Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: Central

Rice federation continues to push exports

BRINKLEY, Ark. — Rice consumption continues to outpace production and prices are strengthening on tight global supplies.

“This is good for U.S. rice. We should be more competitive in both price and supply,” said Betsy Ward, USA Rice vice president for promotion. “We have a record crop to export. There has been some progress on the trade policy front, but I must say we still face major market access barriers.”

Despite these challenges — “or because of the challenges — I believe we need to redouble our efforts on promotion and market openings, but also in keeping the markets we have,” said Ward, who spoke at the Arkansas Rice Council’s annual meeting. “We’re in danger, in some areas, of losing some key markets. This is why the checkoff dollars we get from Arkansas are so important — we couldn’t do what we need without that money.”

Key regions/countries In any given year, the Unites States exports between 40 and 60 percent of its rice crop. This year, USDA estimates exports will be at 46 percent. “The Western Hemisphere is our major market with 59 percent of our exports going there. In value terms, 50 percent of all U.S. rice goes to Latin America.” This is quite a shift from 1999, when the region took less than 30 percent. “Latin America is now a major market… In the first 11 months of 2004, (Latin America) imported 1.8 million metric tons of U.S. rice valued at around $500 million.” Ward pointed out how some key importers of U.S. rice are faring. Among them:

• Mexico. In five years, U.S. rice exports to Mexico have doubled in volume. “Future growth potential is excellent. There are 105 million people in Mexico. Population is expected to grow to 120 million by 2010. All this is happening in a market where per capita rice consumption is the lowest in the hemisphere. Why is that? Well, Mexicans have traditional corn-based diets. If we can increase consumption, this is a real opportunity for us.” • Cuba. Prior to the embargo in 1961, this was the United State’s top market. “They’re totally dependent on imports, bringing in about 600 metric tons. And they prefer Southern long-grain rice. They’re huge consumers.” Terming Cuba “an interesting case,” Ward said U.S. producers are used to government policies keeping markets shut. “But it usually isn’t our own government keeping us out. In this case, U.S. policy has created problems for us. Cuba is the fifth-largest market. (If exports had been allowed through last fall) we project it would have been the third largest.” If those policies change, Ward said, Cuba could be the number one market for U.S. rice. “So we need to keep the pressure on the political situation. Cubans love U.S. rice and want to buy more.” The federation plans a mission to Cuba in April. • Central America. This is a booming market for rice, said Ward. “There have been some tensions over CAFTA, but the federation continues to work with specific rice groups and individual buyers in those countries. In March, we’re planning a trip to work with trade down there.” • Canada. U.S. rice has a 70 percent market share in Canada. “Any increase in per capita consumption benefits us. Canada produces no rice… but they don’t eat a lot of rice, either. They prefer potatoes and pasta and have little experience preparing rice.” For this reason, the federation’s recent strategy has been to concentrate on the food service sector in Canada, where 40 percent of every dollar is spent on eating out. “The good news is exports to Canada are up again this year — close to $100 million in value for 200,000 metric tons of high-quality milled rice.” • Ghana. Ghana is the largest market for U.S. rice in Africa and is an important entry point for getting rice into neighboring countries. “Most rice in Ghana is sold in mom-and-pop shops and open markets. The market is very price sensitive, and we have strong competition from Thailand. “We developed a promotional program in Ghana, targeting consumers and media. This was done in close cooperation with the local rice importers, using their brands. We promoted their brand first (before switching) to ‘this is U.S. rice.’” This was done, said Ward, to help cut down on fraud because of rampant mislabeling in the country. “The campaign has been very successful and hasn’t cost us much money at all. Television and radio ads are cheap in Ghana. Our exports are up about 30 percent in value from January through September 2004.”

Food aid programs The federation continues to push for greater access for rice in all global food aid programs. “The reality is we’ve been relying on bigger programs in Title I — government-to-government programs. But these programs are shrinking for a variety of reasons: they’re hard to administer and some countries don’t want to take on the debt from using these programs. Plus, the programs have also come under attack by the WTO. And, finally, there’s a lot of competition.” To respond, Ward said, new strategies are needed. Working with the federation’s food aid subcommittee, “we’re reorienting what we’re doing. One thing to focus on is the many voluntary organizations — many you’ve heard about in conjunction with the tsunami disaster. Those folks make a lot of buying decisions about the commodity.” Regarding the tsunami, there’s been very little food aid from the United States in its wake, said Ward. Part of that is the governments in the region prefer to purchase product locally. “They want to help the local economies. And frankly, the monumental cash donations that have come in have enabled them to do that.”


Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.