Dear Editor,
Guyana has been expanding its rice production and export levels with the assurance of having preferential access to the Venezuelan, EU and Caribbean markets. However, recent changes in the internal rice sector and future trade liberalization could eliminate or at least sharply reduce Guyana’s continued preferential access to these rice export markets as we are now seeing.
These growing uncertainties and falling farm prices have alarmed government and policy-makers in Guyana about the efficiency of the local rice sector and whether Guyana can effectively compete in the world rice market without preferential treatment. The government and the Guyana Rice Development Board should now provide a rice market consultant to conduct a study of rice pricing at different stages of the marketing channel in Guyana to identify opportunities for improving the competitiveness of the industry.
An analysis of industry costs has indicated that all the farmers were at least breaking even with their production costs at the going paddy price of $3000 per bag. However, most farmers were not recovering their total costs of input.
The millers’ margins were also about break-even causing the paddy prices to drop. The estimated milling and marketing costs for both large and small mills were found to be similar.
The FOB supply cost of both large and small mills is roughly equivalent to the selling price. Overall the industry appeared to be operating competitively some years ago, but additional expertise is needed in the long term to develop an additional export market for Guyanese rice. In the past, with the third buyer the announcement of a temporary freeze on debt repayments, shipments of contracted rice were put on hold or delayed over problems of payment.
It is hoped that consumers in Haiti and other Caribbean countries will be better serviced by the Guyana rice industry, as some of these countries will look at importing high quality rice on a reliable basis. Production of higher quality rice would also increase the returns to the rice industry.
Yours faithfully,
Mohamed Khan
