U.S. rice interests have eye on Cuba

  • Legislation urged to ease exports

    USA Rice and industry leaders are seeking legislation to remove barriers to U.S. trade with Cuba to ease the way for U.S. rice exports to the island nation.

    The groups are members of the U.S. Agriculture Coalition for Cuba, a group that supports improving agricultural trade between the U.S. and Cuba.

    "USA Rice wants a piecemeal approach to be taken both administratively and legislatively to ease current restrictions on trade, travel, financing, etc., so that Cuba can grow its economy and become a reliable commercial importer of U.S. rice once again," USA Rice's Vice President of Policy and Government Affairs Peter Bachmann said Monday.

    "However, any legislative action that liberalizes the U.S.-Cuba relationship is seen as very contentious among a bipartisan group within Congress because of the political implications for South Florida and Miami, where there's a dense Cuban and Cuban-American population. This makes passage of legislation difficult with a Democrat majority in Congress and close to impossible with a Republican majority."

    Bachmann noted President Joe Biden's administration has not prioritized relations with Cuba as President Barack Obama did.

    "Regardless of whatever administrative actions are taken, congressional action to allow for financing and/or lifting of the embargo are necessary for normal commerce to resume," Bachmann said.

    Major rice consumer Cuba was once a top market for U.S. rice exports, and Arkansas grows nearly half of all rice produced in the U.S.

    Cuba now imports rice from Asian and South American countries, according to a recent USA Rice news release.

    Cuba can currently buy U.S. rice legally if the importer pays in cash up front and uses a third-country bank, such as the Bank of Canada, as an intermediary to allow the exchange of any money, per the Trade Sanctions Reform and Export Enhancements Act of 2000.

    The requested legislation would allow U.S. banks to directly provide financing for Cuban buyers and help U.S. exporters compete for better credit terms.

    Cuba is facing increasing economic pressures brought on by the pandemic.

    Cubans are experiencing shortages of food, energy, medicine and fuel, and recent protests spurred Biden to issue a statement about three weeks ago calling on the nation to respect the right to peaceful protest.

    Cuba's economy is recovering gradually and should show growth this year, but the country's economy is still 7.3% below where it was in 2019, per a July 21 Reuters report.

    The U.S. imposed an arms embargo against the country in 1958 in the wake of the Cuban Revolution, Fidel Castro's rise to power and the establishment of a Socialist state in Cuba. President John F. Kennedy's administration imposed an all-encompassing trade embargo in 1962.

    The U.S. trade embargo cannot be lifted without Congressional approval and remains in place today.

    President George H.W. Bush increased U.S. economic sanctions against Cuba in 1992 following the collapse of the Soviet Union, but offered a path to normalizing relations via significant political and economic reforms, according to the Council on Foreign relations, an independent nonpartisan think tank.

    The U.S. embargo was further tightened and codified in 1996, penalizing foreign companies that do business with Cuba.

    Obama eased restrictions on travel and remittances in 2009, in a move considered the most notable step toward normalizing relations with the country to date.

    The Cuban government approved several economic reforms in 2011.

    Obama and Raul Castro announced plans to restore full diplomatic ties after a prisoner exchange in 2015, though the Republican-controlled Congress at the time vowed to uphold the economic embargo.

    In 2015, Gov. Asa Hutchinson called for Arkansas to position itself to export goods like rice and poultry to Cuba, as Congress considered ending the 50-year-old trade embargo with the nation. In 2016, Arkansas Rice Federation members traveled to Cuba to discuss the future of trade. Then, in 2017, President Donald Trump announced he would reinstate travel and business restrictions.In May, Biden eased Trump-era sanctions against Cuba, focusing on expanding travel and making it easier for families to visit relatives in the country.


  • The USDA increased its outlook for U.S. cotton and rice ending stocks. The domestic rice supply is seen at 33.5 million hundredweight, up half a million from January, with a lower import projection more than canceled out by a decrease for exports. The average estimated farm price is $15.70 per hundredweight, $.60 higher than a month ago. Cotton ending stocks are expected to be 3.5 million bales, 300,000 above last month following a cut in export use. The average estimated farm price is $.90 per pound, unchanged on the month. The current marketing year for cotton and rice runs through the end of July. World rice ending stocks were up modestly from the previous report and global cotton stocks were down slightly. The USDA’s next set of supply and demand numbers is out Wednesday, March 9th. Breakdowns of selected supply and demand tables: 2021/22 U.S. rice ending stocks are seen at 33.5 million hundredweight, compared to 33 million in January and 43.7 million for 2020/21. Imports were cut 500,000 hundredweight to 30.5 million, leaving the total supply at 266 million hundredweight. Exports were cut 1 million hundredweight to 87 million, all of that milled rice, for total use of 232.5 million hundredweight. The average 2021/22 farm price is estimated at $15.70 per hundredweight, compared to $15.10 a month ago and $14.40 for the previous marketing year. 2021/22 U.S. cotton ending stocks are estimated at 3.5 million bales, compared to 3.2 million last month and 3.15 million last marketing year. Exports were lowered 250,000 bales to 14.75 million, putting total use at 17.3 million bales. There was also 50,000 bale swing in “unaccounted” use, from 30,000 to -20,000 bales. The average 2021/22 farm price is estimated at $.90 per pound, compared to $.90 for January and $.663 for 2020/21. 2021/22 world milled rice ending stocks are pegged at 186.33 million tons, compared to 186.06 million a month ago. Production is expected to be 510.31 million tons, slightly more than the prior report, following upward revisions for Brazil and Pakistan. Exports are estimated at 50.86 million tons, compared to 49.86 million last month. 2021/22 world cotton ending stocks are projected at 84.31 million bales, compared to 85.01 million in January. Global production is seen at 120.15 million bales, just over 800,000 less than the last guess, mainly on a cut for India. Domestic use is pegged at 124.43 million bales, compared to 124.24 million last month, and exports are estimated at 46.45 million bales, compared to 46.56 million a month ago.
  • Japan develops stronger appetite for US rice

  • Price supports make domestic varieties harder to afford for eateries

    The U.S. produces about 30% more rice than Japan.

    TOKYO -- Japanese imports of American rice are sharply increasing due to higher prices for homegrown varieties used by restaurants, a result of government measures to prop up domestic rice prices by reducing supplies. Japan caps imports of foreign rice. But demand for the cheaper, easy-to-cook foreign product is on the rise at food service companies.
    Calrose, grown in the U.S. state of California, is the mainstay variety accounting for about 80% of the Japanese market for foreign rice consumed by people as a staple food. Beef bowl chain operator Yoshinoya Holdingsbegan using a blend of Calrose and Japanese-grown rice this past spring, while ramen restaurant operator Kourakuen Holdings uses Calrose for fried rice.
    Less sweet than Japan-grown varieties, Calrose is said to be suited for bowl dishes where sauces are poured on the rice. And since it does not easily stick together when fried, even part-time workers can use it to make fried rice, according to Yumi Kojima, who heads the USA Rice Federation's office in Japan. Japan limits rice imports to an annual 770,000 tons under an agreement reached in the Uruguay Round of global trade talks. Up to 100,000 tons of this can be staple food rice traded under simultaneous-buy-sell arrangements. SBS imports tripled on the year to more than 70,000 tons in fiscal 2016, with much of the demand likely coming from the food service sector. Ahead of bidding in the fall, demand is seen increasing for fiscal 2017 as well, according to an official at a major wholesaler. The U.S. produces an annual 10 million tons or so of rice, about 30% more than Japan, and exports 3 million tons. California accounts for about a fifth of American production and focuses almost solely on medium-grain japonica varieties. The USA Rice Federation has been promoting Calrose in Japan since 2007. The Japanese government has been pushing domestic producers to grow more rice for livestock as a means of supporting prices of staple food rice. Livestock feed rice production in Japan tripled to 480,000 tons a year over the five years through 2016, aided by subsidies of up to 105,000 yen ($944) per 1,000 sq. meters. As a result, prices of rice generally used by restaurants and other commercial buyers have risen to levels near that of the Koshihikari variety, which is popular among consumers and upscale restaurants.

    Prices of Japan-grown no-wash rice have risen 20% in a year in certain cases.

    "Due to the jump in prices of Japan-grown rice, inquiries for Calrose from food service companies have surged," said a manager at food trading company Okura Agri.
  • China will import American rice for the first time

  • The world's largest rice producer is hungry for more and looking to the U.S. for supplies.

    China will import American rice for the first time after a new trade deal was agreed to Thursday.

    "The agreement with China has been in the works for more than a decade and I'm pleased to see it finally come to fruition, especially knowing how greatly it will benefit our growers and industry," said U.S. Agriculture Secretary Sonny Perdue in a statement.

    China produces 20 times more rice than the U.S., but it's also the world's biggest consumer. Recently it has been buying more rice abroad, spending way over $1 billion in some years, to feed its population. Last year, China imported about 5 million tons, according to the U.S. Department of Agriculture (USDA). The U.S. alone couldn't satisfy that demand. America exports between 3 million and 4 million tons a year, according to the UN Food and Agriculture Organization. China was once largely able to feed itself, especially with rice. But it's been relying more on imports in recent years, said Rob Bailey, an expert in food security at Chatham House, a policy institute in London. Rising food imports partly reflect challenges in Chinese agriculture. The rural population is aging, crop yields are low and there are high levels of soil depletion. Pollution and climate change also threaten production. Bailey said China was being smart in finding new sources of rice because temporary export bans from other Asian countries have caused problems in the past. "China's probably thinking, 'If we are going to import rice, let's not be too reliant on the Asian market'," he said. Related: China is crushing the U.S. in renewable energy The USDA said exports to China can begin once Chinese officials have completed an audit of U.S. rice facilities. China's Ministry of Agriculture and Ministry of Commerce did not immediately respond to requests for comment. The breakthrough comes two months after the U.S. Commerce Department announced a dealthat will allow U.S. beef and natural gas exports to flow into China. And it comes in the week that top Chinese and U.S. officials met to talk about trade. Nevertheless, the relationship remains strained. President Trump has called out Beijing for what he considers to be unfair trading practices, and he wants to reduce America's huge trade deficitwith China. This sentiment was echoed by U.S. officials after the Wednesday meetings, with a statement saying there was a "shared objective to reduce the trade deficit" with China. A Chinese statement that came out later mentioned the deficit, but focused on many more issues that the two sides should cooperate on over the coming year. Meanwhile, the issue of steel trade continues to be a delicate matter. Trump's administration may soon slap tariffs on Chinese shipments of steel to the U.S. -- Nanlin Fang and Donna Borak contributed to this report.
  • Agriculture minister says no to FTA changes on rice imports

  • South Korean Minister of Agriculture, Food and Rural Affairs Kim Yung-rok said Thursday he would not concede to any demand for an increase in rice imports from the US when talks begin regarding modifications to the Korea-US Free Trade Agreement.  The agriculture minister said the farming industry had been struggling since the FTA came into effect five years ago, as Korea’s rice prices continue to plunge, with farmers blaming an increase in rice imports.  “It is not a simple task, but I will do what I can to reduce rice imports,” Kim said, during an interview with Yonhap News Agency. “The farming industry has already been damaged by US imports of fruits and other products, so it is not logical for the US to put pressure on our agricultural sector to further open up.”
    South Korean Minister of Agriculture, Food and Rural Affairs Kim Yung-rok. (Yonhap)
    Amid increased production coupled with falling consumption, the Korea Rural Economic Institute predicts the country’s per capita rice consumption will hit a new low of 59.6 kilograms this year. This would mark the first time Korea’s per capita rice consumption falls below 60 kilograms. Korean’s annual rice consumption has halved over the past three decades.  At the beginning of this year, the country’s rice inventory reached 1.83 million tons, far exceeding the United Nations Food and Agriculture Organization recommended 800,000 tons.  “On the contrary, I will try to find out if there is anything that we can demand from the US,” Kim said, adding that rice represents a cultural identity and sense of pride for Korea and therefore should not be seen as a bargaining chip.   US President Donald Trump has blamed the Korea-US FTA for the US’ deepening trade deficit and vowed to modify or terminate the trade deal under his “America First” policy.  US Trade Rep. Robert Lighthizer recently sent Korea’s Ministry of Trade, Industry and Energy a formal request to hold a joint meeting to begin discussions on revising the FTA within 30 days. The Korean government responded by saying the timeline may not be realistic, as the country has not yet appointed its new trade minister. An official date for the FTA revision meeting has not been set. 
  • U.S. Rice Exports Shine in 2017


    Grain Ships on the River NOLA
    ARLINGTON, VA – Despite the tough market situation faced by U.S. rice farmers this year, exports of U.S. rice remain a bright spot for the rice industry as a whole.  During the first 5 months of CY2017, total U.S. rice exports (converted basis) were 23 percent ahead of exports during the same period of 2016 in volume and 10 percent ahead in value. Lower prices are making U.S. rice more competitive overseas, and USA Rice international marketing and promotional initiatives are capitalizing on this price downturn to maintain and grow sales in what has been a very competitive world marketplace.  “Competitive prices are motivating our overseas customers to take a fresh look at U.S. rice,” said Hugh Maginnis, USA Rice Vice President International.  “The export promotion activities we implement in coordination with our FAS partners have helped boost consumption and imports of U.S. grown rice in just about every international market we service.” Examples of strong export performance for U.S. rice in CY2017 can be found almost everywhere. In Mexico, the number one market in both volume and value, where USA Rice conducts more than 300 marketing activities annually, exports are up by about 20 percent in volume and three percent in value over the previous year.   In Haiti, exports of U.S rice are up 26 percent in volume and 11 percent in value, bolstered by targeted USA Rice TV and radio advertising and promotions. Exports to the UK market have grown 49 percent in volume and 19 percent in value so far thanks in part to targeted billboard advertising, trade magazine testimonials, and growing sales online and with independent retail outlets. Exports of long grain parboiled and medium grain rice to Saudi Arabia are booming, up 46 percent in value and 48 percent in value, due to aggressive billboard advertising outdoors and in the shopping malls.  Jordan is a market with even better performance, with U.S. medium grain sales up 79 percent in volume and 65 percent in value. U.S. exports of medium grain to Japan have taken a record 77 percent share of the SBS quota, as targeted foodservice promotions educate consumers about the versatility and taste of U.S. medium grain. “These trends point to a strong export performance for the remainder of the year” said Maginnis.  “While this optimistic scenario can change due to a number of factors, the momentum in the export market is in our favor.   More U.S.-grown rice is heading to the tables of our overseas customers, providing fresh opportunities for a diverse global consumer market to experience the quality, consistency, and value of USA Rice.” 
  • U.S. long grain rice prices remain bullish going into acreage report

    Rice harvest

    U.S. long grain rice prices remain bullish going into acreage report

    USDA’s June 30, 2017 acreage report will relieve some of the U.S. long grain rice market uncertainty.
    I remain bullish on U.S. long grain rice prices. USDA’s June 30, 2017 acreage report will relieve some of the U.S. long grain rice market uncertainty. The dynamics and complexity of the U.S. long grain rice market is being driven by a collection of UNCERTAINTIES ASSOCIATED WITH:
    • Nagging domestic and global growth, raises food security concerns, which, in turn, tends to raise protectionist barriers;
    • Lagging fiscal, trade and regulatory policy response, causes deflationary forces to regain lost momentum and place downward pressure on many commodity markets.
    • Bidirectional domestic and global monetary policy verbal guidance, creates confusion among market participants and enhances market risk.
    • Domestic and global rice and grain fundamentals; related to 2017 acreage, yield, production and quality.
    • Currency dynamics; hedging against currency risks becoming increasing challenge.
    • Intensifying global geopolitical uncertainties – means global exporters, especially rice exporters, find themselves facing a historically, post-World War II, unpredictable global business environment, due to economic, social, and political change.
  • U.S. paddy allowed unhindered access into Colombia

  • This resolution follows on the heels of a June 1resolution which removed the phytosanitary pest Tilletia horrida from Colombia’s official pest list. ICA conducted a study that found that tilletia horrida is already present in various locations in Colombia. The study, which collected 54 samples from farms and mills, found tilletia horrida in 92 percent of the collected samples.

    On June 6, the Colombian Agricultural Institute (ICA) published “Official Resolution No. 6705 of 2017” which removed a previous resolution that restricted imported U.S. paddy rice to the port of Barranquilla. The previous resolution also implemented phytosanitary measures for the transportation of U.S. paddy rice and for the management of residues (such as husks) after being milled in Colombia. These mitigation procedures and restrictions to one port in Colombia are now null and void. This resolution follows on the heels of a June 1resolution which removed the phytosanitary pest Tilletia horrida from Colombia’s official pest list. ICA conducted a study that found that tilletia horrida is already present in various locations in Colombia. The study, which collected 54 samples from farms and mills, found tilletia horrida in 92 percent of the collected samples. “This is excellent and long-awaited news,” USA Rice Chairman Brian King said. “By removing the restrictions on U.S. paddy rice and allowing it to enter any maritime port, U.S. rice will be more competitive in the Colombian market.” In June of last year, USA Rice led a trade mission of 10 people to Colombia to meet with ICA and stress the importance of concluding the study in a timely manner and improving access for U.S. rice. Within three months of the visit, ICA agreed to reduce the mandatory minimum grain moisture content of U.S. rough rice, one of the required mitigation procedures. “USA Rice has been working with APHIS and FAS since 2012 to remove these restrictions on U.S. paddy,” USA Rice President and CEO Betsy Ward said. “We are thrilled to see that everyone’s hard work has finally paid off.” Last year, the U.S. exported 140,000 MT of rice valued at $58 million and more than 40 percent was paddy rice. Colombia, our 51st largest market prior to the U.S.-Colombia Free Trade Agreement, has become one of the top fifteen U.S. export markets for the past four years.
  • Iraq Makes First Purchase of U.S. Rice under the U.S.-Iraq Memorandum of Understanding

  • Iraq Makes First Purchase of U.S. Rice under the U.S.-Iraq Memorandum of Understanding

    May 30, 2017
    Destination: Iraq
    Iraq Makes First Purchase of US Rice, Port of Lake Charles
    ARLINGTON, VA -- With help from a last minute, full-court press by USA Rice involving Congress, the U.S. Embassy, and high-level State Department and U.S. Department of Agriculture (USDA) officials, Iraq made its first-ever purchase of U.S. rice under the U.S. – Iraq Memorandum of Understanding (MOU).  This sale will help U.S. rice exporters gain a foothold in the Iraqi market, and heightens prospects for new sales in the future.   Iraq’s precedent-setting purchase of 30,000 MT of U.S. long grain milled rice comes after more than 16 months without any Iraqi purchases of U.S. rice.  “We are very pleased to see that Iraq has stepped up to meet its commitment to purchase U.S. rice under this agreement,” said USA Rice President & CEO Betsy Ward.  “This could not have come at a better time for the U.S. rice industry, and we are grateful for the cooperation of the Iraqi Grain Board (IGB) and the Ministry of Trade (MOT), and are confident that this transaction will mean more Iraqi purchases of U.S. rice in the near future.”   The 30,000 MT sale for July delivery was awarded to ADM, and comes almost a full year since the MOU was negotiated between the MOT and the U.S. Embassy in Baghdad.   “The USA Rice team, including our local office in Iraq, worked hand-in-glove with Congress, the State Department, and USDA over the last year to keep the pressure on, ensuring that Iraq follows through on its commitment to purchase competitively-priced U.S. grown rice under this MOU,” said Hugh Maginnis, USA Rice vice president international.  “We appreciate the teamwork and persistence of so many people who contributed to this successful sale.  This gives our rice farmers a very welcome shot in the arm.”
  • Uncertainty about U.S. long grain rice acreage supportive of prices

  • Domestic and global rice fundamentals remain bearish while U.S. acreage decrease may help firm near-term prices. More at: Presently, I am