Rice Rallies to Highest in Over Nine Months as India to Import

By Luzi Ann Javier

Nov. 2 (Bloomberg) -- Rice advanced for a fifth straight day to the highest in more than nine months as India, the world’s second-largest rice grower, returns to the import market and cyclones reduce production in the Philippines.

India’s state-owned PEC Ltd. and MMTC Ltd. are seeking 10,000 metric tons each for delivery during November and December. State Trading Corp. will seek a similar amount, a government official, who didn’t want to be identified before the bids are called, said Oct. 30. That will be the first imports since the 2005-2006 marketing year, according to U.S. Department of Agriculture data.

Rice has “its own individual fundamentals, particularly the issues that we’re seeing out of Southeast Asia and the talk that India is looking to buy rice,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney said by phone today. “That’s supporting that particularly market,” as other grains declined, he said.

Rice for January delivery added as much as 0.8 percent to $14.805 per 100 pounds in after-hour electronic trading, after jumping 7.3 percent last week, the biggest such gain for the most-active contract since the week ended March 20. The futures were at $14.79 per 100 pounds, up 0.7 percent at 1:39 p.m. Singapore time.

India, the world’s second-largest rice consumer, may import as much as 3 million tons next year, making it a net importer for the first time in 21 years, and potentially sparking the kind of “panic” that sent prices to records in 2008, Samarendu Mohanty, senior economist at the International Rice Research Institute, said Oct. 28.

Loss Estimates

The Philippines, the world’s biggest rice importer, was battered by typhoon Mirinae over the weekend after the government raised its estimate on losses from two recent storms to about 1 million tons, from about 800,000 tons earlier, widening the nation’s shortfall.

Some rice crops in southern Luzon in the Philippines were damaged by Typhoon Mirinae, Frisco Malabanan, national hybrid rice program director, said Oct. 31. The nation’s top rice producing regions were spared by the typhoon, he said.

Corn and wheat fell for a second day as warmer weather in the U.S. improved the production outlook for the largest exporter of the crops and after a stronger dollar damped demand for U.S. supplies.

Above normal temperatures and below-normal rain is expected in major corn and soybean producing regions in the U.S. including Iowa, Illinois, Indiana and Nebraska through Nov. 15, the National Weather Service said in a Nov. 1 forecast.

Corn, Soybeans

“We’ve got an improved outlook across the U.S. for corn and soybean harvest, which incidentally means we’ll also have expectations that planting progress of winter wheat will also pick up,” Mathews said.

Corn for December delivery lost as much as 1.8 percent, to $3.5925 a bushel in after-hours electronic trading on the Chicago Board of Trade, after closing 3.6 percent lower on Oct. 30. The most-active contract was at $3.64 a bushel at 2:14 p.m. Singapore time.

Wheat for December delivery fell as much as 1.3 percent, to $4.8775 a bushel, before trading at $4.9325 a bushel. The contract closed 1.9 percent lower on Oct. 30.

The Dollar Index, which tracks the value of the greenback against the currencies of six major U.S. trading partners, added 0.1 percent to 76.399, before declining to 76.123. The gauge rose 0.5 percent to 76.3 on Oct. 30.

January-delivery soybeans added 0.3 percent to $9.79 a bushel at 2:17 p.m. Singapore time, after declining as much as 1.4 percent earlier.

Eighteen out of 32 traders and analysts surveyed by Bloomberg news from Tokyo to Chicago said soybean prices may rise this week on speculation the USDA may lower its crop estimate next week after rain and freezing weather in October hurt yields.

The USDA on Oct. 9 raised its U.S. soybean production forecast to a record 3.25 billion bushels in the year that began Sept. 1, from its month-earlier estimate of 3.245 billion bushels.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net