Guyana and Venezuela last evening inked a US$18.8M ($3.7B) rice purchase agreement that will see 50,000 tonnes of locally produced rice being supplied to that country in the next few months at a price higher than current export prices.
Within five days a team is expected to arrive from Caracas to inspect and look at all the other considerations so exports can commence, Minister of Agriculture, Robert Persaud said at the signing ceremony at the Ministry’s boardroom. “We wish to have the first shipment leaving Guyana in the first week of November and there will be about ten shipments with the last shipment being the first week in February”, he said.
The minister disclosed that initially, 10,000 tonnes of white rice and 40,000 tonnes of paddy will be exported and “this is a first agreement and we will be exploring other agreements once we are able to finalize and realize this agreement”. The agreement was signed last evening by General Manager of the Guyana Rice Development Board (GRDB), Jagnarine Singh and Head of the Corporation of Supplies and Agricultural Services (CASA) of Venezuela, Colonel Rudolpho Marco Torres. GRDB will be facilitating the exports.
Persaud said, in the agreement, the export price for paddy will be US$330 per metric tonne (covering cost and freight) while for the “five percent broken” white rice, the cost will be US$560 per tonne. “These two prices represent a very substantial percentage above what we see taking place in the market from export and if we look at the trend…” he asserted.
The minister stated that the agreement culminates two months of work, which had its genesis in a stakeholders meeting where it was recognized that this year, Guyana would have the highest production in its history. “We further recognized that we needed to expand and diversify our market”, said Persaud. A number of potential markets within South America and the Caribbean were identified and with world prices for the staple low, there were concerns that farmers would not get the type of payment for the paddy that would cover the cost of production, Persaud stated. He said that government started a number of initiatives including providing $400M for farmers.
He pointed out that alternative markets where a better price could be obtained so millers and exporters could be in a stronger position to pay farmers were sought and President Bharrat Jagdeo met Venezuelan head of state, Hugo Chavez at the United Nations General Assembly. There, a decision was reached that for this crop Venezuela will buy up to 55,000 tonnes of rice, Persaud disclosed. He said that this is the first agreement of this kind between the two countries and Colonel Torres is looking beyond rice.
Also making brief remarks at the ceremony last evening was Colonel Torres and Venezuelan Ambassador to Guyana, Dario Morandy as well as General Secretary of the Guyana Rice Producers Association, Dharamkumar Seeraj.
It is unclear how this deal will affect commitments to other markets. (Gaulbert Sutherland)
