The paddy price is falling
Harvesting of the present rice crop has commenced in Region Two, in the central parts of the Essequibo Coast. The exercise is moving apace in the southern sections. The paddy is somewhat infested with red rice, and farmers are not optimistic that the prices will not decline further from the present price of $3000 for the highest grade.
It is reported that the price has fallen from $4000 to $3000 for a bag of Extra Grade paddy. This trend which was non-uniform in the past has had more serious consequences for the rice farmers recently. Guyana is the Caribbean’s main rice producer, and last year faced a serious threat to its earning position as other rice producing countries began offering more competitive prices.
It is not clear what is responsible for this drop in paddy prices. It was reported that there is a lot of the last crop rice in the millers’ warehouses, and with the current trend it is expected that at some point these prices will level off.
The implications for rice farmers could be quite serious indeed. Rice farmers will have to expect that these falling prices will soon carry over into this year’s market and will inevitably threaten the comparatively high prices previously being enjoyed. In addition, if rice from outside sources enters the Caribbean markets, Guyana producers will have grave difficulty in competing with them. The farmers will have to pay greater attention to cost of production as well as efficiency. However, with the high stocks in the country, a cutback in production will not provide a temporary reprieve, as the release of stocks from other countries will further add to the pressure on the low prices.
The outlook for the 2014 rice crop is quite uncertain at the moment. Guyana has been expanding its rice production; however, recent changes in the international arena and trade liberalization could eliminate or at least sharply reduce Guyana’s access to rice export markets. It is prudent to draw attention to the recent revelation that millers are engaged in low price fixing.