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Spanish rice farmers, hanging by a thread (y II)

Wiki Spanish Food editorial team

In the European Union, around 430,000 hectares of rice have been sown in the 2015/16 season, up almost 4% compared with last year, of which 319,000 were Japonica, or round grain (290,000 ha in 2014/15) and 110,000 were Indica, or long grain (124,000 ha in 2014/15).

Production is expected to total 1.73 million tons of white rice equivalent, of which almost 1.22 million MT are Japonica and 516,000 MT are Indica, which is trending downward. More than half of total production is in Italy, 31% is in Spain, 7% in Greece; 5% in Portugal; 2% in France; 2% in Bulgaria, 2% in Romania and slightly less than 1% in Hungary.

According to the most recent market data, the outlook for 2015/16 is as follows: with an initial stock of 350,000 MT of white rice equivalent and production of 1.73 million, imports could amount to almost 1.3 million tons (1.2 million of Indica and the remainder Japonica), with the result that there would be a supply of 3.37 million MT of rice available in the market. Of that amount, almost 2.8 million would be used for domestic consumption and 240,000 MT would be exported to non-EU countries. Therefore, more than 3 million tons would be used, leaving 350,000 MT, i.e. similar to the previous season.

An undersupplied market

In contrast with the situation in Spain, the EU as a whole is a market with unmet demand which is increasingly supplied with rice, mainly Indica, from Southeast Asian countries, with which the EU has a preferential agreement, with very low or no duties. Rice imports from non-EU countries are increasingly competitive in terms of price with EU countries' products.

In the 2014/15 season, the European Union imported a record 1.5 million tons of white rice, of which more than 500,000 tons (32.3% of the total) were from EBA (Everything But Arms) developing countries, whose products reach the EU without paying duties and which have considerably increased their presence in recent years.

Of the total imported by the EU, 22.9% is from India; 22% is from Cambodia; 18.5% is from Thailand, which will see its harvest slip by more than 10% this year; 13.8% from Pakistan; 6.5% from Myanmar; 5.9% from Guyana; 3.7% from the US; 2.4% from Uruguay; 2% from Vietnam and 2.3% from other countries.

The UK is the main importer of rice from non-EU countries, with 23.6% of the total; France imports 17.2%; Belgium, 11.7%; the Netherlands, 11.4%; Germany, 8%; Italy, 6.8%, Spain, 4.7%; Portugal, 4.5%, Sweden, 2.5%, the Czech Republic, 2.3% and other countries account for the remaining 7.3%.

Of the 500,000 tons of rice imported from EBA countries in 2014/15, around 273,315 MT are white rice from Cambodia; 224,717 MT are from Myanmar (Burma) and 6,165 MT come from other countries. Of the total volume imported from EBA countries, around 312,325 MT are Indica rice (28.88% of the 769,077 MT in total imported from non-EU nations).

The president of the rice industry segment of Cooperativas Agro-Alimentarias, Manuel Rodríguez, says that the problem with imports "persists" and "increases year after year, threatening the profitability of the crop and rice production in Spain, which will end up being unprotected and offshored". He added that the preferential program for EBA countries allows other producer nations to "sneak" their product in through triangular operations, i.e. crossing over the Burmese or Cambodian borders.

The problem with the massive entry of rice into the EU could get worse when, in a few years, the free trade agreement between the EU and Vietnam enters into force, as that country is one of the world's leading producers.

In the European Union, 60% of the rice is imported duty free, and the remaining 40% only pays 30 euros per ton, which is almost 90% less than 10 years ago, according to ASAJA-Sevilla and the Seville Rice Grower Federation (FAS), which maintain that this situation has led large global rice producers to engage in unfair competition and saturate European markets. According to those organizations, this increase in "indiscriminate" rice imports poses a serious threat to the crop's continuity in the European Union.

According to Manuel Cano, Director of FAS, high yields allow for rice to be grown in the Guadalquivir Valley, bearing high production costs which are not absorbed by prices and which hover around very low levels this season, between 280 and 285 euros per ton for Indica and 300 and 340 euros per ton for Japonica, compared with a minimum of over €350/MT which growers need to turn a profit.

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30/10/2017