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Central American rice buyers seek quality

One idea is to ship single varieties of rice as approved by the buyer.


By Dwight Roberts
President and Chief
Executive Officer
USRPA
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In 2012, 15 percent of all rice exports were destined to Central America. Consisting mostly of rough rice for processing in local mills, the region has purchased an average of 570,000 metric tons over the past five years – the harvest from about 200,000 acres.

The five CAFTA countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua have relied on U.S. rice to fill the demand for high-quality milled rice in each of their markets. It has not been working. One mill even purchased rough rice from Brazil last year in an effort to produce a product demanded by the market.

In fact, there were unhappy BIG buyers, and preservation of the market for U.S. rice farmers became a major focus of the US Rice Producers Association. Since October of 2010 in a meeting with the Central American Rice Federation (FECARROZ) board of directors that was held in Leon, Guanajuato, Mexico, and again in December of that year in San Antonio, Texas, the USRPA began to address the cause and solution with the buyers.

The USRPA organized a meeting in San Jose, Costa Rica, in October of 2011, inviting USDA, U.S. exporters, grading companies and representatives of the USA Rice Federation to address the issue and discuss quality and grading procedures. An additional meeting was held in October 2012 in Kansas City with the FGIS.

Consumers Dissatisfied

In January, representatives from the Central American mills traveled throughout the Mississippi River Delta to gain a better understanding of how U.S. rice makes its way from the farm to their home destination ports. They learned that by the time orders arrive at the final destination, there are as many as 20 varieties of rough rice mixed together. This has made it difficult for them to properly process the rough rice into high-quality milled rice demanded by their consumers. With different sizes, tastes, cooking qualities and cooking times, local consumers were refusing to buy U.S. rice. This resulted in significant losses for many of the mills. The 2010 rice crop raised the problem to new and unwelcomed levels as high nighttime temperatures and heat stress resulted in high chalky grain content and very low milling yields.

Shipping Identity Preserved Rice

After much discussion and research on both sides, a lot has been learned about the different rice varieties grown in the United States and their characteristics. A solution proposed by a farmer group in Arkansas is to ship single varieties of rice as approved by the buyer – so that they get what they pay for. The USRPA is working with the U.S. exporters of rice to find a logistical solution to ship “identity preserved” rice to our Central American customers.

Carlos Gonzalez Argüello, president of FECARROZ and a rice miller from Costa Rica, is encouraged with the developments, stating, “We sincerely appreciate that the USRPA understands our serious concerns and that a seller must sell his customer what they want to buy.”

In late February, a team of buyers returned to the northern Delta to make further progress on origination and logistical issues, and, as we go to press, there is more than one shipment underway based on “variety specific” origination and identity preservation while in transit.

From 2008 to 2012, mills in Central America have purchased $1.1 billion of U.S. rice. They need to receive rough rice they can process into high-quality milled rice for their local markets. Likewise, U.S. rice farmers need to be rewarded for producing quality rice, and keeping varieties separate to service those buyers. It looks like a “win-win” is possible now.

For more, visit www.usriceproducers.com.

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