• Global Rice Markets are Distorted by Bad Actors, Contributing to U.S. Trade Deficits USA Rice Testifies at Commerce Department

    by Deborah Willenborg | May 18, 2017
    USA Rice's Cummings (far right) delivers
    U.S. rice message on trade
    Bob-Cummings-Testimony-on-Trade
    WASHINGTON, DC -- The Department of Commerce hosted a day-long hearing with witnesses from across the U.S. economy to examine reasons for bilateral deficits with 13 U.S. trading partners.  USA Rice, participating in the agriculture panel, explained that while the U.S. rice industry generates a $1.2 billion trade surplus, “a majority of the countries being examined, including China, the European Union, India, Japan, Korea, Taiwan, Thailand, and Viet Nam intervene heavily in the rice market, and the result is restricted access for U.S. rice or unfair competition in foreign markets.”

    In his testimony, USA Rice Chief Operating Officer Bob Cummings further noted that “globally rice is one of the most heavily protected crops in terms of domestic support, border protection, and export controls,” and that, like nearly all of U.S. agriculture, export success hinges on good trade agreements.

    “Well-negotiated and enforced trade agreement are the key to helping the U.S. rice industry contribute to reducing bilateral trade deficits.  Where there are good, solid trade agreements, increased rice exports follow.  We need look no further than the Uruguay Round Agreements and establishment of the WTO, NAFTA, and the U.S. Colombia Free Trade Agreement for evidence,” he said.

    Today’s hearing was in response to President Trump’s executive order of March 31 to the Secretary of Commerce, the U.S. Trade Representative, and other trade agencies to prepare an Omnibus R
    eport on Significant Trade Barriers.  Canada, China, the European Union, India, Indonesia, Japan, Korea, Malaysia, Mexico, Switzerland, Taiwan, Thailand, and Viet Nam were specifically being examined today.  

    Cummings said USA Rice and other agriculture groups have mounted a campaign to highlight the significant contributions agriculture makes to U.S. exports and remind the administration of the importance of a forward-looking trade policy that supports good trade agreements, strives to open new markets, and undertakes aggressive enforcement against trading partners that don’t live up to their international obligations.  

    “U.S. rice exports in isolation will not resolve the bilateral trade deficits identified by the administration.  However, action by the U.S. government to support exports from America’s highly efficient agricultural sector is an important part of the solution. To that end, existing trade agreements that are working well for agriculture should not be undone, and enforcement can and should be stepped up,” concluded Cummings.
  • Rice Industry to Remain Vigilant as Trump Administration Makes NAFTA Renegotiation Official

    by Deborah Willenborg | May 18, 2017
    Chairman King reminds USDA #HaftaNAFTA
    Brian-King-&-Sonny-Perdue
    WASHINGTON, DC -- The Trump Administration today formally notified the U.S. Congress of its intent to enter into negotiations with Mexico and Canada to “modernize” the North American Free Trade Agreement, or NAFTA.  A letter from freshly-installed U.S. Trade Representative Robert Lighthizer to Congressional leadership begins a mandated 90-day consultation with Congress before formal negotiations can begin.  Additionally, U.S. law requires the President to provide detailed negotiating objectives 30 days prior to the start of negotiations.

    “Everyone in rice country and across U.S. agriculture knows how important NAFTA is to our sector’s economic health,” said USA Rice Chairman Brian King.  “NAFTA made Mexico our number one export market and solidified our dominant position in Canada.  Our message is simple – modernize NAFTA if necessary, but do no harm to the rice industry.”

    King, who just returned from leading a rice trade delegation to Mexico, said USA Rice will aggressively demonstrate to Members of Congress and the Trump Administration the importance of NAFTA, the economic benefits it brings to not just rice, but most of the agriculture industry, and the real perils that could result in a poorly renegotiated deal.

    “Mexico is our top market and Canada is our number four market because of NAFTA, not in spite of it,” King said.  “We will remind the negotiators of this now and throughout the process.”
  • Trump Trade Team Locked and Loaded with Lighthizer

    by Michael Klein | May 12, 2017
    He knows Mexico is #1 for rice
    ITP-Trump Trade Team Locked and Loaded with Lighthizer-170512

    President Trump’s trade team was rounded out yesterday when the man at the top, Robert Lighthizer, was finally confirmed by the U.S. Senate to become the U.S. Trade Representative.

    Ambassador Lighthizer hits the ground running with a long list of To-Do items, perhaps most notably overseeing the renegotiation of the North American Free Trade Agreement (NAFTA), a process that could get underway as early as next week with a formal notification to Congress of his intent to reopen the sprawling deal.

    Lighthizer’s views on free trade and agriculture that emerged during his confirmation process did much to reassure the ag sector, upset by what many perceived as reckless rhetoric on trade coming out of the White House.

    When asked if the needs of farmers and ranchers could be protected during any tinkering with  NAFTA, Lighthizer responded: “I do believe it can be done. I’m not suggesting that it will be easy, but I do believe it can be done.”

    “We welcome Ambassador Lighthizer to his new position and trust that any renegotiation of NAFTA will adhere to the guiding principle of ‘First do no harm,’” said Betsy Ward, President and CEO of USA Rice.  “Mexico remains our top export market and Canada our fourth.  That is because of NAFTA, not in spite of it.”

    Other issues awaiting Lighthizer include a 100 day trade program with China that, at this time, does not look to include U.S. rice, a possible opening up of the U.S.-Korea Free Trade Agreement from which rice was excluded in 2007, and a stepped up emphasis on enforcement of existing trade deals and rooting out bad actors as emphasized by President Trump on the campaign trail and since.

  • Week of Meetings Reinforces Relationship Between U.S. and Mexican Rice Industries

    by Deborah Willenborg | Apr 28, 2017
    MRC President Pedro Schettino and
    USA Rice Chairman Brian King
    ITP.w-Pedro-Schettino-& B.-King-170428
    MEXICO CITY, MEXICO – A delegation of U.S. rice industry leaders has wrapped up a series of successful meetings here with all segments of the Mexican rice industry against the backdrop of heightened tension and uncertainty for the future of the North American Free Trade Agreement (NAFTA), a treaty both industries adamantly support.

    The 12-member USA Rice delegation, led by USA Rice Chairman Brian King and President & CEO Betsy Ward, began the week with a briefing by U.S. Embassy officials, followed by a meeting with the Mexican Rice Council (MRC), the most important and influential producer and miller organization in Mexico.  

    Discussions centered around the impact of the Mexican government’s move to drop tariffs to zero for countries with which Mexico does not currently have a free trade agreement; the need for a coordinated approach to any renegotiation or “modernizing” of NAFTA; and the current crop situation in both Mexico and the United States.

    While most Asian rices do not enjoy the quality, safety, or consumer acceptance that U.S. rice does, the tariff issue is seen by both the U.S. and Mexican industries as potentially paving the way for greater imports from Asian exporters who already heavily subsidize their domestic rice industries.

    The delegation heard time and again how NAFTA has helped U.S. rice compete, and how the U.S. and Mexican industries must continue to make the case with their respective governments about the benefits of NAFTA that far outweigh any disruption in trade that withdrawal or significant modernization could bring.

    “Mexico takes 20 percent of all U.S. rice exports – 16 percent of all U.S. long grain rice – and that is because of NAFTA, not in spite of it,” explained King.  “We are grateful to have been able to meet with so many of our valued customers here and we heard them loud and clear and agree: ‘NAFTA works!’”

    "The direct and positive impact that NAFTA has had on U.S. rice exports and on jobs and prosperity in Mexico and the United States must be continually emphasized,” said Ward.  “We will be working together to preserve the benefits of NAFTA for the U.S. rice industry, as well as for our Mexican partners.”  

    The delegation also met with key Mexican rice millers, packers, distributors, and traders to express appreciation for the business relationships that have been developed over many years with Mexico.   

    “Strong promotion of increased rice consumption in Mexico supports the objectives of both USA Rice and the Mexican Rice Council, and cooperation on promotion will be strengthened as a result of these meetings,” said John Owen, Louisiana rice farmer and chair of the Louisiana Rice Promotion Board, who attended the meetings.

    “The theme of common goals for our industries was reiterated in every meeting,” said Todd Burich, chair of the USA Rice Trade Policy Subcommittee for Latin America.  “We accomplished a great deal here this week and I think we all head home with a greater appreciation for just how interdependent we are, how committed to free and open trade between our countries we are, and how we will work with our respective governments to effectively convey those truths.”
  • Inspection Issues are Major Concern at U.S.-Taiwan Rice Sectors Annual Technical Meeting

    by Deborah Willenborg | Apr 27, 2017
    On-site learning session with
    CA rice farmer Michael Rue
    Taiwan-Technical-Mtg,-Michael-Rue-& Delegation
    SACRAMENTO, CALIFORNIA – Representatives from the U.S. and Taiwan rice industries met for two days last week to discuss a range of technical issues influencing rice trade.  Taiwan’s government imports rice to meet the island’s commitment to the World Trade Organization, which includes annual purchases from the United States of 64,634 metric tons (brown basis).  

    “We greatly value the market in Taiwan, and last week’s meeting was an important opportunity to exchange information, discuss issues of mutual concern, and find solutions that make U.S.-Taiwan rice trade run more smoothly and efficiently,” said USA Rice COO Bob Cummings.

    The Taiwan team, headed by Huang Chao-hsing of Taiwan’s Agriculture and Food Agency (AFA), outlined AFA’s tender intentions for 2017, as well as the agency’s efforts to increase rice utilization in Taiwan.  Differences in results between quality inspections in the United States and upon arrival in Taiwan have been a concern of both sides for several years, and were discussed in detail at the Sacramento meeting.  

    “Differing inspection results for the same shipment of rice is a major obstacle in our rice trade and I’m glad that Taiwan accepted our suggestion to hold a rice grading seminar in the near future.  We look forward to a hands-on discussion among experts, a better understanding of Taiwan’s quality standards, and more consistent results,” continued Cummings.

    USA Rice members and staff support annual technical meetings with Japan, Korea, and Taiwan – important export markets where national governments control or heavily influence rice imports – as opportunities to resolve non-policy issues and to build trust among industry segments. 

  • USA Rice, Mexican Rice Council: Leave NAFTA Alone!

    by Deborah Willenborg | Apr 27, 2017
    In agreement:  #HaftaNAFTA
    USA-Rice,-MX-Rice-Council-Mtg,-NAFTA-statement
    MEXICO CITY, MEXICO – The two national organizations representing their respective rice industries in the United States and Mexico agree that any renegotiation of the North America Free Trade Agreement (NAFTA) could have serious consequences for the stable and consistent rice trade that has created jobs and benefitted consumers and farmers on both sides of the border.
     
    During high level meetings here this week, USA Rice and the Mexican Rice Council recognized the mutual benefits achieved through free trade that support the viability of U.S. farmers and guarantees a safe, consistent, and affordable staple food product for Mexican consumers.
     
    The 12-person USA Rice delegation met with all segments of the Mexican rice industry, including, Mexican Rice Council, farmers, millers, importers, and distributors, and there was consensus that the goals of the industries are similar – keep the market free and open and increase consumption of rice in Mexico.  
     
    Mexico remains the number one rice export market in value and volume, accounting for 20 percent of all U.S. rice exports and more than 16 percent of total U.S. long grain rice production.
     
    USA Rice has worked for decades developing the Mexican market, and NAFTA has been central to market growth.  Changing NAFTA threatens to disrupt this most important market and opens the door for rice imports from countries that heavily subsidize their rice industries, like Viet Nam.
     
    “There’s a lot at stake here and if NAFTA goes away, we lose.  Plain and simple,” said Brian King, USA Rice Chairman and the delegation leader.  “The reality is, we need the Mexican market more than they need us.  They’ll get their rice, one way or another.  I’m interested in making certain it’s coming from the United States.”
     
    “We’re sending a united message to President Trump that withdrawal from NAFTA, or significant revisions, would likely hurt everyone involved – particularly the rural, agricultural-based communities that quite frankly, are the ones that made him President,” said Betsy Ward, USA Rice President & CEO.
     
    Ward added that USA Rice and the Mexican Rice Council also agreed on the importance of continuing the education process for their respective governments on the win-win that is NAFTA, rice trade between the countries, and the critical need to keep markets open.
  • Trump Asking for More Information and Enforcement on Trade

    by Michael Klein | Apr 05, 2017
    He's got his marching orders
    ITP-Trump Asking for More Information and Enforcenment on Trade-170405

    WASHINGTON, DC – On Friday, President Trump signed two executive orders (E.O.) dealing with trade issues, both of which are of interest to the U.S. rice industry.

    The first provides for enhanced collection and enforcement of antidumping and countervailing duties and for stepping up enforcement of existing U.S. trade and customs law.

    The second E.O. directs the Secretary of Commerce and the office of the U.S. Trade Representative to prepare, within 90 days, an Omnibus Report on Significant Trade Deficits for the President’s review.

    This report will contain “…current and comprehensive information regarding unfair trade practices and the causes of United States trade deficits.”  The report is expected to identify those trading partners with which the United States had a significant trade deficit in merchandise in 2016 and address the causes of the deficit and whether the foreign country is unfairly burdening U.S. exports or the commerce of the United States, among other requirements.

    Media reports indicate that the Report will focus on trade deficits with the following countries:  China, Japan, Germany, Mexico, Ireland, Viet Nam, Italy, Korea, Malaysia, India, Thailand, France, Switzerland, Taiwan, Indonesia, and Canada.  Several of these countries are either major export markets for U.S. rice or competitors on the global rice market.

    “USA Rice has long called for increased action by the U.S. government to make sure that other countries are acting fairly in international and U.S. markets and living up to their international obligations.  These two executive orders show a shift in focus, and we look forward to providing information to the administration as details about implementing the president’s directives become known,” said USA Rice COO Bob Cummings.

  • USA Rice Welcomes Gil Thompson

    by Michael Klein | Apr 03, 2017
    Gil Thompson
     ITP-USA Rice Welcomes Gil Thompson-170403

    ARLINGTON, VA – USA Rice Federation is pleased to announce the hiring of Gil Thompson as Manager, International Policy. In this capacity, Gil will be working on international trade issues and producing reports on the American rice industry, including the Rice Executive, and staffing the World Market Price Subcommittee.

    Gil comes to USA Rice from the office of Congressman Mike Honda (CA-17), where he worked on issues relating to financial services, veterans affairs, and related appropriations.

    Raised in Silicon Valley, Gil received his double B.A. in Political Science and Philosophy from St. Olaf College in Minnesota. He then spent two years working for the Manhattan District Attorney’s Office, investigating large-scale financial crimes. Afterward, Gil went on to receive his M.A. in Comparative and International Studies from ETH Zurich in Switzerland.

    “We look forward to Gil’s contribution on preserving and opening up rice markets globally as well as his assistance across USA Rice’s program areas,” said USA Rice COO Bob Cummings. 

  • UK Makes Brexit Official; What are Implications for U.S. Rice?

    by Michael Klein | Mar 30, 2017
    Vanishing act
    Brexit Graphic

    BRUSSELS, BELGIUM – In a move that will have implications and present opportunities for U.S. rice, the Prime Minister of the United Kingdom informed the President of the European Union yesterday that the UK is invoking its rights under Article 50 of the Treaty on European Union to withdraw from the EU.  Teresa May’s six-page letter formalized what all knew was coming since UK citizens voted to leave the EU in June – the “Brexit.”

    The prime minister’s action begins a two-year negotiation between UK and EU officials to remove the UK from more than 45 years of regulatory, economic, and political integration and establish a new relationship with the remaining 27 members of the EU.

    “This task is tremendously complicated and it’s unclear if two years will be sufficient,” said Bob Cummings, USA Rice COO.  “Many believe that the result will be an interim agreement that recognizes Brexit while the two sides continue negotiations, and the U.S. rice industry has a definite stake in the outcome.”

    At issue for the U.S. industry is how the much-diminished European market for U.S. rice will fare.  What has essentially been a single market: the EU, is becoming two markets: the EU and the UK.

    “We will need to work closely with U.S. trade officials on the treatment of the existing 38,000-metric-ton tariff rate quota for milled rice that the United States has with the EU,” Cummings said.  “Brexit should not affect that agreement that is the foundation of much of our current access in the EU where duties on U.S. rice are high while either very low or non-existent for many, many competitors.”

    Cummings acknowledged that much of the U.S. rice heading to the EU went to the UK, but that once Brexit is complete, the UK will have to establish its own tariff regime for imports not only from the EU but also from all other countries, including the United States.

    “Any U.S.-UK trade deal is at least two years away as the UK is unable to negotiate bilateral agreements with other countries while still a member of the EU,” Cummings explained.  “A U.S.-UK trade deal is attractive to our industry, especially now that a larger U.S.-EU trade deal (T-TIP) appears to be in hibernation.”

    The United States has exceeded its EU TRQ in each of the last 10 years, with 55,840 mt ($42.4 million) going to the EU last year.  However, shipments are down considerably from the pre-Liberty Link period.  For example, exports to the EU in 2005 were almost 306,000 mt ($86.4 million), of which 135,640 mt ($36.1 million) went to the UK.

  • Growing Hostility Between Turkey and Russia Could Benefit U.S. Rice

    by Michael Klein | Mar 29, 2017
    Eat up, son
    IP-Growing Hostility Between Turkey and Russia Could Benefit US 2-170329

    ANKARA, TURKEY – USA Rice maintains a robust program and trade servicing program here to ensure U.S.-grown rice maintains a strong presence and identity in the market.  As a result, Turkey is a top ten destination for U.S.-grown rice and exports have averaged more than 192,000 metric tons over the past four or five years. Now those exports are poised to gain as Turkey and Russia are engaged in an all-out trade war on agriculture goods.

    Turkey and Russia have a complicated and intertwined history that dates back hundreds of years, and the two countries have maintained a healthy respect for each other, if not a full working relationship. However, that relationship has been under great strain as of late.

    In November 2015, a Turkish fighter jet shot down a Russian plane near the Turkish-Syrian border during an airspace dispute.  Russia slapped several economic sanctions on Turkey, including banning some agricultural imports.

    Full-scale war was avoided and the parties worked to normalize relations. But then in August 2016 Turkish President Erdogan called the Russian annexation of Crimea “Crimea’s occupation.”  And in December, a Turkish gunman assassinated the Russian Ambassador to Turkey in an art gallery in front of horrified onlookers.  Although considered by most, including Russian President Vladimir Putin, to be a provocation designed to derail the warming relations between Turkey and Russia, the incident escalated tensions.  Tensions that are now hitting trade in food.

    In February, Russia lifted the 2015 ban on imports from Turkey of onions, shallots, cauliflower, broccoli, salt, carnations, and gum, but the economic impact to Turkey was minuscule – and at less than $20 million, far below the relief the Turkish government expected.

    Turkey responded recently by banning the import of corn, wheat, crude sunflower oil, sunflower seeds, peas, and rice from Russia.  This annual trade is estimated to be worth $1.3 billion and clearly got the Russian government’s attention.

    An upcoming trade mission of Russian officials to Turkey to discuss ending the trade skirmish has been canceled until the new Turkish bans are lifted.  Sixteen tons of Turkish fruit has been rejected by Russia, and importantly here, the brisk trade in tomatoes, worth about $250 million annually, has been shut down.

    While this is going on, 25,000 metric tons of U.S.-grown rice are on their way to Turkey, and two importers are considering purchasing another 50,000 metric tons according to the trade here.

    USA Rice continues to keep a bold presence in country, with 95 earned media placements in January and February, and in-store demonstrations every week.

    “Turkey has always been an important market for U.S. rice and I think we are a valued supplier,” said Hugh Maginnis, vice president of international for USA Rice. “While this trade battle goes on between Turkey and Russia, it’s important for the Turkish government and trade to know they can continue to count on the U.S. to deliver high quality rice that their people love and depend on.”

  • U.S. Rice Deliveries to Mexico Surge in 2017 – Both Paddy and Milled Rice Show Significant Gains

    by Deborah Willenborg | Mar 24, 2017
    Clear the bins for U.S. rice
    IMX-Sales-Numbers-Up, rice bins
    MEXICO CITY, MEXICO -- According to official Mexican government data, total U.S. rice deliveries (non-converted) to Mexico were up a staggering 31.4 percent in the first two-months of 2017 compared with the same period the previous year.  That’s 148,016 MT, and of significant note, milled rice exports nearly tripled – to 22,478 metric tons, nearly half of total milled exports in all of 2016.
     
    Paddy arrivals were up 25 percent as local milling demand increased, not only for local consumption but also due to additional Mexican milled rice export sales to Venezuela.

    U.S. milled rice shipments were up 183 percent and market share up to 63.3 percent, compared with a market share of just 22.4 percent in the same period in 2016.

    Total Mexican rice imports were up 17.1 percent in this period, and the U.S. total market share for all types of rice reached 93.1 percent, the best since 2013.

    “Two months do not a trend make, but it’s very good news,” said USA Rice Vice President International Hugh Maginnis.  “USA Rice continues our aggressive promotion programs in this key market and the U.S. rice industry is very grateful for Mexico’s continued loyalty as our number one export customer.  Mexico is a valued trading partner, and we are heartened that our southern neighbors continue to place their trust in the quality and reliability that U.S. rice exporters provide.”
  • USA Rice Engaged in Productive Trade Conversation with Trump Administration

    by Deborah Willenborg | Mar 17, 2017
    USA Rice braves the elements to attend
    White House ag trade meeting
    White-House in snow
    WASHINGTON, DC – USA Rice and other farm groups met on Wednesday at the White House with Trump Administration officials that make up the National Economic Council to discuss the importance of continued growth of agriculture exports and trade policy concerns.

    The commodity groups expressed their eagerness to work with the Administration on preserving the benefits of the North American Free Trade Agreement (NAFTA) and expanding market access for agricultural goods in upcoming discussions with NAFTA partners as well as countries in the Asia-Pacific region and the European Union (EU).

    Administration officials laid out the President’s priorities for agricultural trade and job creation, and asked those in attendance to provide recommendations for maintaining and improving trade relations with current and prospective partners.

    USA Rice and other groups noted that the majority of their potential consumers live in countries other than the United States.  They also emphasized that agriculture is actually America’s largest manufacturing sector providing more than 15 million U.S. jobs and $423 billion in domestic economic activity.      

    Ben Mosely, vice president of government affairs for USA Rice, was among those in attendance to share insight on the rice industry’s priorities.  “The Administration officials were gracious in not only inviting us out and hosting the meeting, but for truly listening to agriculture’s perspective on trade barriers and challenges agriculture is facing,” he said.

    Knowing President Trump has an upcoming meeting with Chinese President Xi Jinping, Mosely said, “It was important to take the opportunity to elevate one of USA Rice’s highest priorities, exporting U.S.-grown rice to China.  I urged the Administration to finalize the phytosanitary agreement for rice between our two countries that will pave the way for U.S. rice exports to China, the largest importer of rice in the world.”

    “I left the meeting with a sense of assurance that the Trump Administration understands agriculture’s needs and that they welcome our recommendations to increase U.S. agriculture exports,” said Mosely.  “If we continue to expand on our surplus of agricultural exports around the globe, then our shared goal of increasing manufacturing, job creation, and ultimately, economic growth are all achievable.  And those are all things that people in rural America desperately need to see.”  
  • Lighthizer Survives Confirmation Hearing, Reiterates Importance of Agriculture for U.S. Trade

    by Deborah Willenborg | Mar 15, 2017
    Robert Lighthizer (left) and Senator Bob Dole who introduced him in the Senate hearing
    Robert Lighthizer-&-Bob-Dole
    WASHINGTON, DC – Yesterday, the Senate Committee on Finance held the confirmation hearing for Robert Lighthizer, President Trump’s nominee to the position of U.S. Trade Representative.

    Lighthizer spent more than an hour and a half under scrutiny by Members of the Committee with the majority of questions aimed at the importance of preserving agriculture’s bounty due to the North American Free Trade Agreement (NAFTA) and working out alternative trade deals in Asia following the demise of the Trans Pacific Partnership (TPP).

    In response to concerns over NAFTA renegotiation and potential harmful effects to U.S. agriculture markets, Lighthizer said, “We have to be careful not to lose what we gained.  I do believe it can be done.  I’m not suggesting that it will be easy, but I do believe it can be done.”

    Senate Ag Committee Chairman Pat Roberts (R-KS) told Lighthizer, “If we do not sell agriculture commodities over the next several months, you, sir, will have a problem on your hands.  We all will have a problem on our hands.”

    “I expect we’re going to have very rigorous enforcement,” Lighthizer told Committee Chairman Orrin Hatch (R-UT), adding that President Trump had picked him for the job “in part because of my enforcement background.  I expect to bring as many actions as are justified, both at the [World Trade Organization] and in our bilateral agreements,” he added.

    Senator Bill Cassidy (R-LA) raised concerns on the horizon from the rice industry over the proposed renegotiation of NAFTA.  “Products say for example, rice, are actually advantaged under NAFTA so it actually benefits them.  What would you say to my rice farmer that’s concerned that there will be retaliation [from Mexico] and they’ll now be competing against Vietnam that may have a state-owned enterprise selling rice at a discount relative to what our rice producers can do?” said Cassidy.

    Lighthizer responded by saying, “I hope we can renegotiate NAFTA in a way that benefits both countries and doesn’t put agriculture in a precarious position.”

    Also important for U.S.-grown rice, Lighthizer stressed that, “Japan, of course, is a primary target for increased access for agriculture.”

    The next steps for Lighthizer’s confirmation by the Committee and then the full Senate are still unclear.  Democrats on the Committee are requesting a waiver for Lighthizer’s prior business interests (required for his confirmation to proceed) and demanding that it be packaged with an unrelated bill on coal miner rights.

  • Mexico Opens Rice Market to All Origins at Zero Duty

    by Deborah Willenborg | Mar 02, 2017
    The doors are open
    Mexico-Opens-Market-at-Zero-Duty
    MEXICO CITY, MEXICO – Yesterday, the Government of Mexico (GOM) officially announced permits of up to 150,000 MT of rice (all types) originating from non-free trade agreement countries, opening the door for Vietnamese milled rice to enter Mexico duty free.  The permits will be issued to Mexican companies and be valid through December 31, 2017.

    The announcement, which was rumored for months and reported here (see USA Rice Daily, February 2, 2017), was published in Mexico's Official Gazette.
     
    Viet Nam last had duty free access to the Mexico market from 2008 through December 2014.   During that period sales were zero from 2008 through 2012; in 2013 sales rose to 11,676 MT; in 2014 sales were 66,642 MT; and in 2014 sales fell to 2,096 MT.  All rice sold by Viet Nam to Mexico is long grain milled rice as there is no phytosanitary protocol between the two countries that allows paddy rice to be imported.
     
    The Mexican trade does not expect an immediate surge in milled rice imports from Viet Nam or a displacement for U.S. rice.  Traders report that price spreads are not currently large enough to favor Asian rice over U.S. rice and that these spreads need to be significant to offset foreign exchange risks, increased delivery times, and potential phytosanitary issues.  In addition, aggressive pricing by Mexican millers has also contributed to decreased need for Asian rice.  However, the threat of increased Asian imports does exist, especially as the potential for price spreads widens.
     
    “For a long time, Mexico has been an almost exclusively paddy market and a lock for U.S. exporters,” said Brian King, chairman of USA Rice and of USA Rice’s Western Hemisphere Promotion Subcommittee.  “But Mexican imports have diversified over the past decade, where milled rice now makes up approximately 25 percent of the total.  While the U.S. still dominates the paddy market, Uruguay has supplanted U.S. as the leading milled rice origin for what the trade reports as having better quality.”

    In 2016, the U.S. delivered 48,750 MT of milled rice for only a 32 percent market share, the lowest on record.  Viet Nam had very minor deliveries to Mexico in 2016 as the 20 percent duty was in effect.
     
    According to data from the GOM, in the first month of 2017, Mexico reported deliveries of U.S. milled rice of 19,214 MT, the largest sales month on record.  Uruguayan rice deliveries fell 26 percent (compared with January 2016) to 7,622 MT.  No milled rice imports were recorded for other origins in January 2017.

    “Talk in Washington of renegotiating NAFTA has clearly gotten Mexico’s attention, and the government there is looking to diversify sources of supply for products like rice.  Our prices and proximity make us competitive today, but competition is increasing, especially in the value-added milled rice market.  We’ll continue to educate the new administration on the importance of NAFTA and engage with our partners in Mexico to strengthen ties in our number one export market,” concluded King.
  • Colombia to Remove Import Restrictions on U.S. Rough Rice

    by Deborah Willenborg | Mar 01, 2017
    It's about time
    Colombia-to-Remove-Restriction-on-US-Rough-Rice, old photo
    WASHINGTON, DC -- The Colombian government informed the United States in early February that it has begun the process of removing existing restrictions on the import of U.S. paddy rice.  USA Rice was informed of this positive news by USDA’s Animal and Plant Health Inspection Service (APHIS) recently.  

    “This is tremendous news, and a success that we have worked hard to achieve,” said USA Rice Chairman Brian King, with rice merchant Erwin-Keith, Inc. in Wynne, Arkansas.  “This development will allow U.S. exporters to maximize marketing opportunities under the U.S.-Colombia Trade Promotion Agreement.”

    In a letter to APHIS, the General Manager of Colombia’s counterpart organization, known as ICA, stated that the ​diseaseTilletia horrida (rice smut) is prevalent in several rice growing areas of Colombia.  As a consequence, Colombia will begin the process of deregulation of the ​disease and updating of the current phytosanitary import requirements for rice seed and paddy coming from the United States.  Since 2012, Colombia has restricted the import of U.S. paddy to the port of Barranquilla and requires burning of rice hulls to control the spread of T. horrida.  

    “We waited several years for Colombia to complete its study on the prevalence of this ​disease, and the results confirm what many suspected.  Our task now is to encourage U.S. and Colombian officials to work quickly toward removing import restrictions on the import of U.S. rice.  We understand that U.S. and Colombian plant health officials will meet later this month, and we look forward to continued progress from this session,” concluded King.

    Colombia has emerged as a significant market for U.S. rice, primarily long grain milled, since the trade agreement came into effect in 2012.  U.S. exports were 140,000 MT of rice in 2016, valued at $58.2 million.  Import duties on U.S. rice phase out gradually, and end in 2030.  In exchange for this phase out, increasing amounts of U.S. rice enter the country duty free each year under what is called a tariff rate quota (TRQ) – 98,448 MT in 2017 – and, significantly, research activities in the six rice-producing states share the profits from auctioning access under the TRQ.  In 2016, revenue to the six states exceeded $13 million.
  • WMP Subcommittee Closes Out Government Affairs Conference

    by Deborah Willenborg | Feb 24, 2017
    Keith Glover
    Keith-Glover
    WASHINGTON, DC -- USA Rice’s World Market Price Subcommittee met on February 16, marking the unofficial last meeting of the 2017 Government Affairs Conference.  “We meet in Washington, DC three times a year, and our February session benefits from several previous days of meetings with congressional and administration officials,” said Subcommittee Chairman Keith Glover of Producers’ Rice Mill in Stuttgart, Arkansas.  “We also welcome the newly graduated Leadership Class so they can see first-hand the work of the Subcommittee and all segments of USA Rice’s membership.”

    Members discussed estimates for the 2017 rice crop in anticipation of the U.S. Department of Agriculture’s Prospective Plantings Report to be issued at the end of March.  Area this year could fall as much as 15 percent from 2016’s 3.15 million acres given current prices of rice and competing crops.  The Subcommittee focused discussions with USDA’s National Agricultural Statistics Service on reporting of monthly rough rice prices.  “Reporting of average cash prices by NASS is very important to our industry, and we continue to work with the agency and our members to get this right,” said Glover.

    Representatives from the Foreign Agricultural Service (FAS) reported on favorable developments in USA Rice’s long-running efforts to have fortified rice included in U.S. food aid programs and to have private food aid organizations request fortified rice in U.S. donations.  

    “We met earlier this week with administration officials and representatives of the World Food Programme and we’re getting very close to the door opening wide for U.S. fortified rice in food aid,” reported USA Rice President & CEO Betsy Ward.  

    FAS officials also noted the discrepancy in figures for rice exports to Mexico as reported by the Bureau of the Census, the U.S. government’s official source for trade data, and figures as reported in USDA’s weekly Export Sales report.  Export numbers to Mexico as carried in Export Sales consistently lag those reported by Census, and all industry participants were encouraged to improve exporting reporting to USDA in line with regulatory requirements.

    The Subcommittee will next meet in May in Washington, DC.
  • Korea Policy to Decrease Rice Plantings and Dispose of Excess Stocks

    by Deborah Willenborg | Feb 22, 2017
    Striking a balance
    Supply & Demand
    SEOUL, KOREA – Due to higher than normal yield for the past few years and the resulting oversupply and price pressure, the Korean government is attempting to reach a balance between rice supply and demand by 2018.  The plan entails seeking a gradual reduction in harvested area and promoting expanded rice consumption.

    The Ministry of Agriculture, Food and Rural Affairs (MAFRA) recently released its plan to reduce arable land used for rice cultivation to 711,000 hectares by 2018, a 4.7 percent reduction from the earlier established target of 746,000 hectares.

    The government also plans to introduce the Production Adjustment Program which will encourage rice farmers to plant other crops in their rice land (up to 18,000 hectares nationally in 2017).  A recent survey by the Korea Rural Economic Institute (KREI) indicated that rice farmers intend to plant 762,000 hectares in 2017, a decrease of 2.1 percent from the previous year.

    Exacerbating the issue, as in many Asian countries, per capita consumption of table rice here continues to decline as diets are diversified and westernized.  Per capita table rice consumption has declined by about 2.75 pounds per year in the last five years and projected consumption this year stands at 132 pounds per person.

    In a further step to reduce the oversupply situation, the government will expand rice availability for use in animal feed to 470,000 MT (milled basis) in 2017.  This compares to just 91,000 MT in 2016 and practically none in years prior to 2016.  To assure usage for feed, the rice is sold at a price that is comparable to 88 percent of the value of corn imported in 2016.

    “Korea agreed to import a minimum of 408,700 MT of rice per year at a duty level of 5 percent when it joined the World Trade Organization,” said USA Rice Vice President International Hugh Maginnis.  “Prior to tariffication in January 2015, a number of countries, including the United States, had a country specific quota.  Currently, Korea is still bound to import that quantity on a global basis without regard to origin.  

    “It is extremely important that the U.S. remains engaged with the Korean government on this,” said Maginnis.  “USA Rice will continue to promote U.S. rice to assure that we maintain a significant share of this market, given that Korea is currently the seventh largest export destination for U.S. rice.”  

    Under the 2016 MFN TRQ, the U.S. contracted to export 165,900 MT of rice to Korea (40,000 MT for table use) setting a market share record of 40.6 percent. 

  • USA Rice Members to State Department: “Keep Pressure on Middle East”

    by Deborah Willenborg | Feb 15, 2017
    Secretary Joseph Pennington
    ITP.w-Joseph-Pennington-170215
    WASHINGTON, DC -- Yesterday, USA Rice members met key Iraq policymakers at the State Department to get an update on the Iraqi rice tendering process under the Memorandum of Understanding (MOU) between the U.S. and Iraq.  Members reminded officials of the priority the industry places on Iraq as a future market.
     
    The group was hosted by Deputy Assistant Secretary for Iraq Joseph Pennington, who provided details on the current political and economic situation in Iraq, and also briefed members on the status of current negotiations, and prospects for moving forward on export sales of U.S. rice.  

    The most recent tender was pulled and never filled, but State Department officials are hopeful it will be reissued soon as negotiations are ongoing on price and payment terms.  The last time U.S. rice was sold in Iraq was early 2016 when Iraq purchased 90,000 MT.  

    “Iraq is a crucially important market for us,” said USA Rice Chairman Brian King who attended the meeting.  “Our members were able to impress upon Secretary Pennington and his team how important it is to have a fair, open, and transparent tendering system in Iraq so that the U.S. rice industry can compete and be successful in Iraq.  We greatly appreciate the strong support of the State Department in Washington, as well as Ambassador Douglas Silliman in Baghdad, in our continued efforts to press the case with Iraq for a successful tender that leads to sales of U.S. rice.”   

    Also participating in the meeting was Deputy Assistant Secretary for Iran Christopher Backemeyer, who said that while the outlook for Iran was less than optimistic, there appears to be interest in U.S. rice from private traders and that, with future improvements in the political environment, the potential for trade is there. 

  • USA Rice and Ag Groups: Don’t Forget About Asia

    by Deborah Willenborg | Feb 09, 2017
    Michael Rue
    Michael-Rue
    WASHINGTON, DC -- USA Rice joined scores of farm organizations and agricultural companies earlier this week in a letter to President Trump encouraging the administration to seek deeper economic ties with countries of the Asia Pacific region.  The letter follows the withdrawal in January, at the President’s direction, of the United States from the Trans Pacific Partnership (TPP) trade agreement.  “Reducing and eliminating tariffs and other restrictive agricultural policies in this region will help American workers in our sector compete, creating an opportunity to supply Asia markets with high-quality food and agricultural goods,” wrote the groups.
     
    “Access to markets in Asia is absolutely critical to the economic health of the U.S. rice industry,” said Michael Rue, vice chair of the USA Rice International Trade Policy Committee and a California producer.  “The TPP was not ambitious for rice, and we support the administration’s efforts to negotiate bilateral trade agreements in this region.  Japan is obviously first on our list, and we stand ready to assist the U.S. government if the two countries enter into negotiations.”  

    U.S. rice exports to Japan totaled 347,000 metric tons in 2016, valued at $236 million.  U.S. sales represent about half of Japan’s total rice purchases.

    The Japanese government tightly controls rice imports, and USA Rice has long sought improved access in terms of tonnage and the ability to sell directly to Japan’s consumers.  “We look forward to another opportunity to strengthen our position in this vital market,” concluded Rue.
  • Mexico May Move Forward with Viet Nam Trade Deal

    by Michael Klein | Feb 02, 2017
    Let's talk this through
    IP.w-Mexico-May-More-Forward-with-Vietnam-Trade-Deal-170202

    MEXICO CITY, MEXICO -- According to press reports, the government of Mexico (GOM) may move forward with implementing individual bi-lateral trade deals with many of the countries that participated in the now defunct Trans Pacific Partnership (TPP).  These countries include Australia, Brunei, Malaysia, New Zealand, Singapore, and Vietnam.

    “The President has given me instructions to convert the Trans Pacific Partnership Agreements into bi-lateral agreements with all of the countries with whom we do not already have free trade agreements,” said Secretary of the Economy Ildefonso Guajardo.

    Of these countries, the most sensitive to U.S. rice interests is Viet Nam, an unfairly low cost producer of long grain milled rice, and one from whom Mexico has imported rice in the past.  Currently the Mexican import duty is 20 percent, but whether immediately phased out, or eliminated over time, its removal will give the Asian producer a huge advantage in Mexico.  This past year, Viet Nam exported less than 5,000 MT of rice to Mexico; however when Mexico did not have a 20 percent duty (as in 2014), they exported nearly 70,000 MT.

    “This news, along with the talk about renegotiating all or parts of NAFTA, is creating a great deal of uncertainty,” said Brian King, chairman of USA Rice and of USA Rice’s Western Hemisphere Promotion Subcommittee.  “To date nothing has changed or been affected, but the market is nervous as to what might happen in the future, and Mexico is the largest market for U.S. rice.  We are in touch with the U.S. Embassy there and trade partners to get the very latest as this story develops, but I can tell you that anything that disrupts trade between the U.S. and Mexico gives the rice industry pause."

    At 85 percent market share, the U.S. is the major supplier of rice to Mexico and Mexico is the largest market for U.S. rice taking some 800,000 ​MT valued at $260 million.  Most of the rice exported is in rough form, but there is strong and growing demand for direct imports of long grain milled rice.