulation. When the exotic is commonplace, criminals are less visible.

-          The advance in communications which enables criminals to operate by remote control and construct a web of fraud transcending boundaries with ease.

Frauds almost always have the general character of legitimate transactions of exchange, but with the crucial difference that while the honest party provides genuine value the fraudster provides little or none.

Since the Government of Pakistan scraped taxes on the import of sugar and announced a shortage of commodity in the country along with  raising the price of sugar at the Utility Stores Corporation outlets by Rs 7 per kg, a new scam was introduced in Karachi. A number of food and grain traders are being offered the Sugar by many unpopular and so – called commodity brokers to buy 25,000 tons of sugar, produced by various Sugar Mills in Sindh, including Alnoor Sugar Mills, Ansari Sugar Mills, Shahmurad Sugar Mills, Mehran Sugar Mills and Al- meezan Sugar Mills  at the price of Rs. 57 per kilogram. They are presenting a contract (as shown below) in which the offer of the sugar is detailed. The attractions in the offer are;

Page 1 of Contract

Page 2 of Sugar Contract

1-      Very low market price which is Rs. 57 per kilogram agains the prevailing market price of Rs. 65 – 68 per Kg which is mouth watering if it is actual for many people.

2-      Payment terms are  Term Deposit Receipt (T.D.R.) basis instead of paying cash / LC or any other mode of payment to anyone else but a scheduled Bank’s branch which is, as written in the “contract”, Allied Bank of Pakistan, Mohammad Ali Society branch, Karachi.

When I discussed the possible benifits of the fraudulent for this scam with many Traders, , their opinion was that

-          This is about to earn money through deposits in the bank under the Term Deposit Schemes. Bank is taken on board for such schemes and deposits from various business entities are deposited for certain period and after the expiration of the term, when Sugar is not delivered the money can be withdrawn back while the fraudulent makes money through the interest offered by the Bank for that certain time.

-          Some are of the opinion that there are some powerful political personalities of Hyderabad district who are looking for the people with sound financial holding. Once the money is deposited into the Bank under the T.D.R, the man is kidnapped and the deposited money is extorted or he is forced to release that money to the kidnappers.

There are several other possibilities of fraud in this scheme and all the people are warned not to entertain any such offers and brokers.

The amount of rice produced per hectare in some Asian countries is more than four times against what is produced in Africa, a senior government official observed.

The Vision Foods

Director of crop development in the Ministry of Agriculture, Food Security and Cooperatives, Mr Geofrey Kirenga, said this when he opened a regional workshop on rice and aquaculture production and marketing in East Africa held in Dar es Salaam.

“Some Asian countries, rice yields have increased up to five folds during the last decade. This is attributed to the development of high-yield rice varieties, which produce up to 14 tonnes of paddy per hectare, while in Africa, yields are still on an average less than 3 tonnes per hectare,” he said.

He said low productivity is a shortcoming that the National Rice Development Strategies should address. Mr Kirenga said to attain high levels in productivity as recorded in Asia, African countries have to deal with various shortcomings, including over-dependence on rain-fed agriculture, poor infrastructure, low levels of investment in agricultural production and post-production services.

According to him, Tanzania produces 850,000 tonnes of rice annually, which, he said, was not enough for domestic consumption. He listed other challenges as low levels of mechanisation, low levels of use of technological innovations such as improved seeds, agro-chemicals and fertiliser application, inadequate access to financial services and inadequate extension services to producers.

However, Mr Kirenga noted that Africa has untapped potential virtually in all sectors including the rice sub-sector. An advisor to the Japanese minister for Agriculture, Forestry and Fisheries, Mr Hidenori Murakami, pointed out during the meeting that his country was committed to strive to attain agricultural development in Africa.

Mr Mukarami promised that his country will continue to support African countries to increase both rice production and expansion of planted area, adding that rice was the third largest food in sub-Saharan Africa. ”Self-sufficiency ratio of rice in Africa would ensure food security, alleviate poverty and achieve economic development,” he added.

He said improved agricultural production and productivity as a big challenge for African countries, saying it require strong dedication and sustained efforts by all parties concerned. Along similar lines, FAO representative Samuel Eremi, said the project on rice and aquaculture production, market access and small-scale irrigation, was part of efforts that FAO and its partners are undertaking to contribute to the initiative of a coalition for African Rice Development (CARD) and regional and national programmes on food security.

The Vision Foods

The association attributed the increase to expanded harvesting areas by 27% to 15,500 hectares, and increased yields of 10.9 bushels per hectare.

Also in 2009, the general production volumes of buckwheat in Ukraine decreased by 25% 27,000 MT, the UGA said. Harvesting areas grew by 33.3% 4,000 hectares, but yields declined by 3.9 bushels per hectare to 7 bushels per hectare.

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That would mark a doubling of last year’s exports, he said, but still well short of levels before Egypt curbed sales in response to water shortages and a food crisis in 2008.

“We have resumed exports again,” Rachid told Reuters. “We are probably going to have anything between 600,000 to 800,000 tonnes of exports of rice this year, depending on the crop.”

“We are definitely seeing no less than 600,000 tonnes,” he said on the sidelines of the World Economic Forum in Davos, Switzerland.

Rachid said in September that Egypt had the capacity to export one million tonnes of rice a year but that it wanted to limit these exports to save water.

Egypt has a water supply of about 860 cubic metres per person a year, below the water poverty line of 1,000 cubic metres per person a year, with agriculture consuming more than 80 percent of that supply.

The Vision Foods

But Indian companies are showing interest in importing non-basmati variety rice from Indonesia, said Ghalib. “We are ready to export rice to India. But so far they have not approached us,” he said.

Earlier, there were reports that the Indian government has started communications with the Indonesian authorities regarding government-to-government sale of rice.

Rice production in Indonesia is likely to touch 66.8 million tonne this year, registering an increase of 4.45% than last year owing to expansion in the net cropped area. The production forecast will not only ensure Indonesia ‘s own demand but even make it surplus in rice in 2010. This has pushed Indonesia to increase export of rice from the country.

Although the Indonesian government is likely to tighten control over sales in the international market, it is ready to sell rice to India. According to the ministry of agriculture, India’s buffer stock of rice is stable and more than the required level. National rice stock was 22.9 million tonne on December 1, higher than the buffer stock requirement of 5.2 million tonne.

Meanwhile, India is reportedly looking at opportunities to import rice at rates lower than the domestic procurement price. It has chosen government-to-government channel for purchase of rice to ensure a lower price for the commodity.

India ‘s rice production last year was hit due to the drought like situation in several states which pushed up global rice prices. But the increase in kharif paddy production in Uttar Pradesh, and higher procurement in states like Haryana and Punjab have reduced chances of rice imports this year. The shortfall in kharif crop was anticipated to touch 13 million tonne in 2009, but with procurement looking up, the Indian government has stalled imports for now. “Indian companies have been importing rice from India on a case to case basis,” said Otto Riadi, counsellor at the Indonesian embassy in India . “There has been demand for non-basmati variety of rice. But Indian companies do not import regularly,” Riadi said. He was present at an interactive session organised by the Merchants’ Chamber of Commerce.

The Vision Foods

“There is no market operation so far. I heard the operation would be held in mid-January, ” Kholik, 28, a trader in Pasar Minggu, said.

Another trader, Andi, 35, concurred. “We just want the rice price to be stable.”

The Vision Foods

Minister Bandula Gunawardene said  that the price of the rice  is expected to come down  by  next week with the introduction of the new load of rice in to the market.  Accordingly  the government has taken steps  to import rice  and distribute islandwide.  The new load of rice  is expected to arrive in Colombo  next week.  Minister further said  once this new load of rice is arrived there will not be any shortage till April of this year.  Minister Gunawardena made these comments at a live discussion held toilitary rule since independence.  Sri Lankan public will never  support for a military rule in this country.

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On the demand side, exporters and strategic planners focusing on milled and semi-milled rice inThailand face a number of questions. Which countries are supplying milled and semi-milled rice toThailand? How important is Thailand  compared to others in terms of the entire global and regionalmarket? How much do the imports of milled and semi-milled rice vary from one country of originto another in Thailand? On the supply side, Thailand also exports milled and semi-milled rice.Which countries receive the most exports from Thailand? How are these exports concentratedacross buyers? What is the value of these exports and which countries are the largest buyers?

This report was created for strategic planners, international marketing executives and import/export managers who are concerned with the market for milled and semi-milled rice in Thailand. With the globalization of this market, managers can no longer be contented with a local view. Nor can managers be contented with out-of-date statistics which appear several years after the fact. I have developed a methodology, based on macroeconomic and trade models, to estimate the market for milled and semi-milled rice for those countries serving Thailand via exports, or supplying from Thailand via imports. It does so for the current year based on a variety of key historical indicators and econometric models.

In what follows, Chapter 2 begins by summarizing where Thailand fits into the world market for imported and exported milled and semi-milled rice. The total level of imports and exports on a worldwide basis, and those for Thailand in particular, is estimated using a model which aggregates across over 150 key country markets and projects these to the current year. From there, each country represents a percent of the world market. This market is served from a number of competitive countries of origin. Based on both demand- and supply-side dynamics, market shares by country of origin are then calculated across each country market destination. These shares lead to a volume of import and export values for each country and are aggregated to regional and world totals. In doing so, we are able to obtain maximum likelihood estimates of both the value of each market and the share that Thailand is likely to receive this year. From these figures, rankings are calculated to allow managers to prioritize Thailand compared to other major country markets. In this way, all the figures provided in this report are forecasts that can be combined with internal information sources for strategic planning purposes.

After the worldwide summary in Chapter 2 of both imports and exports of milled and semi-milled rice, Chapter 3 goes into detail on imports, but for each major country of origin serving Thailand. A “major” market is defined as a country where Thailand represents a substantially large share of either imports or exports. For each major country exporting to Thailand, one can thus observe how important Thailand is to that exporting country compared to other countries of the world. Chapter 4 does the same, but for exports of milled and semi-milled rice originating from Thailand, for each major country of destination. In doing so, one can discover the share that Thailand has in each major market; this share value is often used as a measure of competitiveness for Thailand. In all cases, the total dollar volume and percentage share values by major trading partner are provided.

Combined, Chapters 3 and 4 present a the total picture for imports and exports of milled and semi milled rice to and from Thailand to and from all other major countries in the world. “Milled and Semi-Milled Rice” as a category is defined in this report following the definition given by the United Nations Statistics Division Classification Registry using the Standard International Trade Classification, Revision 3 (SITC, Rev. 3). The SITC code that defined “milled and semi-milled rice” is 0423.  Read More

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Increases in acreage and production this season have significantly bumped supplies of U.S. medium-grain rice and is weighing on prices of the class of rice, despite good export numbers, according to Nathan Childs, senior rice market analyst, Economic Research Service, USDA.

Childs, speaking at the USA Rice Outlook Conference, in New Orleans, estimates that this year’s U.S. rice crop could end up being 7 percent larger than last year’s crop, most driven by area expansion, which is up 4 percent.

Yield for 2009 is projected 3 percent higher than last year, however, the full effects of late plantings and the heavy rainfall in October in the Delta won’t be known completely until the January crop production report, Childs said.

All of the increase in production over last year’s crop is in medium-grain rice, according to Childs. “Long grain production is actually projected down a little bit. Medium-grain area expanded both in California and the South, with Southern medium grain production more than doubling. If it weren’t for weather problems, the Southern medium grain acreage would probably have been even higher.”

Louisiana and Arkansas accounted for most of the medium-grain increase over 2008. Arkansas planted over 200,000 acres in medium-grain rice in 2009. On the downside, this has led to big supplies and ending stocks for medium-grain rice.

All-rice ending stocks are projected at 43 million hundredweight, the largest since 1986-87, “which was a year when we had extraordinarily low prices, probably around $4 to $5 a hundredweight,” Childs said. “The buildup is almost all in medium- and short-grain, which has about a 30 percent stocks-to-use ratio.”

Childs also stressed that “it’s very difficult to expand global trade of short- and medium-grain rice. Once Japan, Taiwan and Korea make their WTO commitments, they won’t purchase any more rice regardless of price. So it’s a small market.”

Childs says domestic rice consumption is expected to be a record in 2009-2010, “mostly driven by larger population. Per capita consumption is mostly flat, maybe rising a third of a pound. Medium-and short-grain rice will account for all of the expansion in consumption.”

U.S. rice exports are projected to increase by about 4 percent over last year, Childs said. December projections include a million hundredweight increase in exports from the previous month in medium- and short-grain rice.

Childs says medium-grain exports are a near-record due largely to a drought in Australia and export restrictions in Egypt. “So two major competitors are either out of the market or they are shipping very little rice. The United States is the only supplier of medium-grain rice into the global market. The other suppliers, like Europe, are way too high-cost.”

Childs says Egyptian rice producers “are facing severe water constraints, and its government is restricting exports to encourage more efficient use of water. Its long-term potential is unknown.”

Childs said the pace of long-grain exports has been lagging as of late, but added that the potential for sales of 120,000 tons of rice to Iraq could go a long way toward meeting export goals.

Increased rice sales are also expected into Mexico and Central America, the largest and most stable of U.S. export markets. Sales have also been picked up in Panama, a non-traditional buyer of U.S. rice. Turkey has also come into the market for U.S. rice.

U.S. imports continue to grow, but are not projected to be a record in 2009-2010. All the growth will in aromatic, long-grain rice, with Thailand supplying about 70 percent of U.S. imports. “India and Pakistan supply mostly Basmati rice. It’s very expensive rice, well over $1,000 a ton, probably three times U.S. prices. Long-term, we see imports increasing at a faster pace than the domestic market.”

One factor that has slowed domestic use in recent years is a very sharp drop in brewer’s use, which has declined by more than a third, according to Childs. “It’s gone from about 16 million to 17 million hundredweight on a rough basis, to under 10 million hundredweight. So far this year, through October, it’s a below a year earlier by about 10 percent.”

USDA data indicates big declines in 2009-2010 in short- and medium-grain rice prices, “down from $25 a hundredweight to under $18 a hundredweight. It doesn’t appear to be a steady decline. It’s mainly driven by big U.S. supplies. Global demand is not declining, but it’s hard for the medium- and short-grain market to expand a whole lot, with such a small number of buyers.”

Long-grain prices are expected to increase, “based on stronger world prices,” Childs said. “There are weather problems in India and the Philippines, and Thailand is holding 4 million to 5 million tons of rough rice off the market to support prices. It’s very unlikely that Thailand could carry over $600 ton without holding the rice. This policy started in the late summer of 2008, when prices started to decline. Thailand bought rice, held it, and continued that program in subsequent crops.”

For U.S. rice production in 2010-2011, Childs projects higher production costs and a slight area reduction, due primarily to large medium-grain supplies. “We see a higher yield trend, in the absence of weather problems. We see a large carryin, increasing imports and little change in production. We see larger total supplies, a 1 percent increase in consumption, a small export expansion, mostly in the traditional markets, another buildup in stocks and weaker U.S. and global prices.”