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U.S. government could help cut rice stocks

If U.S. rice farmers could get a little help from their friends in Washington, the U.S. rice industry could export another 500,000 to 600,000 metric tons of rice per year, the president of the USA Rice Federation said.

And that would go a long way toward reducing the ending stocks of long-grain rice, which USDA is forecasting at just below 900,000 metric tons for the current marketing year. That figure would be the fourth largest since 1986.

Stuart Proctor, the USA Rice CEO, discussed the outlook for rice sales to Cuba, Iraq and Ghana at the joint annual meeting of the Louisiana Rice Council and Louisiana Rice Growers Association in Crowley, Jan. 26. He called Cuba and Iraq priority markets for the Rice Federation while Ghana is an example of aggressive market promotion at work.

“Despite the fact that most of our activities are conducted in the countries where we try to promote U.S. rice, it's just the opposite with Cuba and in Iraq,” he said. “There we have to work more with our own government to eliminate the trade problems.”

Why Cuba and Iraq? “A lot of our market development activities are ones that we've run for many years, and they have a cumulative effect,” he said. “But because of the oversupply situation with U.S. rice we really want to focus on the markets where we can see some results immediately.”

As most rice farmers know, Cuba was the No. 1 market for U.S. rice prior to the revolution that brought Fidel Castro to power in 1959.

“At that time, the market was about 500,000 metric tons, and we had all of it,” said Proctor. “Today it's a 750,000-metric-ton market, and it's primarily a Vietnamese market; it's an Asian market.”

The federation has worked hard to develop the Cuban market since U.S. companies were allowed to resume sales of food and drugs to Cuba after a 40-year embargo against the communist nation.

“We have had some success working with the Cubans to get them to buy U.S. rice. We're selling about 180,000 to 200,000 metric tons of mostly long-grain rice as of last year, and this still should be a 500,000-metric-ton market for us.” (Proctor made similar comments at the Arkansas Rice Council and Rice Growers Association annual meeting Jan. 24.)

Those efforts have been hamstrung in recent months by new Treasury Department rules requiring Cuba to pay cash for shipments of U.S. grain and other products before they leave U.S. ports. Cuba has never defaulted on payments for food.

“You've read how the Treasury Department is still trying to impose new restrictions to keep us out of this market. But our exporters have been able to work around that,” said Proctor. “The Cuban government is still purchasing U.S. rice, but it's more difficult than it used to be.”

The Rice Federation has been sending leadership teams to Cuba, including one last August that negotiated sales of 100,000 metric tons of rough rice and 30,000 metric tons of milled rice. The milled rice sales have yet to be completed.

“But, to be honest, our biggest effort has to do with what we do in Washington,” he noted. “It has to do with how we try to work with members of Congress to remove the barriers that are imposed by our own government. And how we try to influence our legislators to pass laws to give us greater access to that market.”

Iraq is another former U.S. market that was “cut off by our own government,” said Proctor. “In 1990, we exported 500,000 metric tons of rice to Iraq, and with the opening of that market by our government purchases have increased very significantly. We're now exporting about 310,000 metric tons.”

Iraq currently imports about 800,000 metric tons of long-grain rice, most of it from Thailand and Vietnam. Prior to the first Gulf War, they were importing 1.2 million metric tons of long-grain rice.

“So there's a lot of room for growth in this market,” Proctor noted. “And there's a lot of room for us to grow with it.”

On Jan. 20, USDA announced another 105,000-metric-ton sale of U.S. rice to the Iraqis. “If this market gets up to where it was before the conflict, we should take 500,000 to 600,000 metric tons of that market, and that could happen immediately.”

The Rice Federation has also been meeting with the Iraqi Grain Board, the government agency responsible for all food imports. The first meeting occurred in February 2004, and, since then, the federation has participated in visits by Iraqi Grain Board members to Washington and a grain-buying seminar in Kansas.

“They like to buy U.S. rice,” said Proctor. “They remembered many of the companies they dealt with previously. We had them come to Washington and out to a rice purchasing course in Kansas last May, and we're now planning to meet with them over in Dubai in February.”

Much of the negotiations are being conducted government-to-government “because it is not the right time to conduct promotional activities in Iraq,” he said. “It's just not the right time to be talking about and aggressively promoting U.S. rice because of all the problems over there, and I think you're fairly familiar with that.”

Ghana has not been a priority market, but it's an example of promotional activities that are paying off for U.S. rice farmers and millers. Proctor showed slides of printed and electronic materials the Rice Federation has been distributing in Ghana, a country of about 21 million, located on the west coast of Africa.

“We'll team up with different brands that identify U.S. rice on their packages, and we'll print up calendars,” he said. “You can do things in Ghana that you can't do in many countries like conduct TV advertising and radio advertising because the rates there are fairly affordable.

“So we have aggressive radio and TV advertising. Something we do in the United States and many countries is we have recipe competitions.” A competition in Ghana is conducted with radio stations.

Since 2000, the U.S. rice industry has recorded a 100 percent increase in exports to Ghana, reaching 120,000 metric tons in 2004-05.

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