Rice and Food Aid USDA/USAID Food Aid Conference April 8, 2009 Jim Guinn Vice President International Promotion.

Rice and Food Aid

USDA/USAID Food Aid Conference

April 8, 2009

Jim GuinnVice President

International Promotion

Summary of remarks

• Issues leading up to and exacerbating the “food security crisis” of spring 2008

• US Rice in food aid

• Why rice?

U.S. RiceSupply, Use and Ending Stocks

0

3

6

9

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/090.0%

6.0%

12.0%

18.0%

Total supply Total use Ending stocks Stocks-to-use ratio

Source: USDA World Supply and Demand Estimates and Rice Yearbook All numbers are basis milled rice

Million MT

World RiceEnding Stocks & Stocks/Use Ratio

Million MT

All numbers are basis milled riceSource: USDA World Supply and Demand Estimates and Rice Yearbook

$10.50$11.50$12.50$13.50

Crude Oil ($ per Barrel)

Long Grain Rice ($ per hundredweight)

$60

$80$70

$90

U.S. Long Grain Rough Rice & Crude Oil 2007 Daily Price Chart

$21

$18

$15

$23

Long Grain Rice ($ per hundredweight)

Crude Oil ($ per Barrel)

$50$70$90

$110$130

U.S. Long Grain Rough Rice & Crude Oil 2008 Daily Price Chart

2008 Top Exporters/Importers of Rice

Export Restrictions

• India – October 10, 2007 – short lived export ban• China – January 1, 2008 –

o abolished 13% VAT tax rebate on exportso added 5% export tax

• Egypt – March 2008 – export ban• Vietnam – March 2008 – export ban• India – April 1, 2008 –

o export ban on non-basmati riceominimum export price on basmati $1,200 MT

• Brazil – April 22, 2008 – export ban• Burma – May 2, 2008 export ban

o due to cycloneo received rice as part of food aid

Contributing Factors

• Philippines tendered for 500,000 MT on April 17 • Venezuela increased imports from nil in 2007 to reach 314,000 MT

in 2008• Many importers – few exporters• Growth in demand

– Increased demand by 25 million MT from 2004/05• Declining stocks• Growing cost of production• Rise in oil prices• Rise in use of land for production of biofuels• Export restrictions• Hoarding• Panic buying

No one factor was the cause in itself, but was a complex web of factors

Predictable Results

Shortages and Sustained High Prices

USA Rice’s public message

• U.S. farmers grow and supply 90% of the rice Americans consume each year.

• U.S. rice farmers export 50% of their annual production to traditional customers abroad.

• The U.S. produces only 2% of the world’s annual rice supply, but is the world’s fourth largest exporter of rice. 

• The U.S. has enough rice to supply American consumers and their traditional customers in export markets.

U.S. Rice in Food Aid

• FY09–USDA/FAS 14,380 MT

–USAID (Title II) 30,270 MT

• FY08 – 118,900 MT ($55.1 million)– Asia 50,970 MT

– Africa41,810 MT

– Latin America 26,300 MT

• FY07 – 97,100 MT ($36.3 million)

Why Rice in Food Aid?

• A staple in many targeted countries/regions• Excellent source of complex carbohydrates and

essential amino acids• Easily digestible– Great caloric source for at risk populations

• Infants, HIV, TB and malaria sufferers, and those suffering from compromised digestive systems

• Hypoallergenic– Gluten-free

• Large and growing populations are gluten intolerant (celiac)• Long shelf life• Easily prepared

Thank You

For more information:

(703) 236-2300www.usarice.com