The strict enforcement of the external tariff on regional rice imports is behind certain companies in Jamaica and Trinidad crying out for a waiver when there are adequate supplies.
Local suppliers say these companies are looking to maintain their market share in their countries but are not prepared to pay prices for regional rice.
Recently Trinidad and Tobago and Jamaica applied to Caricom for waivers on the Common External Tariff(CET) to import extra-regional rice.
Dharamkumar Seeraj, general secretary of the Guyana Rice Producers Association notes that the waivers being sought by Jamaica are unfounded since Guyana and Suriname can supply the markets.
He says it once was the case that extra-regional rice entering the Caricom member states was not subject to the CET and could undercut regional supplies.
But with the Rice Monitoring Mechanism requiring countries to report their trades to the Caricom Secretariat, the CET is being imposed. He says the importers are now asking for the waiver so that they can import extra-regional rice and still be able to compete with regional suppliers.
"There has been manipulation of the CET for convenience," says Seeraj. He says one of the two companies in Jamaica who applied for a waiver, had rice at a local wharf for months before it was removed.
Nand Persaud, of Nand Persaud Company Ltd in Berbice, says that while has been reluctance by some Jamaican and Trinidadian buyers to source rice from Guyana, the company has three buyers in Jamaica which it supplies with 22-kg and 45-kg bags, with one company being a large purchaser. Persaud says some of their outstanding orders to Jamaica will be fulfilled this week as harvesting has now begun. The company normally exports eight to ten containers to Jamaica every week.
Brandon Barton, manager of Mahaicony Rice Ltd., notes that they are able to supply their customers in Jamaica and Trinidad.
"I don't see any reason why they should get a waiver," he says, adding that if the regional suppliers can meet the demand a waiver should not be granted.
An official at Caricom said last week that it had not granted the waiver and had told Jamaica to make contact with Guyanese and Suriname producers.
Barton confirms that in some cases Caribbean buyers are not willing to pay the price for the regional rice, which without the CET generally ends up being higher. But since world prices for rice have increased this is no longer the case and buyers are not looking at ways to cut costs. Barton notes that there is no distinct preference for the regional or extra-regional rice so price is the deciding factor.
Jamaica is susceptible to shortages in rice as it is a key part of the diet. If a particular buyer cannot source rice, this becomes a national problem.
Early this year, white rice was being sold for US$240 per tonne and parboiled rice for US$420 to Jamaica. But some companies were able to sell for as much as US$280 for white rice while high quality is selling at US$320.
This is while prices for cargo rice for Europe remain at US$210, which Seeraj calls "ridiculous."
"The major buyer in Europe is still in a wait and see mode," he says, explaining that they are waiting until the last moment to set a price in the hope they can break the resistance of local suppliers even as world prices have been on the rise.