Notes

Hon. Robert M. Persaud, MBA, MP

Minister of Agriculture

 

Press Conference to provide an update on:

SITUATION ON RICE INDUSTRY AND TRADE ISSUES

Global situation with rice

·        World's rice stocks to their lowest levels in 30 years-less than half of where it stood in 2000-prompting the UN Secretary General to warn of millions facing starvation

·        Average prices for rice have doubled over the last five years, and have high a 20-year high this month

·        The price of medium-grade Thai rice, a market benchmark, has skyrocketed from $360 a metric ton at the end of 2007, to $795 a ton last week, and is expected to hit $850 this week and $1000 over the next three months.

·        Cambodia joined Vietnam, India, and Egypt in curbing or halting outright their exports of rice, fearing that they won't have enough to feed their own populations. They blamed the recent rice price hike on surging demand in Africa and the Middle East.

·        Manila's top 100 companies were forced to begin rice farming by the central government

·        In Thailand, the world's top rice exporter, rice farmers are hiring guards to protect their crops from bandits. Over 90% of the country's rice crop now goes to domestic consumers.

·        Unrest in many countries over the price of rice. A senior Russian grains management official disclosed that his country was never in this situation ever.

·        The USDA recently predicted that global rice production for 2007/8 would fall three million tons short of demand, even while global rice stocks stand at 4% below last year--the lowest level since 1984.

·        Floods and heavy rains in Bangladesh, India, Indonesia, Vietnam, North and South Korea, and the Philippines all put the hurts on their crops. The coldest winter in recent memory in China, coupled with water shortages, will put a dent in their production this year too. Drought in Australia has cut supplies for medium and short-grain rice.

·        Nathan Childs, an economist with USDA's Economic Research Service, can't recall a rosier price projection for rice since he began presenting outlooks at the USA Rice Outlook Conference 12 years ago. It's a small market, only about 12 percent of the global trade, but the United States would like to gain market share.”

·        Wheat for which rice and other grains are being used as substitute inventories are at a 30-year low. Stores in the European Union have plunged from 14 million tons to a mere 1 million just in the past year

·        In general, global reserves of grain now stand at a mere 1.7 months' worth of consumption...down from 3.5 months in 2000.

·        The rise in price hasn't been limited to rice. Corn, wheat and soybean futures all set new records on the Chicago Board of Trade this year. Corn has nearly tripled in price in three years. Spring wheat quadrupled in a year (and has since become increasingly hard to get), and soft wheat doubled. Soybeans have tripled in about a year.

·        According to the United Nations' Food and Agriculture Organization (FAO), here's what happened to the worldwide cost of food during 2007:

Grains:+ 42%

Edible oils: +50%

Dairy products: +80% percent.

In U.S. food prices have increased by:

Milk: +17%

Cheese: +15%

 Rice and pasta: +13%

Bread: +12%

 years.Eggs: +62% percent in the past two

Ensuring adequate supplies for local market

·        Increased production thus enabling maintenance export markets

·        Constant monitoring of rice supplies and exports to ensure adequate supplies for the local market

·        NGMC will expand its rice price buster campaign to ensure supplies and maintain stability in rice price across the country

·        Millers and farmers have expressed support to ensure adequacy of supplies for the local market. One case where a farmer sold

·           

 

No ban on rice exports

·        Adequate supplies for our traditional markets, particularly CARICOM

·        Tighter monitoring to ensure adequacy of supplies and exporters and millers have committed to this process

·        Exports actively taking place

Quotas for broken rice export

·        Quotas are being determined for the export of broken rice to ensure adequate supply to local feed industry

·        A total ban on the export of rice bran

Adjustment in Export Commission

Section 45.2 of the GRDB Act states: The Board may with the approval of the Minister, charge fees for certifying the quantity, quality or both of any quantity of rice under subsection (1).

Export commission -

a.       Export of bulk cargo rice from US$6 to US$10 per tonne

b.      Export of bulk polished white from US$6 to US$9 per tonne

c.      Export of packaged rice (10 kilos package and below)  from US$6 to US$8 per tonne

d.      Export of broken rice from US$2 to US$5 per tonne

The existing export commission was charged when the average export price for rice was about US$250 per tonne; today the average export price is about US$650 per tonne  

This adjustment will take effect for all contracts and export arrangements to be undertaken from tomorrow and will last for the current rice crop. The rate of the commission will be reviewed at the end of this crop.

Rationale:

·        Resources Restructure and modernize the GRDB operations

·        Improve rice trade and industry development capacity of the Board to support the industry 

·        Better extension service to farmers to improve yield, quality of seed material and adequate research support

·        Assist in various interventions to cushion the effects of rising rice price on Guyanese consumers

This would not affect the price for paddy for our farmers. Also, this may further ensure that the local market is adequately served at an affordable price. 

Rice levy are charged in many countries, the most recent one is Pakistan.

1.      China has export taxes ranges form 5-25 % on food grains. Process rice is 10%

2.      Australia have export taxes, they also have a 2% interest on payment when it is late.

 

GUYANA EXPORTS 2004-2002 (TONNES)
Country	2004	2005	2006	2007
European Union
Belgium	2,472	3,823	760	2,624
French Guiana	3,426	2,520		0
Czech Republic	186	0	-	0
Guadeloupe	3,171	3536	3,502	3,515
Germany	2,359	0	-	6
Holland	47,888	43,970	56,463	69,130
Martinique	2,129	2,020	2,101	2,583
Portugal	43,793	36,268	34,400	59,161
Poland	0	0	299	0
Spain	5,000	0	-	0
United kingdom	5,355	0	3,678	2,393
Sub-Total	115,779	92,137	101,203	139,411
Caricom
Antigua	95	111	187	143