As rice hits highs, prices declining

The global price of rice has seen a decline of 10 percent in over a year and with that Guyana’s booming rice production may face hardships.

General Secretary of the Rice Producers Associa-tion (RPA) Dharamkumar Seeraj told Stabroek News yesterday in an invited comment that the “movement in prices does have a delayed reaction in getting to us, but it can be both good and bad; there is an advantage and sometimes there isn’t… we do have a lot right now and holding on to supply leading into the next crop is something we want to avoid ideally.”

While Guyana had its highest production in history last year, other global producers have also outdone past productions. Guyana will have to wait and see what the annual PetroCaribe Agreement states to see if the high rice production does in fact have side effects.

Dharamkumar Seeraj
Dharamkumar Seeraj

Seeraj said that of the 532,000 tonnes of rice produced for 2013, approximately 300,000 had been exported to Venezuela, the Caribbean and Europe. He noted that rice consumption has risen annually by one percent across the globe and so the increase in the market has been very positive.

He stated that Guyana’s biggest concern was reaching new markets. He said exports to the Haitian market are developing but Jamaica remains the largest importer of rice in the Caribbean at between 46,000 tonnes and 50,000 tonnes annually.

Seeraj estimated that some 40,000 went to the domestic market, leaving approximately 192,000 tonnes.

Over 200,000 tonnes of both rice and paddy have been shipped to Venezuela under the rice barter component of the larger PetroCaribe Agreement, Seeraj told Stabroek News yesterday. He noted that more is still to be moved by the end of February. He said that millers have kept rice and have moved smaller quantities throughout the Caribbean as they are heavily influenced by the Venezuelan prices.

When asked whether the drop in the global price of rice, which sits at US$447.55 per tonne as of December 2013, would affect the annual negotiation of the PetroCaribe deal, Seeraj stated that it could be a concern. “The Venezuelan deal is complicated; this will have to be worked out—how much rice they need and how much oil we import,” he said, adding that it was not likely that Guyana would be supplying a larger amount of rice but that this could be a by-product of the fluctuating rice prices globally.

Guyana is not looking to stop expanding its rice production, Seeraj said, while noting that, in fact, the country is aiming to produce as much as possible. He said that since Guyana had reliable markets with set prices, the global price would only apply to approximately 50 percent of Guyana’s stock. He said that Guyana was working to cultivate relationships further with the United States, Haiti, Jamaica, St Lucia and Trinidad and Tobago.

Meanwhile, since July of 2013 the global rice prices have steadily fallen from US$538.26 per tonne to the current price of US$441 per tonne. Global suppliers, such as Thailand, Cambodia, Viet-nam, Myanmar and even Colombia have all reported that the drop in price has adversely affected them, leaving them with almost 40 percent of supply still on hand in some cases.

The drop in price correlates with the slide in global demand.

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