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Colombia has become a potential
growth market for U.S. rice
exports, following the implementation
of the U.S-Colombia
Trade Promotion Agreement (TPA) this
year. As required by the TPA, an export
trading company, Colombia Rice Export
Quota, Inc. (COL-RICE) was established
to administer the tariff-rate quota (TRQ)
for U.S. rice imported by Colombia.
The Board of Directors of COL-RICE
is made up of 16 members – eight from the
United States and eight from Colombia.
The U.S. board members consist of
six producers, one from each of the
rice-producing states, one miller and
one merchant.
50-50 Net Revenue Split
The licenses to import all 79,000 tons
for the 2012 tender were successfully auctioned
with an average price of $91.33 per
metric ton. The first shipments arrived in
Colombia at the end of November, and all
of the TRQ rice is expected to arrive by
the end of the calendar year. The 2012
TRQ brought in $7.2 million in gross revenue;
net revenue is expected to be
announced and distributed in early 2013.
The cost of establishing and administering
COL-RICE will be deducted from the
gross revenues. The net revenue will then
be divided evenly (50-50) between
Colombia and the United States. Colombia
has indicated that they will be using
their share to invest in modernizing their
local rice industry.
The United States will divide its share
among the six state rice-research boards
based on their average rice production
from the past three years (the distribution
formula stated in COL-RICE’s bylaws).
Each state will use the revenue to conduct
traditional rice research.
How The TRQ Works
The TRQ amount increases yearly at a
rate of 4.5 percent until it is eliminated in
2030. The out of quota tariff rate remains
at 80 percent for the first six years (until
2018), after which it will decrease by
about six percentage points per year until it
too is eliminated in 2030. The
2013 auction will be held Feb.
4-6, 2013, for 82,555 MT
(milled basis).
The opening of the Colombia
market will provide a significant
and stable market for
U.S. rice and will have the
added benefit of supporting
research initiatives in the individual
rice-producing states.
With federal rice research
dollars declining, this is a
welcome source of revenue
that is essential to keeping the
U.S. rice industry competitive
in the global market.
To learn more, visit www.usarice.com. |
