Agri Overview Introduction to Rice H

Rice Oryza Sativa L. a member of the grass family, along with wheat and corn, is one of the three crops on which the human species largely subsists. Rice is now one of the most important crops at the global level, as it is used as a staple food in most countries of the world and will continue to be for the foreseeable feature. Rice is intimately involved in the culture as well as the food ways and economy of many societies. Indica type rice feeds more than two billion people, predominantly in developing countries. In the coming 30 years, the world will require 70% more rice than that it requires today. According to conservative estimates, 800 million tons of rice will have to be grown with considerate reduction in the input of agrochemical under sustainable conditions. It has been estimated that half the world's population subsists wholly or partially on rice. Ninety percent of the world crop is grown and consumed in Asia. American consumption, although increasing, is still only about 11 kg per person annually, as compared with 90181 kg per person in parts of Asia. World Production and Trade According to FAOs latest forecast, world production in 2004/05 may have reached 606 MT of paddy rice (405 in white equivalent), against 585 MT in the last year up by 3.5%. As a result of this increased production, world rice trade is estimated at 25.9 MT, against 27 MT in 2004. Production grew mainly in China, where prices recovery and large utilization of hybrid varieties have contributed to boost supply. In the rest of the world, production also raised due to the expansion of rice areas and higher yields. For 2005/06, it is expected another increase, to 615 MT. Nevertheless, supply is still not enough when compared to consumption needs (414 MT in white equivalent). It will lead to a new fall in world stocks, from 97 MT in the year before to 95 MT, the lowest level since 1982. Economic Importance of Rice for Pakistan Rice is the second most important crop which brings economic prosperity of the growers as well as earns billions of rupees through its export for country. Pakistani fine rice commonly known as Basmati is world famous and enjoys monopoly in the international market, due to its quality characteristics, strong aroma, slender and long kernel, gelatinization, temperature and high degree of grain elongation on cooking. However, the grain yield of basmati rice varieties is very low. In order to remain in the International market, we have to further improve the quality as well as yield of basmati varieties. Rice

plays a pivotal role in the agro-based and occupies a prominent position in agricultural economy of Pakistan. Rice is a high valued cash crop and is also a major export item. It accounts for 5.7 percent of the total value added in agriculture and 1.3 percent to GDP. Production of rice during 2004-05 is provisionally estimated at 4991 thousand tons, which is 2.9 percent higher than last year. Rice was cultivated on an area of 2503 thousand hectares, showing an increase of 1.7 percent over last year. The higher production is due to favourable weather condition. Area, Production and Yield of Rice

Year Area Production Yield

Area, Production and Yield of Rice Area Production (000 % (000 % Year Hectare Tons) Change Change 00- 2377 -5.5 4803 -6.8 01 2114 -11.1 3882 -19.2 015.2 4478 15.3 02 2225 02- 2461 03 2503 0304 10.6 1.7 4848 8.3 4991 2.9

Yield (Kgs/Hec.) % Change -1.4 -9.1 0.6 -2.1 1.2

2021 1836 2013 1970 1994

0405 (P) P: Provisional. (July-March) Source: Ministry of Food, Agriculture and Livestock. Federal Bureau of Statistics. Major Producing Areas Major producing areas include Gujranwala, Hafizabad, Sheikhupura, Sialkot, Jhang & Okara of Punjab and Larkana, Jacobabad, Shikarpur, Badin, Dadu & Thatta districts of Sindh. Main Varieties In Pakistan, rice is mainly grown in the Sindh and Punjab. The Sindh is specialized in producing the Long grain white rice IRRI-6 and IRRI-9, while Punjab is producing world class Basmati rice among IRRI-9 and other varieties. Punjab is the biggest producer of rice in the country and contributes 58 per cent to national production while the provinces of Sindh, Balochistan and NWFP to 29, 3 and 10 per cent, respectively. Some of the important varieties grown in the country are Super Basmati, Kernel Basmati, Basmati 385, IRRI-6, IRRI-9, KS-282, DR-82 and DR-83. All rice is irrigated and mainly transplanted. On an average, each household in Pakistan spends about 3.8 percent of its total food expenditure on rice and rice flour. It is the second staple food and contributes more than 2 million tons to Pakistan's national food requirement. Rice Export

Like India, Pakistan exports both high-quality Basmati rice which sells at a substantial premium in high-income markets as well as intermediate and low quality non-aromatic long grain milled rice to developing countries, mostly in East Africa where it competes with China and Vietnam, and in South Asia. Pakistans Basmati rice typically sells at a lower price than Indias Basmati. For all rice, Sub-Saharan Africa, Afghanistan, Bangladesh, Indonesia, Middle East and the EU are leading export markets for Pakistan. Rice exports reached record US$ 932.3 million, showing an extraordinary increase of US$ 297.8 million (46.9 percent) during FY 05 despite a fall in unit values. Export values of basmati rice and other varieties stood at US$ 439 and US$ 493.6 respectively.

Benefits of Rice Futures Contract Futures Contract of Rice would provide hedging platform for the following market participants. Progressive Growers Millers Manufacturers of Value Added Products Traders Exporters Investor Rice futures price is important to farmers, millers, exporters. All groups can use futures price or price discovery as information to direct their businesses or to manage their risk. In addition, exporters can use futures exchange as hedging tools to manage their risk. They can buy rice futures contract and sell futures contract before the first delivery notice day called "offset", then the exporters take profit or loss from contract price difference. If they buy high and sell higher, they will gain from buying futures contract. In contrast, they buy high and sell low, they will lose from buying futures contract. In cash market, exporters can buy or sell rice futures contract in which they may take profit or lose as well. Fortunately, they gain in futures exchange but lose in cash market. And the gain covers their losses, so they will take profit. Benefits to Industry from Futures trading. Hedging the price risk associated with futures contractual commitments. Spaced out purchases possible rather than large cash purchases and its storage. Efficient price discovery prevents seasonal price volatility.

Greater flexibility, certainty and transparency in procuring commodities would aid bank lending. Facilitate informed lending. Hedged positions of producers and processors would reduce the risk of default faced by banks. * Lending for agricultural sector would go up with greater transparency in pricing and storage. Commodity Exchanges to act as distribution network to retail agri-finance from Banks to rural households. Provide trading limit finance to Traders in commodities Exchanges. Benefits to Exchange Member Access to a huge potential market much greater than the securities and cash market in commodities. Robust, scalable, state-of-art technology deployment. Member can trade in multiple commodities from a single point, on real time basis. Traders would be trained to be Rural Advisors and Commodity Specialists and through them multiple rural needs would be met, like bank credit, information dissemination, etc.

Executive Summary Introduction It is the mission of Visigoth Imports to provide complete import/export brokerage services including purchase contracts, shipping, warehousing, and delivery scheduling. The company will concentrate on special and cultural imports from Germany and Scandinavia to the unique Bavarian town of Leavenworth, WA Visigoth also plans to provide trade consultation services to newly started farms created under the Puget Consumers. Co-op's Farmland Fund initiative. The Company Visigoth Imports will be a limited liability partnership registered in the state of Delaware for tax purposes. Its founder is Mr. Frank Curtiss, a former master distributor with Fisher-Mills. Mr. Curtiss has brought together a highly respected group of individuals who are well versed in foreign trade processes. The company has a limited number of private investors and does not plan to go public. The company has its main offices in Wenatchee, Washington. The facilities include

conference rooms and office spaces. The company expects to begin offering its services in June. The Services Visigoth offers complete import/export brokerage services plus inventory consulting services. As mentioned previously, this includes the following:

Supplier/buyer identification Purchasing, contracting and consulting Shipping Warehousing Delivery

It must be noted that Visigoth does not posess any warehousing facilities and intends to outsource this particular service. We expect to earn revenues by charging a commission based on the value of goods moved per order. The Market Visigoth will be concentrating on servicing just two types of clients, the gift shops of Leavenworth, Washington, and the farmers of the Puget Consumers Co-op (PCC). For both market segments, we have secured exclusive contracts or endorsements putting us in a unique position to service these niche firms and their needs. Profitability in these two markets is expected to be excellent, especially in the import section as Leavenworth draws in over a million tourists each year. We expect profitability in the co-op end to be much slower in the first five years of operation, but it too will increase steadily. Financial Considerations Start-up assets required include expenses and cash needed to support operations until revenues reach an acceptable level. Most of the company's liabilities will come from outside private investors and management investment, however, we have obtained current borrowing from Bank of America Commercial Investments, the principal to be paid off in two years. A long-term loan through Charter Bank of Nieurich will be paid off in ten years. The company expects to reach profitability in year 2 and does not anticipate any serious cash flow problems. We expect that about 3,500 units per month will guarantee a breakeven point.

Need actual charts? We recommend using LivePlan as the easiest way to create graphs for your own business plan. Create your own business plan 1.1 Mission It is the mission of Visigoth Imports to provide complete import/export consultation and brokerage services including purchase contracts, shipping, warehousing, and delivery. The company will concentrate on special and cultural imports from Germany and Scandinavia to the unique Bavarian town of Leavenworth, WA. Visigoth also plans to export apples and other produce by newly started farms created under the Puget Consumers Co-op's Farmland Fund initiative. It is our long-term goal to become the preferred import company for the unique tourist town of Leavenworth. Visigoth understands that the import shops and restaurants in Leavenworth have special needs of most unique gifts for the million tourists that visit the town annually. Visigoth Imports also understands that the newly launched farms of the PCC farmland fund initiative also have higher costs than most competitors and will need to export their produce at a cost that provides sufficient profit. Visigoth Imports has a combined 35 years of experience working in the import/export business. Our philosophy is in creating a long-term relationship with clients so that the delivery of their products becomes a seamless experience that promotes loyalty. 1.2 Keys to Success Visigoth Imports' keys to long-term and profitability are as follows:

Differentiate our services to our niche clients so that they realize that we are better able to serve their needs than a more generic competitor. Keeping close contact with clients and establishing a well functioning long-term relationship with them to generate repeat business and create a top notch reputation. Establish a comprehensive service experience for our clients that includes consultation, product/client search, purchasing contracts, warehousing, shipping, delivery, and follow up service analysis.

1.3 Objectives The three year goals for Visigoth Imports are the following:

Achieve break-even by year 2. Retain our long-term contracts with local import shops in Leavenworth, WA, through excellent customer service. Become the premier importer of German and Scandinavian specialty products in Leavenworth, and become the prime exporter of apples and other produce for the farmers of the PCC Farmland Fund 1 2 initiative.