WASHINGTON, Nov. 11, 2015 - Despite some last-minute red tape requirements, a top official with the U.S. rice industry said China could begin accepting shipments of U.S. rice within a matter of months.
There were wire service reports in early September that China was about to sign a phytosanitary protocol that would lead to the approval of U.S. rice imports. USDA’s Animal and Plant Health Inspection Service (APHIS) later told USA Rice those reports were inaccurate and that the protocol was undergoing an interagency regulatory review in China.
As of Nov. 5, the agreement had yet to be concluded, according to Jim Guinn, USA Rice vice president of international promotion.
“There has been exchange of information between APHIS and the AQSIQ (China's quarantine agency) relative to the protocol,” Guinn told Agri-Pulse. “There have been some additional edits made to the document.”
Once the protocols have been approved, Guinn says Chinese quarantine officials will have to visit a number of U.S. rice export facilities.
“The indication is they're not going to visit and approve each individual facility but they would like to come and have a visual inspection of a sampling, at least, of those who are interested in exporting to China,” he says. In addition, the U.S. industry will provide a list to APHIS of facilities interested in exporting, and the agency will visit each of them to certify that they have the capacity to meet the phytosanitary protocol. Guinn believes under a best-case scenario, it could be completed in two to three months.
China is, by far, the world's largest producer and consumer of rice. USDA's World Board estimates 2015 production at 145.5 million metric tons, or almost 31 percent of the entire world crop. However, it's also the world's biggest rice importer and the estimate of 4.7 million tonnes in 2015-16 would mark the fourth consecutive year of record imports.
Its biggest suppliers have been Vietnam and Burma, along with Pakistan and Thailand. In a February report, USDA's Economic Research Service credited the surge to lower-priced imports compared to domestically grown rice. “As the world’s largest rice consumer, even small dietary shifts can have a large effect on the supplies needed to meet consumer demand, and China is increasingly turning to the world market to feed its appetite not only for staple commodities such as rice, but also fruits, vegetables, meat and other consumer-oriented products,” the report said.
Guinn says the U.S. has been in market-opening discussions with China since 2006. In 2011, Beijing determined the opening would require a phytosanitary protocol and a pest risk assessment, the latter of which was conducted that year. Although the market has never been open to U.S. rice, Guinn says for years there has been U.S. rice on upscale grocery shelves in major cities, although it's not clear how it's getting there. He would expect “a target audience at the top of the socioeconomic ladder” for U.S. rice, and adds, “We've had someone from the trade indicate that they thought that probably in the first year of gaining access, it could be 20,000-30,000 tonnes, and grow from there.”
As for other potential growth markets for U.S. rice, Guinn cites nearby markets like Mexico and Central America, but says U.S. producers “could be and are currently facing additional competition in those markets.”
The free trade agreement with Colombia has a tariff rate quota for U.S. rice that rises 4 percent a year, and Venezuela has been a “wild card” with significant quantities one year and little the next, but internal policies discourage domestic production and the U.S. is positioned to gain share as imports increase.
The new Trans-Pacific Partnership agreement should provide some increase in sales to Japan, but Guinn says there may be corresponding losses in other markets. The U.S. has enjoyed duty free access to the Mexican rice market. Other TPP members, including leading rice exporter Vietnam, will now also see tariffs eliminated on rice imports.
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