May 18, 2023
Iraq buys 88,000 metric tons of U.S. rice
U.S. rice exports are expected to total around 3 million metric tons in the 2022-23 marketing year. February 3, 2023 Al Awees, the private company that took over much of the food purchasing for the
U.S. rice exports are expected to total around 3 million metric tons in the 2022-23 marketing year.
February 3, 2023
Al Awees, the private company that took over much of the food purchasing for the government of Iraq in 2021, made two purchases of 44,000 metric tons each of U.S. rice as the 2022 calendar year ended.
The total of 88,000 metric tons may not seem like much given that U.S. rice exports are expected to total around 3 million metric tons in the 2022-23 marketing year, but the symbolism may be more important than the actual amount.
Questions had been raised about whether Al Awees would honor the 2022-23 Memorandum of Understanding signed by the governments of the United States and Iraq that calls for Iraq to purchase 200,000 metric tons of U.S. rice. Al Awees’ initial rice purchases in the summer of 2021were from Uruguay.
Iraq was once a major market for U.S. rice, but the rice trade between the two countries has been limited to nonexistent over the last three decades. Iraq imports nearly 90% of the rice it needs, and its purchases have been increasing.
“Iraq’s rice imports averaged 1.1 million to 1.2 million tons a few years ago but have now surged to nearly 2 million tons,” said Sarah Moran, vice president, international, who manages the USA Rice Federation’s international marketing programs.
Moran said rice production in Iraq has increased from 120,000 tons to 250,000 in the past year, but domestic consumption of rice has risen from 1.3 million metric tons to 1.7 million metric tons in 2022.
“Iraq operates a public distribution system where the government provides certain essential food products, such as rice, oil, wheat flour, sugar, and milk,” she said. “Nearly 90% of Iraqi households receive ration cards for subsidized food commodities. The amount of rice in these ration cards has increased from 12 kilograms per person (26 pounds) to 33 kilograms per person in 2022.”
A chart displayed by Moran showed India and Thailand have accounted for the bulk of Iraq’s rice imports in 2020, 2021 and 2022. Prices of rice in those two countries are typically $200 per ton below U.S. prices due, in part, to government subsidies for rice farmers in India and Thailand.
The price disparity has played a role in the reduced outlook for U.S. exports worldwide. In January, USDA’s Economic Research Service lowered its forecast for U.S. 2022-23 all-rice exports to 66 million hundredweight or about 3 million metric tons, the lowest since the 1985-86 marketing year. “The downward revision was largely based on sales and shipments through late November, expectations regarding shipments for the remainder of the market year, and uncompetitive prices,” said Nathan Childs, coordinator of the USDA Economic Research Service’s Rice Outlook Report.
In it, the U.S. rough-rice export forecast was again lowered 2.0 million cwt and is now projected at 23.0 million cwt., or about 1 million metric tons. Rough-rice imports are projected to be almost 19% below a year earlier and are the lowest since 2000/01.
“Long-grain shipments to Latin America are expected to again account for the bulk of these exports,” Childs said. “However, the United States is facing increasing competition from South American suppliers in the region, especially in Mexico, the top U.S. rough-rice export market, as well as in several Central American markets.
U.S. 2022-23 milled-rice exports remain forecast at 46.0 million hundredweight, nearly 15% below a year earlier and the smallest since 1965/66. United States sales through late November to both Haiti—the largest market for U.S. long-grain milled rice—and Japan—the largest market for U.S. medium- and short-grain milled rice—were well below a year earlier.
U.S. rice shipments to Mexico have been declining by about 100,000 metric tons per year over the last two-and-a-half years, according to Dwight Roberts, senior advisor to the U.S. Rice Producers Association.
“In 2021, the U.S. exported 765,000 metric tons of rice to Mexico; in 2022, it was 625,000 metric tons; and as of September, it was 373,000 metric tons,” he said. “Mexico now accounts for 60 % of Brazil’s paddy exports, a statistic that was unfathomable only a few years ago.” (Brazil could ship 900,000 metric tons of rice to Mexico this year, he notes.)
Numbers like these make the Iraqi agreement to buy 200,000 metric tons and any other sales U.S. shippers can make more important than ever.
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Forrest Laws spent 10 years with The Memphis Press-Scimitar before joining Delta Farm Press in 1980. He has written extensively on farm production practices, crop marketing, farm legislation, environmental regulations and alternative energy. He resides in Memphis, Tenn. He served as a missile launch officer in the U.S. Air Force before resuming his career in journalism with The Press-Scimitar.
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