WASHINGTON, D.C., Jan. 22, 2016 - China, the world’s largest rice producer and importer, has agreed to open its market to U.S. exporters after years of negotiations between the two governments, the USA Rice Federation announced Friday.
"The challenge now is to move from agreement to shipments," USA Rice CEO Betsy Ward said in a statement on the group’s website.
USDA officials on Thursday informed the rice industry that China had finally signed off on a phytosanitary protocol that will pave the way for trade to begin, but USA Rice officials had already been preparing for what was widely considered an imminent start to trade.
A preliminary protocol was reached by USDA’s Animal and Plant Health Inspection Service (APHIS) and its Chinese counterpart, the General Administration of Quality Supervision, Inspection and Quarantine, several months ago but the deal was delayed after China’s Agriculture minister held off on signing it immediately, according to U.S. government and industry officials.
"We have been working with APHIS for several weeks to identify U.S. mills and storage facilities interested in exporting to China and willing to comply with the insect-trapping and record-keeping requirements of the protocol," said USA Rice Chief Operating Officer Bob Cummings. "APHIS will soon contact these entities to arrange on-site inspections to assess compliance with APHIS' work plan.”
The insect trapping is key and a recent demand from China that many in the U.S. industry initially balked at. China and the U.S. were on the verge of completing a phytosanitary protocol about a year ago when Chinese negotiators unexpectedly added provisions to require that U.S. mills begin laying out traps for the Khapra beetle and other related or similar pests that can do severe damage to grain stocks.
China wasn’t just asking for the traps, though. It also demanded that mills and storage facilities keep record of what is found in the traps and make those records available to the Chinese.
The Khapra beetle is very hard to kill because insecticides don’t do much damage to them and they can go without eating for extended periods of time.
U.S. producers said they weren’t worried, though, because the beetles are extremely rare in the U.S. They are more of a problem in Asia, they said.
What did worry the U.S. industry was another addition to the protocol this past summer in which China sought to require U.S. mills to label all of the rice varieties in shipments. Many in the industry complained this was often not possible and the issue was settled when APHIS officials told the Chinese that variety labeling was a business matter that could not be included in a phytosanitary protocol.
The latest USDA forecast shows China importing 4.7 million tons in the 2015-16 marketing year, up from 4.3 million tons in 2014-15.
It’s unclear how much China will buy from the U.S., but there is enormous potential. Back in 2001, when the U.S. and China reached a deal to allow China to join the World Trade Organization, China agreed to a tariff rate quota system that would allow access to 2.7 million tons of U.S. rice.
