Chairman of the Guyana Millers and Exporters Marketing Association Dr Peter deGroot says that a meeting has been requested with Foreign Affairs Minister Carl Greenidge to update stakeholders in the industry on the impact the current border controversy with Venezuela will have on rice exports.
de Groot told Stabroek News that currently a team from the Guyana Rice Development Board is in Venezuela to discuss the remaining shipments of rice, including the over 170 containers that were left in limbo early last week.
“We met with the Minister of Agriculture [Noel Holder] last Friday… we discussed the controversy, of them stopping the importation and we suggested that we arrange a meeting with the Foreign Affairs to discuss more medium-term issues,” he said.
The request follows recent Venezuelan sabre-rattling over Guyana’s maritime territory.
de Groot further added that government to government assistance to tap Caricom markets is a logical step but noted that the Caribbean market is relatively small, with the smaller islands importing less than 2,000 tonnes of rice.
de Groot said countries like Cuba was where government to government assistance could be more significant. Regarding Jamaica and Trinidad and Tobago, the largest rice markets in the Caribbean, he noted that inroads have already been made to increase exports. He, however, stated that Trinidad and Tobago imports significant amounts of parboiled rice and only a small number of millers currently have the capability of meeting the demand.
Turning his attention to the prospective South American markets, de Groot said many countries have lucrative tax waiver deals with the United States that allow for little to no duty being paid. So while Caricom benefits from the Common External Tariff, the markets are relatively small while the larger South American markets are difficult to compete in due to duties.
“We’ll have to accept losses”
de Groot said that given the ending of the annual Rice Agreement with Venezuela, losses are an eventuality that the industry will need to accept.
“We have to get rid of the stock. There are markets out there and unfortunately they are well aware of the crisis we are facing,” he added.
Guyana currently sells rice to Venezuela for roughly US$660 per tonne of white rice, while the global market price rests at roughly US$445 per tonne, de Groot pointed out. When the agreement was signed in March, the agreement was for rice to sell at US$760 per tonne and paddy to sell at US$480 per tonne.
To fulfil the current arrangement, valued at US$120M, Guyana is required to ship an additional 24,000 tonnes of white rice and 90,000 tonnes of paddy. For the year, Guyana has already exported 30,000 tonnes of paddy and 40,000 tonnes of white rice. The Venezuelan market represented 30% of Guyana’s rice exports last year.
Stabroek News was informed that with the second rice crop starting, there is still over 50% of the first crop’s produce available. The first crop produced over 360,000 tonnes of rice.
de Groot also said that for now the issues remain the same. “We have addressed it as an industry for a while—cost of
production, from a milling standpoint, that depends on, the high cost of electricity,” he pointed out.
According to him, more needs to be done in terms of access to lower electricity needs but it is a Catch-22. To currently invest in cheaper electricity would be a large burden for millers to bear at one time. He said transforming rice husk to an energy source is ideal, however start-up costs pose concerns, especially with the loss of the Venezuelan market, which was a guaranteed sell source.
Finance Minister, Winston Jordan had previously disclosed that since 2014 Venezuela was signalling that there would be no additional arrangements under the PetroCaribe fund and that the annual rice barter agreement would conclude in November. (Pushpa Balgobin)
