Government Intervention Heavy in Global Rice Market, Says USITC | United States International Trade Commission

May 14, 2015
News Release 15-038
Inv. No(s). 332-549
Contact: Peg O'Laughlin, 202-205-1819

Government Intervention Heavy in Global Rice Market, Says USITC

The global rice market is characterized by relatively low trading volumes and heavy government intervention in both imports and exports, according to the U.S. International Trade Commission in its report Rice: Global Competitiveness of the U.S. Industry.

Exports only account for 8% of global rice production, significantly less than for other grains and oilseeds even though rice serves as a staple in the diet of more people than any other food, according to the report.

The USITC, an independent, nonpartisan, factfinding federal agency, prepared the report at the request of the House Committee on Ways and Means.

The report states that government intervention is often aimed at keeping prices affordable, especially for low-income consumers. In some cases, government intervention also encourages domestic production to promote national self-sufficiency. Other highlights of the report include:

Global rice production and consumption are highly concentrated in Asia. Rice is the primary staple food for most of the population in Asia, especially for the poor. [Read More]

The top three worldwide exporters are India, Thailand, and Vietnam, followed by Pakistan and the United States.

Of government policies for rice in place in 2013, import tariffs on rice in major consuming countries had the largest impact on U.S. production and exports. [Read More]

The United States faces little direct competition in its domestic market, but in recent years it has lost market share in key export markets, such as Mexico, Central America, the European Union, Haiti, and Ghana. The United States exports about 50 percent of its production. [Read More]

The major rice producing countries can be characterized as follows: 1) major consumers and surplus producers, 2) major consumers and importers, or 3) major exporters but not major consumers.

Countries that are both major rice consumers and surplus producers, such as India and Thailand, typically provide support for rice producers and consumers. These countries also impose export controls if prices rise.

Countries that are principally rice consuming and importing countries, such as Indonesia and the Philippines, typically provide a support for rice producers and consumers, and maintain control of rice imports, generally through state trading.
Countries that are major exporters of rice but not major consumers, such as the United States and Uruguay, typically provide less extensive support for rice producers than do major consuming countries.
[Read More]

Low-cost producers of long grain white rice (the most-commonly traded rice type and form) include Burma, Cambodia, India, Pakistan, Uruguay, and Vietnam, while the most highly reliable exporters of long grain white rice include Uruguay and the United States. [Read More]

As requested, the report provides:

an overview of the rice industry in the United States and other major global producing and exporting countries,
information on recent trade trends and developments in the global market for rice,
a comparison of the competitive strengths and weaknesses of rice production and exports in the United States and other major exporting countries,
a quantitative assessment of the impact of government policies and programs of major producing and exporting countries, and
an overview of the impact on the U.S. rice industry of rice exports from the highlighted countries to the United States and to traditional markets of the United States.

The report features quantitative analyses of policies and production changes that affect the global rice industry. These policy measures include production policies, consumption policies, and trade policies. Quantitative analyses used the RiceFlow model, a global partial-equilibrium model of three types of rice (long grain, medium and short grain, and aromatic), and three different processing levels (paddy or rough, brown, and white rice). The report also includes information on competitiveness of rice production in selected producing countries. The report provides a description of rice production, consumption, and trade, by region, including:

The United States [Read More]
East Asia [Read More]
South Asia [Read More]
Southeast Asia Mainland [Read More]
Southeast Asia Islands [Read More]
South America [Read More]

Rice: Global Competitiveness of the U.S. Industry (Inv. No. 332-549, USITC publication 4530, April 2015) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4530.pdf.

USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the USITC's objective findings and independent analyses on the subject investigated. The USITC makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

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