Regional rice prices show strength
By Nicosia Smith
Stabroek News
May 21, 2004
While local rice farmers may get a boost from higher grain prices worldwide they may pay more for their daily bread.
An official of the National Milling Company of Guyana (Namilco) Inc. says the cost of every shipment of wheat this year has been higher than the previous one, while fuel, freight and electricity costs continue to rise.
But the official says the company still has held off increasing flour prices.
Namilco's prices remain at 2002 levels even though it is a struggle, says the official. A 45 kg sack of Thunderbolt flour sells for $4,500.
Wheat and other grain prices have increased internationally owing to adverse weather conditions such as severe drought, according to international reports.
According to a newswire report, James Paul, the Barbados Agricultural Society's, chief executive officer, said feed prices have already risen, and it would not be long before the other inputs increase, thereby increasing the costs of meats and ultimately vegetables and root crops.
Although it was still too early to calculate the expected hikes, the CEO said the harvesting of the world's wheat harvest this month, would dictate what the increases were likely to be.
There are some benefits for Guyana from higher grain prices increase through more lucrative rice sales to regional markets.
This will depend in part onwhether Caricom can prevent subsidized extra-regional rice from entering the market without paying the Common External Tariff.
In a recent Stabroek News article, Beni Sankar, chairman of the Caribbean Rice Association(CRA) said the Council for Trade and Economic Development (COTED) needs to do more than 'note' and 'urge' member states to comply with the rules of the Rice Monitoring Mechanism (RMM).
US producers, who receive in some cases 100% agriculture subsidies, are major suppliers to the region.
Dharamkumar Seeraj, general secretary of the Guyana Rice Producers Association, says Guyana "will have to keep flogging away at Caricom" to ensure that member states comply
But he is hoping higher prices will help mitigate the effect of extra-regional imports and notes that even China whose rice prices are traditionally low has seen its rice prices doubled.
Peter deGroot, CEO of Fairfield Rice Inc., is optimistic that increased international prices might filter down to the local market.
But he said while within Caricom prices have increased, the European market has seen little movement. The Caribbean market has seen an increase of US$20 to $US40 per tonne for white rice. But this is still a long way off the highs of 1995 and 1996 when prices were US$410 per tonne.
In Jamaica white rice was sold for US$240 per tonne in January with parboiled rice at US$375 and packaged rice at US$400 per tonne.
US suppliers are selling rice at higher prices and Guyana's low-cost rice should enjoy stronger demand, says deGroot. But he cautions that suppliers must resist calling for higher prices without first establishing a brand name for Guyanese rice.
"We have to tread cautiously."
With heavy rainfall threatening the expected yield for the next crop, farmers are likely to see increased paddy prices as millers bid for what is available.
Seeraj says for this crop, farmers in Region Six, especially Black Bush Polder and Region Five, in the riverain areas have to get assistance to transport their paddy. He says the GRPA plans to ask Guysuco for a punt to transport paddy from Cove and John(East Coast Demerara) and Den Amstel(West Coast Demerara), since flood waters are making the dams impassable.
Farmers are still receiving $1,300 per bag of paddy but so far payment schedules have improved, says Seeraj.
He notes that rice company Alesie Guyana is the only company that still owes farmers small amounts for the spring crop.