What is in this article?:
- Record U.S. rice acreage in 2010.
- Fallout from poor quality 2010 rice crop a concern.
- Expectations for rice lag behind more bullish commodities.
Current opportunities for U.S. rice compose “a mixed bag. In Iraq, we’ve missed the last three tenders — they’ve gone to South America, to Vietnam, to Thailand. The Vietnamese and Thais, particularly, have a freight advantage on us. We need some of that Iraqi business, in my view, to disappear this crop.”
However, exporting poor-quality rice to reliable customers could bite the United States. Brothers pointed to Haiti as an example. “There is a vessel now loading out of Uruguay that is going to Haiti. It has my attention for two reasons: one, it’s cheaper than what we’re currently selling; and, two, the quality of the South American crop is good. (Meanwhile), we have some of the worst U.S. rice I’ve ever seen.
“I’m worried that when that rice hits, the Haitians will get very upset in the difference between South American and U.S. rice. It couldn’t be a worse time for Uruguay coming into the Haitian market.”
Brothers lamented the lack of movement on trade with Cuba, potentially significant importer of U.S. rice. Brothers and colleagues were recently in Washington, D.C., where “we talked to everyone we could (and Cuba) came up at every turn. Everyone says it should happen — but it just keeps not happening.
“We thought (with) President Obama’s election … we had our best opportunity to open up Cuba. It hasn’t turned out that way. Forces are just more powerful, apparently, than we realized. I don’t know what we’re going to do.”
China is more of bright spot, said Brothers. While unlikely to buy “a lot” of U.S. rice, “there is a segment in China that will buy ‘luxury rice’ — nicely packaged, good quality rice. … But China doesn’t have a phyto-sanitary protocol with the United States. Right now, it’s illegal for us to ship rice to China. That makes no sense. As much as we import from China, we can’t get a phyto-sanitary protocol resolved?
“I’m told it’s over (a) beetle. We’ve heard that packaged goods have come into the United States from China where the beetle has been found in wrappings.”
Nigeria is another positive for U.S. rice. “The Indians have put a ban on exporting rice. They were a big player in parboiled rice in Nigeria. That has forced the Nigerians to return to the United States for parboiled rice.”
Brothers closed with news that the USDA is investigating potentially illegal Brazilian rice subsidies.
“I was first aware of that about a week to 10 days ago. … It was reported to me that it’s an export subsidy, which is illegal. We said, ‘we can do them (on this), what they did to cotton if we can prove it.’
“I’m told it’s $60 per ton … (and is) under investigation by the USDA, at this moment.”