Guyana and Venezuela have finalized a second rice deal valued at US$38M and
Agriculture Minister Robert Persaud yesterday said it would see 50,000 tonnes of paddy and 20,000 tonnes of white rice being shipped there from October.
Under the deal, suppliers will be paid US$420 per tonne of paddy and US$700 per tonne of white rice. These are the same prices applied under the US$18.8M contract signed earlier this year and Persaud insisted that they are about 75% more than those offered at other markets.
This, Persaud stressed at a news conference, shows the commitment of government to ensuring that farmers receive the best price for their produce.
However, Guyana is indirectly paying itself for rice and paddy supplied from payments to Venezuela for oil supplied under the PetroCaribe deal. President Jagdeo, during a press conference last month, said that Guyana owes Venezuela more than US$160M for oil obtained under the PetroCaribe arrangement.
He explained that because of the rice agreement Guyana has with Caracas, debt is used to pay for rice exported to that country, following which the Venezuelans would then cancel the promissory note. In June 2005, Guyana and several other CARICOM nations signed the PetroCaribe deal.
Under this deal, Venezuela offered cut-price oil, accepted deferred payment and allowed borrowers to pay for oil with goods such as sugar, rice, bananas or kidney beans.
Meanwhile, Persaud said yesterday that the industry is experiencing growth and this is evident in the fact that during first crop this year, harvest surpassed the projected amount. Paddy for the current crop (second/autumn crop of 2010) is ready to be harvested. “I am confident in our ability to supply the Venezuelans…and this will in no way affect our ability to supply other markets,” he said.
Persaud further pointed out that exports for the period January to July this year, when compared to the same period last year, have increased by 22%. The value of these exports, he added, increased by 14.1%.
However, it is expected that the upward trend of these areas will be affected by the current La Nina situation.
Marketing for rice was being handled by the private sector but after the government expressed concerns about the growth of the industry, the Guyana Rice Development Board (GRDB) has been going out and soliciting markets. “We’ve been seeking markets in South and Central America as well as Asia,” Persaud said.
He further noted that the current weather conditions in India and other difficulties being faced by other rice producing nations are expected to cause an increase in rice prices.
The hike in rice prices could possibly result in the prices under the second contract being revised as well so that farmers can get more.
Before the shipping of paddy for the second deal commences in October, details will have to be sorted out and the first deal is still to be completed.
There is still 4,000 tonnes of white rice to be shipped under the first rice deal with Venezuela. This last shipment should be completed by the end of the current month.
There were some difficulties encountered during the first deal, Persaud told reporters yesterday. Most of these difficulties, according to him, resulted from logistics. There was some trouble with vessels and the shipping schedules.
This issue, Persaud said, was addressed by President Bharat Jagdeo during his July 21 visit to Venezuela.
It was found that more than US$1M was spent on moorage and this is currently being investigated. Venezuela, Persaud added, needs to deal with its port congestion problem.
On August 13, he explained, a shipment of white rice (under the first deal) departed for the Spanish-speaking country.
The journey to Venezuela takes just over two days, Persaud said, but it was only yesterday the vessel was able to enter the port to offload.
This means that the vessel would’ve been waiting more than 10 days to enter the Venezuelan port, Persaud noted, and as a result a lot of time and resources were wasted. This is not economical and takes away from the profit to be made from the deal.
General Secretary of the Guyana Rice Producers’ Association (GRPA) Dharamkumar Seeraj, who was present at yesterday’s press briefing, said that the second deal ink with Venezuela has ensured that about 30% of the paddy from the current crop has a market. This is about 1.2 to 1.3 million bags of paddy; Seeraj pointed out, and means that Guyana had an “assured market”. Farmers, he said, welcome this and many look forward to the higher prices from which they will benefit.
Seeraj described the second Venezuelan deal as one of “single most significance” and noted that with the difficulties currently being faced by other rice producing nations there is a possibility that we will be able to have access to even higher prices on other markets. Meanwhile, Stabroek News has tried over the last two weeks to speak with farmers who supplied paddy under the first rice deal with Venezuela.
However, they have declined to comment but insisted that they were being guided by the GRDB and were making a “neat profit.” “I can tell you that I have made $1000 more on a bag of paddy than I would’ve if I’d sold it to someone else,” one farmer, who declined to have his name published, said.