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U.S. rice exports to China closer to reality?

USA Rice Federation on Chinese tour of U.S. rice industry. China to open markets to U.S. rice?

Next week, three Chinese government officials, including a grain inspector, phytosanitary inspector and a pest risk assessor, will tour Arkansas, California and Louisiana rice facilities to observe the sanitary conditions for rice grown, milled, stored and packaged in the United States. The trip, organized by the US Rice Producers Association and funded through the U.S. Department of Agriculture’s Emerging Markets Program, could be the next to last step toward opening China to U.S. rice imports. USA Rice Federation is supporting the mission, assisting with appointments with USA Rice members to ensure that the group returns to China with positive views of U.S.-grown rice.

For more, see Is China gearing up to import U.S. rice?

Before opening its markets to U.S. rice imports, the Chinese will conduct a pest risk assessment (PRA) to determine that such imports will not pose a threat to China’s domestic rice crop. This visit will provide the assurance that China needs to confidently open its market to U.S. rice imports, but is not the first effort toward completing the necessary steps to open this market.

USA Rice first began its work to open China to U.S. rice trade in 2006 by contacting the USDA’s Animal Plant Health Inspection Service (APHIS) about the China Phytosanitary Protocol (PP). By August 2007, APHIS had determined what was needed and had begun to gather the information required by the Chinese Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), the Chinese equivalent of APHIS.

In December 2007, China passed a new law establishing more stringent requirements for entry of “new” products into the country. This move necessitated that a PRA be conducted. In consultation with AQSIQ, APHIS was granted permission to conduct the PRA on behalf of AQSIQ and provide the outcome of the assessment to the Chinese. In the ensuing years, there were several exchanges of communication between APHIS and AQSIQ to answer questions submitted by the Chinese. The last remaining pest for which the Chinese have expressed reservations is the Khapra Beetle, for which the United States maintains a phytosanitary restriction and has in place countermeasures for any reported occurrence of the insect inside U.S. borders.

Assuring the Chinese officials that the U.S. rice industry has in place measures to secure food safety and sanitation will hopefully advance the development of the needed phytosanitary protocol. This would be a tremendously positive development for the U.S. rice industry and may open a yet untapped market for U.S. rice.

The United States imports rice from China and in the current calendar year, Chinese rice imports totaled $2.6 million. The lack of U.S.-China phytosanitary protocol prevents legal exports of U.S.-grown rice to China, which imposes a 1 percent duty, a 1.5 percent agency fee and a 13 percent value added tax on imports of rice.   

Resolving this trade barrier with the Chinese could open a new market for U.S. rice as indications are that the Chinese would rate U.S.-grown rice as a premium product. And while the growing middle class and expanding population in China bode well for the market potential there, the value of this potential market is unknown.

Even as the work continues to open this key potential growth market for U.S. rice, progress has been slow over the past several years and this will likely not be an instant, overnight market, as rice is a sensitive commodity in China. As such, USA Rice will continue its work APHIS and other U.S. government officials to remove trade barriers for U.S. grown rice in China and worldwide.

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