Rice farmers look to 2013: A potential Chinese market?

Draft protocol is being updated and adjusted for Chinese review.

By Dwight Roberts
President and Chief
Executive Officer

Let’s talk about a subject that would have been a dream just a few years ago. Yes, this is not your grandfather’s market.

China: Are you kidding me?

We know China as the world’s largest consumer and producer of rice, so why an interest in U.S. rice? We have seen China importing rice in recent years, a trend that has grown to over one million tons during 2012 – three times more than the previous year. We knew we could not compete for the large bulk market, but funding awarded from the USDA’s Foreign Agricultural Service to USRPA under the Emerging Markets Program acknowledged the positive feasibility of such an effort, according to USDA specialists based in China.

For the next seven years, extensive market research activities such as in-store tastings, consumer surveys and interviews with importers were conducted in a number of upscale supermarkets of large cities. The results told us that higher income consumers have a strong willingness to purchase high-quality prepackaged U.S. rice.

In September of last year, the USRPA hosted the Chinese government quarantine and inspection officials to the USA to visit all aspects of our rice industry. The group visited the rice states and returned home to assess its findings.

In November 2011, the USRPA hosted two major Chinese importers who are anxious to get their hands on high-quality packaged U.S. rice. Mr. HeZhiZhong from China Resources Vanguard Co., Ltd. and Mr. Alan Zhang of Aeon Co., Ltd. represent large business conglomerates. Aeon, a one-trillion-dollar company operates some 1,537 supermarkets.

Last month in California, a meeting of the USDA’s APHIS and the Chinese counterparts produced a draft protocol, which was shared with numerous rice mills to gain feedback to APHIS. The bottom line question to our mills, “Can you feasibly ship rice to China under these conditions?”

Mills Consider Chinese Draft Protocol

At the encouragement of the USRPA, an initial conference call between our mills and APHIS was conducted. While some mills feel the Chinese draft is quite doable, other mills see a number of obstacles in this first protocol draft. The next step, according to APHIS, will be an updated and adjusted protocol version going back to the Chinese for their review.

With input from U.S. rice mills, APHIS and a positive overall joint effort to resolve what are considered by many to be minor obstacles, we could have access to a new market in 2013 that is calculated to be some 250,000 tons of U.S. milled rice.

As commented Mr. HeZhiZhong from China Resources Vanguard, “We look forward to having U.S. rice in our stores. The initiative of USRPA has been an instrumental aspect of this entire effort, and we expect continued progress to a successful protocol. Greg Yielding and the board of directors of the USRPA deserve all the credit for making this project a reality, and American rice farmers should be proud.”

For more, visit www.usriceproducers.com.

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