Friday, April 12, 2024

A brave new world

Our industry must aggressively campaign to promote U.S. rice.

By Sarah Winnan Moran
International Promotion
USA Rice Federation

For more than 15 years, the United States has enjoyed a robust market share in Latin America. A logistics advantage, strong contract performances and the ability to promptly ship specific quantities (including rough rice) enabled the United States to be the logical supplier for Latin America. However, more recently, the United States is losing ground in Latin America as rice from other origins enters the market at competitive prices.

More than 60 percent of all U.S. rice exports are shipped to the Western Hemisphere, totaling nearly $1.2 billion. Ten of the top 15 export markets are located in the Western Hemisphere, a vital region for U.S. rice in which the USA Rice Federation has been conducting promotions and trade servicing for 15 years.

Vietnam Threatens U.S. Rice Exports

But Asian imports are becoming a real threat to U.S. rice exports in the region and recently in Mexico, our No. 1 export market. Pakistan exported over 2,000 MT of rice to Mexico in the first two months of 2013 (more than in 2012), and there are rumors that 20,000 MT of rice from Pakistan has been contracted. While Pakistani rice exports to Mexico this year represent less than 10 percent of Mexico’s milled rice imports, it underscores that Pakistan could become a competitive player in Mexico, which is concerning, although the larger threat is Vietnam.

Vietnam is the second-largest global rice exporter and produces nearly five times more rice than Pakistan. They conduct aggressive marketing campaigns and sell substantial amounts of rice in the Caribbean, including about 400,000 MT to Cuba. In bilateral talks in December 2012, Haiti and Vietnam developed a strategic investment partnership focusing on food security, agriculture and other mutual interests. Those talks produced an agreement allowing for the purchase of 300,000 MT of milled long-grain rice from Vietnam, with a shipment of 15,000 MT arriving in Port-au-Prince last month. This has serious, likely negative, implications for U.S. exports to Haiti, which last year was the second-largest export market.

Three-Point Proactive Approach

There are three things the U.S. rice industry can do to combat this new world. First, U.S. rice must build upon its image abroad as high-quality, reliable and safe, and this must be highlighted in effective promotions. Pakistani and Vietnamese imports don’t currently threaten that image, but the Vietnamese government is beginning to focus on quality.

Many Vietnamese farmers began planting high-quality rice this year in the hopes of corresponding high prices, but prices are slightly lower than last year. If the Vietnamese government develops a longterm rice stockpiling policy that rewards farmers for planting high-quality rice, then the U.S. market share and image will be severely challenged.

Secondly, the U.S. must ensure a level playing field so that government regulations are equal and fair for all. If inconsistencies are found, substantiated allegations must be raised to the appropriate level. Finally, the rice industry must accept and adapt to this new world, acknowledging that none of our export markets are guaranteed. That doesn’t mean that we passively watch market share decline, but instead embark on an aggressive campaign to promote our rice rather than criticize theirs.

USA Rice is adjusting its programs to face this new reality. For example, we are establishing partnerships with Mexican millers and packers who sell 100 percent U.S. rice to increase consumer recognition of its value. USA Rice is committed to tackling this growing threat by boosting promotional efforts in key markets.

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