US rice could see potential market in China

Updated: 2014-08-28 09:24

By JACK FREIFELDER in New York(China Daily USA)

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A few years ago no one would have even considered exporting rice to China, but growers, exporters and international trade organizations in the US are starting to come around to the idea.

"US rice producers and exporters are continually looking for new sources of demand," Bob Cummings, COO of the USA Rice Federation, wrote in an email to China Daily. "The US consistently exports 45 percent to 50 percent of its rice crop each year, so access to China's consumers and the ability to develop a market there are important."

Though China is already the world's largest producer and consumer of the grain, US rice products are completely locked out of the Chinese market until a sanitary and phytosanitary (SPS) protocol agreement between the two countries is reached.

An SPS agreement is a set of agreed-upon terms for agricultural trade that "concerns food safety and animal and plant health regulations", according to the World Trade Organization (WTO).

Cummings said negotiations between the US Department of Agriculture's (USDA) Animal and Plant Health Inspection Service (APHIS) and China's General Administration of Quality, Supervision, Inspection and Quarantine (AQSIQ) have been ongoing for some time.

The USA Rice Federation, based in Arlington, Virginia, is the leading advocacy group for the US rice industry. The group is comprised of growers, merchants, millers and other allied businesses, and represents 90 percent of the US rice industry.

Data from an Aug 14 Rice Outlook report by the USDA shows that China is now on pace to import nearly 3.5 million tons of rice this year, more than six times the amount it imported 2011.

Though American producers account for less than 2 percent of the world's rice, USDA data shows that US trade totals make up more than 10 percent of the annual global rice trade. The other leading countries in the global ride trade include: India, Vietnam, Thailand and Pakistan.

The main export markets for US rice are Canada, Mexico and a number of other countries in Central America.

A Sunday story in the Los Angeles Times said China started importing sizeable quantities of rice from other countries in the Asia-Pacific region in 2012, including, India, Pakistan and Vietnam.

China may look elsewhere for its rice imports, but the country is still the largest global destination for US food and agricultural products. And in 2013 China accounted for nearly 20 percent of US agricultural products, or a total equal to more than $26 billion in trade.

Greg Yielding, the head of emerging markets for the Houston-based US Rice Producers Association, said rice producers in the US are always looking for new markets to increase the potential returns on their product.

"Farmers here can grow very good quality rice and they see China as another market for high quality US rice," Yielding said. "Every market in the world is different, but to be able to go into China and have our product compete would be good because they have a lot of very good rice too."

The US Rice Producers Association, which is the only national organization composed entirely of producers, represents growers in all six of the major US rice-producing states — Arkansas, California, Louisiana, Mississippi, Missouri and Texas.

"Rice consumption in China is so high that the country could eat through America's annual production in 17 days," he said. "But the Chinese supermarkets and importers are willing to take all they can get. As long as it's the high quality rice that they've seen, people in China are willing to buy and farmers are going to make more money by expanding the market."

Cummings, with the USA Rice Federation, said: "US rice has an unparalleled reputation for the highest food safety standards … and that will be a real plus for our rice in the minds of Chinese consumers. China has recently been a 2 million-plus metric ton import market, so achieving even a small share of this market would be significant for the United States."