The competition

ARLINGTON, VA -- Brazil has joined the United States as the only other country allowed to export paddy rice to Mexico, following the recent decision of Mexico's Secretary of Agriculture, Livestock, Rural Development, Fishing and Food (SAGARPA).  Mexico remains the U.S.'s largest export market, and roughly 80 percent of U.S. exports there are paddy, and the decision by SAGAPRA has raised eyebrows north of the border.

According to Marvin Lehrer, the USA Rice Federation's representative in Mexico, SAGARPA has yet to report any imports of Brazilian paddy rice this year, but he says there is definite interest from the Mexican trade.  

"It's always troubling when faced with a new competitor," said Lehrer, "but we believe U.S. rice will continue to outperform the competition."

Lehrer said logistical challenges and general reliability could impede Brazilian penetration into the market, and that additional phytosanitary requirements being placed on Brazilian exports will affect the cost.

"Brazil heavily exports corn and soybeans, placing pressure on an already weak infrastructure," said Lehrer.  "Most of the shipping ports are in the southern part of the country and the main road to the north is only about 70 percent paved.  Of course, this is a potentially short-term problem." 

"The latest development continues a trend of focus on Western Hemisphere markets by Brazilian rice exporters," said Jim Guinn, USA Rice's vice president of international  promotion.  "For the past few years, Brazil has produced around 8 million MT of rice, slightly more than 10% of which is exported. Last year Brazil's top three rice destinations were Venezuela (paddy), Cuba (milled) and Nicaragua (paddy)."

In 2013, Venezuela was the United States' fifth largest export market at nearly 300,000 MT, 30 percent more than in 2012.  Brazilian exports to Venezuela, at 148,000 MT, did not offset U.S. exports last year.  In Nicaragua, the U.S. had been the largest supplier of rice, with a market share of 60-97 percent (100,000 MT on average) in any given year, until last year, when the market share drastically dropped to 8 percent and the Brazilian market share rose to 90 percent.

Guinn says this swing is not something the U.S. will tolerate in the Mexican market and he says USA Rice is taking definitive steps to deal with the potential incursion, including adding a premium image for U.S. rice.

Part Two of our story will examine some of the steps USA Rice is taking in this most crucial market.   

Contact:  Sarah Moran, (703) 236-1457

Around Washington

Washington Week Ahead: Focus on Trade, Port Infrastructure Agri-Pulse

President Obama has proclaimed this week as World Trade Week, shining a spotlight on several important commerce-related events in and around the nation's capital

Around the Country

More Americans Choosing Foods Based on Healthfulness Agri-Pulse

According to the International Food Information Council Foundation's 2014 Food and Health Survey, taste and price consistently have been the top two factors that impact consumers' food and beverage purchases, but concerns about "healthfulness" are on the rise

Food Maker Partners with Walmart on Sustainable Rice Grand Rapids Business Journal

Kellogg has made a commitment to work toward three major sustainability goals related to rice production: improve smallholder livelihoods, enhance producer resilience and reduce greenhouse gas emissions

Pre-Flood Nitrogen Rice Application Rates Agwatch Network

This season we have seen a large number of fields, especially on clay soils, that have recommended considerably lower N rates than the producer had intended to apply

Around the World

Nepal Develops Three Flood and Drought Resistant Rice Varieties Oryza

The new varieties can withstand continuous drought up to one-and-half months and floods up to two weeks or both, says the Head of IRRI's Nepal program

Asia-Pacific Trade Talks Resume Wall Street Journal

The latest round of negotiations isn't expected to yield a deal but trade officials hope the meetings help narrow differences between Washington and Tokyo, which have hindered a quick deal on the TPP