Rice farmers are expected to benefit from another agreement under the Venezuela rice deal, following the signing of a US$48M contract between the agriculture ministry and the neighbouring state under the PetroCaribe agreement.
The deal has seen increasing quantities of rice and paddy being exported to the neighbouring state over the past few years and Minister of Agriculture, Robert Persaud told reporters during a briefing at the ministry’s boardroom yesterday that the first shipment under the new contract is likely to leave these shores within the next few days.
He said that some 50,000 tonnes of paddy as well as 30,000 tonnes of white rice will be shipped to the Bolivarian state within the next year. The new arrangement will see white rice being sold at US$800 per metric tonne while paddy will be valued at US$480 per metric tonne.
Persaud noted yesterday that the first rice crop this year has seen 180,000 tonnes of paddy, nearing the 200,000 target set by the authorities. He stated that the newest agreement is coming “at a crucial time for us” and noted that the industry is expecting a bumper crop this year despite the effects of the La Nina weather phenomenon.
As regards the prices paid by the rice development board to farmers, he said that the situation has improved and he expressed hope the trend will continue in this regard. He voiced hope that the agreement will have a “huge impact” on the price farmers receive, as well as millers and exporters.
Persaud emphasised that the Venezuela market “is a prized market and also one where we have seen better prices.” He also noted that the Venezuelan market was not established at the expense of other markets, saying that the industry will continue to supply the European and CARICOM markets while making moves to further diversify its markets.
The minister encouraged farmers to supply the market and he also encouraged them to export rice and paddy directly since it would be beneficial to their cause. He said that he has been encouraging diversification of markets and value-added production. According to Persaud, the prices for unprocessed and unpackaged rice has been known to fluctuate while packaged product prices remain stable so that the industry will be secure in long run.
The first vessel destined for Venezuela under the latest arrangement is currently being loaded with close to 5,000 tonnes of white rice and it is expected to sail shortly. Persaud said that the second agreement, which preceded the latest arrangement, is being completed in terms of readiness for shipping.
He also noted that there has been an increase in projections for the sector this year, adding that the 395,000 tonnes projected has surpassed the originally projected figure of 378,000 tonnes .
Globally, Persaud said that there has been a decrease in rice trade for the month of April, but demands are picking up. He noted that the effects of climate change and natural disasters will see pressure being applied to the trade, which will in effect be to the benefit of the local industry.
Meantime, concerns have been raised about the transparency in which the rice arrangement with the Venezuelans is being undertaken and Persaud noted yesterday when asked to comment on the issue that he was “not sure how to make it more transparent than it is.”
He explained that the contracts are negotiated and information on same is made public, “so no one has privilege to information regarding the deal.” He noted too that when the rice board manager returned from Venezuela recently, he was asked not to speak to anyone within the industry “unless everyone is there.”
Secondly, Persaud said that the rice board advertised and invited suppliers to tap into the market under the agreement and he noted that the body has been giving support to stakeholders who have approached in this regard. He referred to transparency claims made in sections of the media under the agreement as a non-issue, adding that information regarding the deal has been in the public domain.
In June 2005, Guyana and several other CARICOM nations signed the PetroCaribe deal. Under the arrangement, Venezuela offered preferential terms for the purchase of oil, accepts deferred payment and allows borrowers to pay for oil with goods such as sugar, rice, bananas or kidney beans.
