What appeared initially to be promising rice supply deals between local millers, Nand Persaud & Company and three external markets, including Cuba, now appear to have collapsed under the strain of what the local company says has been those markets’ failure to meet payment agreements in a timely manner.
Earlier this week, during an interview with the local firm’s Chief Executive Officer, Mohendra Persaud, the Stabroek Business learnt that the Berbice rice export giant had ceased shipments of rice to Cuba which had commenced in 2017 under an agreement which the company had reached with that country’s state-run entity ALIMPORT.
Persaud told Stabroek Business that the company had sold approximately 7,000 tonnes of rice to Cuba, through ALIMPORT in 2017 and had received payment for part of the shipment leaving an outstanding balance of US$600,000. He said that his 2019 visit to Cuba to follow up the matter had come following “many letters and phone calls.” According to Persaud, during his visit to Cuba a formal agreement had been reached with ALIMPORT that Cuba would pay the local rice milling company, US$200,000, representing the cost of the rice as well as shipping costs and that costs of interest and profits accruing to Nand Persaud and Company would be waived.
While, up to March this year, the local company had been in communication with both the Cuban Ambassador to Guyana and his opposite number in Havana, both of whom had signaled their preparedness to pursue the matter, there had been no movement on the outstanding payment.
One of the knock-on consequences of the Cuba payment default is that an agreement under which Nand Persaud had committed to set up a rice milling facility in Cuba would now appear to have been shelved.
In the instance of Panama, Nand Persaud said it is to the Guyana Rice Development Board (GRDB) that the company is looking for the settlement of a $260 million payment accruing for rice supplied to the GRDB for shipping to Panama in 2017. Persaud told Stabroek Business that his many letters to the GRDB, the most recent of which was sent in February this year have borne no fruit. The GRDB Head told Stabroek Business that the company had proposed to the Rice Board that the debt be liquidated under an arrangement where, for every tonne of rice the company exports part of the US$8.00 per tonne in export tax accruing to the state, be retained by Nand Persaud against the liquidation of the debt owed by the GRDB until the full amount of the debt is exhausted. Up until now there has been no movement on this proposal.
In the instance of Trinidad and Tobago, the Nand Persaud CEO told Stabroek Business, that the company had been informed by individual private buyers in the twin-island republic that they are unable to make payments for rice on account of what they say is the ‘squeeze’ on foreign exchange which businesses are now experiencing.
Since late last year there had been reports that multiple importers and manufacturers whose products are sold on the local market were complaining that the availability of foreign exchange to pay for goods, including raw materials imported into the country, was approaching crisis proportions. Subsequent reports out of Port of Spain suggest that the situation may have worsened since then.
Persaud told Stabroek Business that the company had noted that while some businesses had been timely in meeting the understood sixty-day deadline for making payments, others of its customers had been considerably delinquent, some taking between three and nine months to settle their debts. “We have businesses that have outstanding payments for two years and more,” Persaud said, adding that in some instances the company has had no option but to cease sales of rice to serious delinquents.
