Issue Date: 26/08/2011

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Report Date: 26/08/2011

Introduction
Welcome to the new Live Rice Index Report produced by Jackson Son & Co (London) Ltd. This report will be published weekly and will include market commentary and our weekly price assessments. We are also developing a new website that will be available soon. We expect it to become a valuable resource for up to date information and historical data, catering to all sectors of the industry from farmers to the point of sale. All our price assessments will be determined in line with the LRI Methodology with particular attention to those that we have chosen to be benchmarks, marked with this symbol: B For more information on our benchmarks and assessment principles please refer to our methodology statement available on our new web site: www.livericeindex.com

We want to encourage you to take an active role in the price assessment process and help us to ensure that the price assessments become increasingly accurate and robust. Have your say. Dont be left out. You can call us or email us with the information that you would like us to take into account. We will continue to develop our list of price assessments and our methodology, listening carefully to the participants in the rice industry in order to keep them relevant to the international rice market. Updates will be published in our report and on our website. We hope that this will become a useful and reliable resource for the industry.

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Live Rice Index

THAILAND - LONG GRAIN WHITE RICE
100% Grade B 5% Broken 10% Broken
B B

Report Date: 26/08/2011

CHANGE -15 -15 -15 -15 -5 0 CHANGE -10 -5 -10 -10 CHANGE -35 10 55 CHANGE -35 -5 -70 CHANGE 0 0 -5 10 0 CHANGE -10 -

PRICE $585 $565 $560 $555 $540 $485 PRICE $610 $600 $605 $595 PRICE $1,015 n/a $540 $840 PRICE $935 $1,120 $795 PRICE $570 $565 $550 $540 $465 PRICE $700 n/a

PAKISTAN - LONG GRAIN WHITE RICE

IRRI-6 5% Broken IRRI-6 10% Broken IRRI-6 15% Broken IRRI-6 25% Broken 386 2% Broken Broken Rice
B

CHANGE 0 0 0 -10 0 CHANGE 0 0 CHANGE 0 0 0 CHANGE CHANGE CHANGE 0 0 0 0 0 0 0 0

PRICE $520 $515 $510 $460 n/a $445 PRICE $545 $535 n/a PRICE n/a n/a $1,060 $1,075 PRICE n/a n/a n/a n/a n/a PRICE n/a n/a PRICE $1,145 $1,015 $1,015 $1,015 $965 $975 $1,210 $1,035

U.S.A. - GULF LONG GRAIN RICE

U.S. #2, 4% Broken, Hard Milled U.S. #3, 15% Broken, Hard Milled U.S. #5, 20% Broken, Hard Milled U.S. #1, Parboiled Milled 4% Broken U.S. #2, Paddy, 55/70 Yield (ex-spout) Southern Flour Quality Broken Rice Southern Pet Food Quality Broken Rice

CHANGE 22 22 22 25 20 0 0 CHANGE 0 0 CHANGE 5 10 10 0 CHANGE 5 25 CHANGE -15

PRICE $627 $600 $567 $660 $350 $375 $330 PRICE $875 $550 PRICE $575 $580 $580 $430 PRICE $565 $575 PRICE n/a n/a n/a n/a $470

15% Broken 25% Broken A1 Super Broken

THAILAND - LONG GRAIN PARBOILED RICE

Parboiled Milled Rice 100% STX Parboiled Milled Rice 100% Parboiled Milled Rice 5% STX Parboiled Milled Rice 5%
B

PAKISTAN - LONG GRAIN PARBOILED RICE

IRRI-6 Parboiled Milled Rice 5% Broken STX IRRI-6 Parboiled Milled Rice 15% Broken STX IRRI-9 Parboiled Milled Rice 5% Broken

U.S.A - CALIFORNIAN MEDIUM GRAIN RICE

U.S. #1, 4% Broken U.S. #1 Paddy, 58/69 Yield

PAKISTAN - BASMATI RICE

THAILAND - LONG GRAIN FRAGRANT RICE

Hom Mali White Rice 100% Grade B New Hom Mali White Rice 100% Grade B Old Hom Mali White Rice A1 Super Pathumthani Fragrant 100% Grade B
B

385 Long Grain White Basmati Rice 2% D-98 Long Grain White Basmati Rice 2% Super Kernel White Basmati Rice 2% Super Kernel Parboiled Milled Basmati Rice 2%

S. AMERICA - LONG GRAIN WHITE RICE (FOB FCL)

Uruguayan 5% Broken Argentine 5% Broken Brazilian 5% Broken Brazilian Broken Rice (1/2 Grain Brokens)

INDIA - LONG GRAIN WHITE RICE

IR 64 5% Broken IR 64 25% Broken PR 106 5% Broken PR 106 25% Broken 1001 / PANT 4 25% Broken

THAILAND - LONG GRAIN GLUTINOUS RICE

White Glutinous Rice 10% Broken White Glutinous Rice 10% Broken (Sanpathong) White Glutinous Broken Rice A1 5% Broken 10% Broken 15% Broken 25% Broken Broken Rice

S. AMERICA - LONG GRAIN PARBOILED RICE (FOB FCL)

Brazilian Parboiled Milled Rice 5% Broken STX Uruguayan Parboiled Milled Rice 5% Broken STX

VIETNAM - LONG GRAIN WHITE RICE

B

INDIA - LONG GRAIN PARBOILED RICE

IR 64 Parboiled Milled Rice 5% STX PR 106 Parboiled Milled Rice 5% STX

EGYPT - WHITE RICE

INDIA - BASMATI RICE

VIETNAM - LONG GRAIN FRAGRANT RICE

Fragrant Rice 5% Broken New Fragrant Rice 5% Broken Old

Traditional White Basmati Rice 2% Traditional Brown Basmati Rice 2% Traditional Parboiled Milled Basmati Rice 2% Pusa White Basmati Rice 2% Pusa Brown Basmati Rice 2% Pusa Parboiled Milled Basmati Rice 2% 1121 White Basmati Rice 2% 1121 Parboiled Milled Basmati Rice 2%

Medium Grain #2 6% Broken Medium Grain #3 12% Broken Round Grain #2 6% Broken Round Grain #3 12% Broken Broken Rice Grade 0

= INDICATES BENCHMARK

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Thailand
It comes as no surprise that prices have continued to rise in Thailand this week. At its peak,Thai 100% B was offered at US $615 PMT on an FOB basis whilst parboiled rice 100% sortexed climbed as high as US $640 PMT. The prices have softened as we approach the end of the week, with 100% B now offered at US $585 PMT, which provides a clear indication of how volatile this market is. The imminent Government rice mortgage scheme is the main factor offering support for market prices. Much uncertainty still surrounds the scheme, not least when it will be implemented; most observers believe that the scheme will be put in place in November whilst there is some speculation that the scheme will be in effect by mid-to-late October. There is still no mortgage-price guaranteed for either Pathum Thani fragrant or Glutinous varieties of rice, however, we believe that the Government may set the price for glutinous paddy at around 16,000 to 18,000 Thai Baht PMT. The Government has revealed that they will sell subsidised lower grade white rice under their Blue Flag stores. This will ensure that the public is not so drastically affected by the rise in domestic rice prices. Bulog, the Indonesian State Purchasing Agency, have confirmed the purchase 300,000 MTS of Thai new crop 15% broken white rice at a price of around US $560 PMT basis CFR. The shipment period will be September to December 2011. As is typical, the Public Warehouse Organisation (PWO) has completed the sale and are now approaching Thai exporters for support. However, the selling price has come as something of a shock and it remains to be seen whether the PWO will struggle to cover this order.

Report Date: 26/08/2011

THAILAND - LONG GRAIN WHITE RICE

100% Grade B 5% Broken 10% Broken
B B

CHANGE -15 -15 -15 -15 -5 0 CHANGE -10 -5 -10 -10 CHANGE -35 10 55 CHANGE -35 -5 -70

PRICE $585 $565 $560 $555 $540 $485 PRICE $610 $600 $605 $595 PRICE $1,015 n/a $540 $840 PRICE $935 $1,120 $795

15% Broken 25% Broken A1 Super Broken

THAILAND - LONG GRAIN PARBOILED RICE

Parboiled Milled Rice 100% STX Parboiled Milled Rice 100% Parboiled Milled Rice 5% STX Parboiled Milled Rice 5%
B

Export Statistics:
Unofficial Thai rice exports from the 9th of August to the 14th of August 2011 were 123,362 MTS, excluding fragrant rice. This represents a decrease of 7,827 MTS from the previous week. Exports of white and glutinous rice from 1st of January to the 14th of August 2011 totalled 6,199,835 MTS. This is an increase of 73.1% from the same period last year. Source: Thai Rice Exporters.

THAILAND - LONG GRAIN FRAGRANT RICE

Hom Mali White Rice 100% Grade B New Hom Mali White Rice 100% Grade B Old Hom Mali White Rice A1 Super Pathumthani Fragrant 100% Grade B
B

THAILAND - LONG GRAIN GLUTINOUS RICE

White Glutinous Rice 10% Broken White Glutinous Rice 10% Broken (Sanpathong) White Glutinous Broken Rice A1

CURRENCY 1 USD $ INVERSE

THB 30.01 0.033

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Vietnam
Reports that VinaFood 2 had agreed the sale of 300,000 MTS of 15% broken white rice to Bulog were wide of the mark. In fact, both of these State agencies have since announced that this sale has not been completed, presumably in an attempt to calm the market. However, it is felt that negotiations may be ongoing. Indeed, the market is extremely tight and as the summerautumn harvest comes to an end, there is an unusually low volume of rice available in the market. It seems that an unprecedented amount of paddy may be in the hands of speculators, anticipating higher prices later in the year. As a consequence there has been very little rice offered for export and sales have been slow. Paddy prices have continued to rise sharply and exporters have had some trouble covering their orders which has led to some renegotiations and, ultimately, some defaults. The Government has threatened to release up to 1 million MTS of Government stockpiles in an attempt to ease the tight supply situation. Some Vietnamese exporters have taken issue with the Governments new requirements for rice exporters under Decree 109. The Decree requires that Vietnamese rice exporters have at least one warehouse with a minimum storage capacity of 5,000 MTS of paddy located within the province from which the rice will be exported as well as having at least one mill that meets the production requirements. Many anticipate that this will eliminate weak enterprises and reduce the number of Vietnamese rice exporters to around 50 companies but there are a number of successful export companies that do not own warehouses or mills.

Pakistan
The market in Pakistan is understandably quiet. In addition to the shortage of rice in the market, ahead of any significant new crop arrivals, it is the final week of Ramadan and the rice mills are all closing up ahead of the Eid festivities the following week. For all extensive purposes we can expect the market to be closed until September 5th. The early arrivals from the Punjab region have slowed to a halt and anything that did come in was only small in volume with relatively high moisture. Before the market quietened down, there was some discounting for new crop seen as some exporters are wary of Indias expected resumption of nonBasmati exports. We can expect the market to pick up dramatically once it re-opens after the holidays as the harvest restarts and demand for the new crop gathers momentum. There is still some uncertainty regarding the extent of damage caused by the latest floods in Lower Sindh. Some reports suggest that more than 200,000 acres have been lost in the floods so far and that the problems may continue as the irrigation systems have been damaged and some paddy has been attacked by disease.
IRRI-6 5% Broken IRRI-6 10% Broken IRRI-6 15% Broken IRRI-6 25% Broken 386 2% Broken Broken Rice

Report Date: 26/08/2011

PAKISTAN - LONG GRAIN WHITE RICE

B

CHANGE 0 0 0 -10 0 CHANGE 0 0 CHANGE 0 0 0

PRICE $520 $515 $510 $460 n/a $445 PRICE $545 $535 n/a PRICE n/a n/a $1,060 $1,075

PAKISTAN - LONG GRAIN PARBOILED RICE

IRRI-6 Parboiled Milled Rice 5% Broken STX IRRI-6 Parboiled Milled Rice 15% Broken STX IRRI-9 Parboiled Milled Rice 5% Broken

PAKISTAN - BASMATI RICE

385 Long Grain White Basmati Rice 2% D-98 Long Grain White Basmati Rice 2% Super Kernel White Basmati Rice 2% Super Kernel Parboiled Milled Basmati Rice 2%

Export Statistics:
From the 1st of January to the 18th of August 2011, Vietnam shipped 4.878 million MTS. Shipments from the 1st of August to the 18th of August 2011 reached 257,715 MTS. Source: VFA

CURRENCY 1 USD $ INVERSE

PKR 86.88 0.0115

CURRENCY 1 USD $ INVERSE

VND 20,830.00 0.000048

VIETNAM - LONG GRAIN WHITE RICE

5% Broken 10% Broken 15% Broken 25% Broken Broken Rice
B

CHANGE 0 0 -5 10 0 CHANGE -10 |

PRICE $570 $565 $550 $540 $465 PRICE $700 n/a

VIETNAM - LONG GRAIN FRAGRANT RICE

Fragrant Rice 5% Broken New Fragrant Rice 5% Broken Old

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USA
The undertone of the market in the South remains strong, driven by a significantly reduced acreage and the U.S. futures market. The Farm Service Agency (FSA) has published an updated acreage report which estimates that US long grain certified acreage is down by a further 6% from the National Agricultural Statistics Service (NASS) Information Survey in June. This is only an estimate by the Agency and is subject to revisions come September 15th. If indeed the acreage is even smaller than previously anticipated, this is likely to provide more fuel for the futures, further increasing the gap between sellers and buyers price ideas. One positive factor is that the field and milling yields appear to be much better than last year. The harvest has finally begun in the mid-South where planting was heavily delayed by adverse weather conditions. Early reports of yield in the mid-South are positive as well, as they have been in both Texas and Louisiana, where the hot temperature does not appear to have negatively affected the crop as much as first feared. Due to the delays in planting in the midSouth, the harvest in Texas and Louisiana is much more advanced with 55% and 40% of rice harvested respectively. The Kansas City Commodity Office have invited bids in their upcoming tender for a total of 6,470 MTS of #5/20 Long Grain, wellmilled rice, packed in 50kg bags. Bids are due by the 7th of September. The latest Korean tenders have, so far, not proven successful for Californian exporters. In the initial tenders held this month, U.S. bids were above the ceiling price which meant that the business was not confirmed. We are still awaiting the results of the latest series of tenders but it remains to be seen whether Californian rice will be any more competitive. In contrast to the long grain situation, the latest FSA estimates suggest that medium grain rice has been planted on 832,000 acres which represents an increase of 2.6% from the latest NASS figures. This and the news from Egypt regarding the upcoming crop are the latest bearish factors for the Californian market.

Report Date: 26/08/2011

U.S.A. - GULF LONG GRAIN RICE

U.S. #2, 4% Broken, Hard Milled U.S. #3, 15% Broken, Hard Milled U.S. #5, 20% Broken, Hard Milled U.S. #1, Parboiled Milled 4% Broken U.S. #2, Paddy, 55/70 Yield (ex-spout) Southern Flour Quality Broken Rice Southern Pet Food Quality Broken Rice

CHANGE 22 22 22 25 20 0 0 CHANGE 0 0

PRICE $627 $600 $567 $660 $350 $375 $330 PRICE $875 $550

U.S.A - CALIFORNIAN MEDIUM GRAIN RICE

U.S. #1, 4% Broken U.S. #1 Paddy, 58/69 Yield

Export Statistics:
Net sales for the period of 12th 18th og August reached of 62,900 MTS. Major buyers were: Mexico Unknown destinations Guinea-Conakry Liberia Canada 37,400 MTS 6,000 MTS 5,900 MTS 4,500 MTS 2,900 MTS

Exports for the same period reached 37,600 MTS and were mainly to: South Korea Mexico Honduras Guatemala Leeward and Windward Is. Source: USDA
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8,900 MTS 7,200 MTS 4,700 MTS 3,900 MTS 3,000 MTS

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South America
Last week we reported that Iraq had purchased 60,000 MTS of South American white rice. In fact, it transpires that the Iraqi Grain Board only purchased 30,000 MTS of Uruguayan rice, although the seller may have the option for Argentine rice. Purchase prices ranged from US $650 PMT to US $670 PMT basis CIF Iraqi Port. Consequently, the market in Uruguay is firm and the mills are booked through into October. Brazil still continues to export at an impressive rate with parboiled sales into West Africa particularly strong. Under the PEP programme, the Brazilian Government will tender 70.000 MTS worth of premiums for the Brazilian millers and exporters. Venezuelas plans to import rice from Brazil and Argentina are finally under way with a vessel loading at each origin last week. It is unclear what volume of rice stocks Venezuela currently holds, but it appears that they will require further imports this year.

India
CHANGE 5 10 10 0 CHANGE 5 25 PRICE $575 $580 $580 $430 PRICE $565 $575

Report Date: 26/08/2011

S. AMERICA - LONG GRAIN WHITE RICE (FOB FCL)

Uruguayan 5% Broken Argentine 5% Broken Brazilian 5% Broken Brazilian Broken Rice (1/2 Grain Brokens)

S. AMERICA - LONG GRAIN PARBOILED RICE (FOB FCL)

Brazilian Parboiled Milled Rice 5% Broken STX Uruguayan Parboiled Milled Rice 5% Broken STX

CURRENCY 1 USD $

BRL 1.610

ARS 4.183

UYU 18.5

The wait continues as no decision has been made regarding Indian export ban. In the latest development, Indias Supreme Court has announced that they will not rule on the special petition of the Indian Central Government to lift the Delhi High Courts ban on the export of non-Basmati rice. The current hearing is set for the 7th of September with the Delhi High Court; however the Supreme Court has urged the Delhi High Court to bring the hearing forward to the 29th of August. The bench stated we are of the view that ends of justice will be adequately served by requesting the high court to take up writ petition (Civil) no.5237 of 2011 and all connected matters on priority basis, hear the same on the 29th of August and make an endeavour to dispose of the matters as early as possible. The legal case arose when, on the 7th of July, the Government awarded 82 export licenses to private entities, some rice exporters immediately filed lawsuits to the Delhi High Court claiming the selection process was irrational. With about 104 million MTS of new rice crop on its way and storage facilities already overflowing, farmers are pushing for answers of how to store the new crop.

INDIA - BASMATI RICE

CHANGE 0 0 0 0 0 0 0 0

PRICE $1,145 $1,015 $1,015 $1,015 $965 $975 $1,210 $1,035

Traditional White Basmati Rice 2% Traditional Brown Basmati Rice 2% Traditional Parboiled Milled Basmati Rice 2% Pusa White Basmati Rice 2% Pusa Brown Basmati Rice 2% Pusa Parboiled Milled Basmati Rice 2% 1121 White Basmati Rice 2% 1121 Parboiled Milled Basmati Rice 2%

CURRENCY 1 USD $ INVERSE

INR 46.041 0.0217

Indian officials say they are not worried about monsoon rains on a national level after many regions received either above or below average rainfall. Across the whole nation, rainfall was 8% below the average this week; however, this follows last week, where rains were 26% above average. The rain in Andhra Pradesh was 300% above average, whilst Orissa and West Bengal saw averages of 30% - 50% below normal. The Government say they are not worried as evenly dispersed rain is what is most important for crops.

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The Rest Of The World

Egypt
The harvest of the Egyptian new crop is about to start. After the political turmoil seen earlier this year, farmers are understood to have paid little attention to the Governments message to reduce planting of rice and a very significant increase in production is expected. Many believe that this will lead to an exportable surplus of as much as 600,000 MTS. Currently the export ban is still in place, with the only exception being for broken rice. The Egyptian government are likely to look after their own needs first before considering exports.

Report Date: 26/08/2011

Sri Lanka
The Sri Lankan government have released a plan to deal with the expected surplus of rice this year, which is estimated to grow from 2.4 million tons to 2.9 million tons by encouraging workshops for bakers to use rice flour instead of wheat. With the current facilities farmers are unable to store their rice and have to sell their produce at an unreasonable price. The Sri Lankan government are currently investigating alternative storage options which could help stop the 1520% of rice which perishes due to poor storage facilities.

Myanmar
Myanmar and Bangladesh seek to increase trade of parboiled rice by 4 times the current amount of 250 tons per month to over 1000 tons per month. Myanmar this year is predicted to export 800,000 tons of rice, while Bangladesh this year is expected to import only 550,000 tons; half the amount in 2010-2011.

Ghana & Africa

In Ghana, rice production is expected to grow by 5% to 310,000 MTS and rice imports are expected to grow by 3% to 330,000 MTS. Imported rice is preferred by urban consumers with only 20% of their consumption being produced domestically, the remaining locally produced rice is consumed in rural areas. In 2010 the government restored the 20% duty on rice to encourage domestic production, in hopes of saving money. In their latest tender,or up to 6,000 MTS of white rice, Mauritius has bought 2,000 MTS at US $524 PMT from Pakistan. Japan and Vietnam have given financial support to Mozambique and are set to invest US $4 million in an effort to increase rice production in the Zambezia province. Their investment covers the provision of quality seed in an effort to increase production per hectare and agricultural research to explore available land.

Cambodia Indonesia
Vinafood 2 Vietnams top rice exporter and Bulog have announced that the deal of 300,000 MTS of rice was not completed, presumably in an effort to calm the market. Bulog have now purchased 300,000 MTS of 15% broken new crop white rice from Thailand from the Public Warehouse Organisation, the shipment period will be from September to December at a cost of about US$560 PMT on a CFR basis. The market in Cambodia has continued to strengthen in line with the neighbouring Thai and Vietnamese markets. Demand has been strong and the supply of paddy is quite thin. Chinais state owned rice import companies and Cambodian rice exporters have signed agreements for the export of 200,000 MTS of Cambodian rice per annum. Chinas Sinograin has indicated that they will buy more rice if shipments go to plan.

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Report Date: 26/08/2011

Offering A Grain Of Truth...

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