Guyana is currently awaiting a response from the Ghanaian government on the rice samples that were sent to Accra pending the formalisation of a 120,000-tonne rice deal with the West African country.
Minister of Agriculture Dr Leslie Ramsammy made the disclosure of the anticipated rice market at a press conference on Saturday but did not name the country. Stabroek News understands that Georgetown has been in talks with Accra since the beginning of the year trying to work out a large-scale market at competitive prices. According to the preliminary terms of the agreement, 10,000 tonnes of rice will be shipped on a monthly basis. The African market is very interested in the type of rice grown locally, the extra-long grain. Stabroek News was told that a variety of rice samples were sent to Ghana but the market will most likely be at the higher end with rice breakage of 5%. However, not wanting to lose out on any potential markets in that region, the Guyana Rice Development Board (GRDB) also sent samples of 5-25% breakage which will help to regulate what the price brackets are for the finalized market. Stabroek News spoke with Deputy General Manager of the GRDB Ricky Ramraj but he could not confirm at what price Guyana would likely be selling rice to the African market. He said that the deal is still being worked out as well as what countries would be involved.
According to Ramraj, other countries in West Africa have expressed interest in buying Guyana rice because it is extra-long grain. He told Stabroek News that the deal will be finalized within the next few weeks after feedback is received on the samples that were sent.
Still to be worked out is how the rice will be transported and the cost of freight to West Africa.The newest potential market comes just a few weeks after it was revealed that Guyana will begin shipping 5,000 tonnes of rice monthly to Panama. Stabroek News was told that Guyana will be exporting 20% broken rice to Panama under the new agreement signed on August 14 at the Office of the Minister of Agriculture in Panama City.
Stabroek News understands that after ongoing negotiations, the rice will be exported at US$535 per tonne which is well above the world market price which has fluctuated over the past few month from just under US$400 to US$460 for 25% broken rice.
Guyana will benefit from the projected rice shortage that will hit Panama in the beginning of 2015. Panama has initiated a rice subsidy and has also curbed the imports of milled rice since the beginning of July according to LaPresna.com. The Panamanian news website stated that a US$0.08 subsidy is being paid per US$0.46 which is the current rate at which one pound of rice is sold.
Guyana’s export price will impact local Panamanian millers who will be forced to sell rice at a higher price than is being imported even with the subsidy provided by the Panamanian government.
This newspaper was told that if possible, Guyana would sell to Panama at US$600 per tonne, but these figures are all dependent on how successful the deal is until year-end. In the statement issued by the ministry after the deal was signed, it was noted that the Panama market would likely be based on world market prices.
Ramsammy had told Stabroek News that the agreement entails the supply of 50,000 tonnes of packaged rice to Panama. Only millers capable of supplying packaged rice will be utilised for the Panama agreement.
In April, SAJ Rice Mill inked a deal to export 50,000 tonnes of rice to Haiti. The SAJ Rice Mill agreement was a private initiative unlike the new Panama agreement and the longstanding Venezuelan rice agreement which consists of 210,000 tonnes of rice and paddy being exported under the PetroCaribe Agreement.
Guyana’s rice agreement with Venezuela is valued at US$130 million. The price per tonne of paddy and rice ranges from US$600-620. This year, it is expected that rice production could be well over 600,000 tonnes. In 2013 it was over 532,000 tonnes, a record.
The lack of markets has created problems all across the industry with millers being delinquent in payments to farmers. This has caused some farmers to question why they are planting at such volumes if their payment is not secure. In Panama, after years of poor export markets, farmers contracted planting due to uncertain markets and preference was shown for imports over local producers.
