Guyana trying to tie up small rice opening in Belize

With a large amount of rice on hand from bumper harvests, Guyana is trying to sew up a small market in Belize and aiming elsewhere.

The Guyana Rice Development Board (GRDB) has been thrust into the responsibility of marketing Guyana’s rice overseas according to the General Secretary of the Rice Producers Association (RPA), Dharamkumar Seeraj.

Seeraj told Stabroek News that GRDB General Manager, Jagnarine Singh was recently  in Belize to work out a rice export arrangement between the two nations to assist with the movement of over 100,000 tonnes of rice currently on hand in Guyana. He said that with the excess stock on hand and the slumping global market prices, farmers will most likely have to settle for lower paddy prices in 2014. The amount on hand was left after the major Venezuelan market quota was filled.

He said that in the continued efforts to find additional markets to export Guyana’s rice, the GRDB has had to take on that responsibility. He said that there was a lack of organized rice farmer and miller associations throughout Guyana that could take on this responsibility. Seeraj was speaking on behalf of the RPA which has been the premier representative of farmers in the industry.

Singh said it was his opinion that “Belize is likely to be a small market for us…Belize is a rice producing nation but whatever their need, whatever their shortfall will be depends on their level of production. Our indication is that 3,000 to 5,000 tonnes will be the market…”

Seeraj denied reports that Guyana was hoping to establish a 5,000 tonne a month deal with Belize stating that right now any arrangements were dependent on Belize’s capacities. He said that Guyana has been able to ship over 20,000 tonnes of rice that was left over from 2013, which saw rice production at an all-time high exceeding 532,000 tonnes, to markets outside of Venezuela.

The head of the RPA stated that while exports have gradually been leaving Guyana there was still tonnes of rice that needed to be moved to allow for the influx into the market of paddy from the 2014 first crop.

He acknowledged that unfortunately for farmers 2014’s paddy prices are not likely to be set at $4,000 per bag as traditionally expected.

Seeraj told Stabroek News that some millers were already pricing paddy at $3,100 to $3,400 per bag. He said that the reality of the situation was since Guyana signed on to the Venezuelan rice agreement in 2009 under the PetroCaribe oil deal farmers and millers have gotten used to a high price market.

He said that “Our farmers have become accustomed to the high price market and that obviously has implications. The reality is your major markets are not going to be our major markets (forever). Our increased production has changed, not the Venezuelan situation”. He continued that major markets globally including the rest of the Caribbean and Europe will not be buying rice at high prices and will stick to global prices, which millers have already realised.

Globally speaking, Seeraj noted that per tonne of white rice millers can expect to sell at US$515 to US$550; the European market calls for semi milled rice which means that Europe can import globally for less than US$400 per tonne. Seeraj noted that the parboiled packaged rice made the most however this was not Guyana’s sub section of the industry.

He said that with the just under 100,000 tonnes of rice on hand since February of this year, millers cannot sell to recoup the cost of buying paddy for $4000 per bag in 2013. He noted that millers were concerned with their profits and as a result that would trickle down to farmers. Guyana’s bumper harvest means that unfortunately the market is saturated which does not give farmers and millers much leeway on prices.

Seeraj said that “the reality is that I am saying based on the situation farmers can expect $3400 to $3800 per bag of paddy”. He added that just because that is the recommendation does not mean that millers will not try for lower prices in order to recoup costs from 2013.

He acknowledged that while rice was moving, since February to March, Guyana had on hand just under 100,000 tonnes of rice to move and there has been no significant strides in sourcing additional markets. He stated that Guyana was still in talks with Haiti but that since cost was the most important factor in private deals with Haiti, Guyanese farmers and millers were reluctant.

In February, Stabroek News was made to understand that Jamaica may be open to  higher rice imports. There has been no confirmation of any ongoing talks from the agriculture ministry to suggest this was successful.

The bumper rice output has been fuelled by the PetroCaribe deal with Venezuela but with a fixed quota of around 200,000 tonnes of rice it means that a lot of excess rice still has to be sold to other markets. Political unrest in Venezuela has also raised concerns about the stability of the Venezuela deal.

 

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