U.S. Rice Lobby Backs Japanese Plan to Export Rice
by admin on May.16, 2008, under Export Import
An organization of the largest U.S. rice growers supported a plan to enable Japan to sell some of its stockpile of the food staple to ease soaring prices.
A spokesman for the U.S. Rice Producers Association, based in Houston, Texas, said today that the group would not oppose Japan’s emergency rice sales. Japan’s reserve, which amounts to about 4.4 percent of the world’s rice trade, may help ease prices that have doubled in the past year.
Japan, the second-biggest market for U.S.-grown rice, is obliged to import rice from the U.S. under the Uruguay Round of world trade talks that ended in 1993 and can’t re-export it without U.S. government approval. The American rice lobby’s backing is key to getting support of Congress and the Bush administration.
“We would not want this trade agreement to be suspended indefinitely, but during this emergency period it makes sense for Japan to be allowed to sell some of its stockpile,” said Thomas Wynn, spokesman and chief economist for the association, in a phone interview. “Japan is also in a good geographical situation to help offset the supply problems in Asia.”
Japan is negotiating with the Philippines, the world’s largest importer of the grain, for shipments from Japan’s supplies of about 1.2 million metric tons, a government official said in an interview in Tokyo earlier this week.
Representative Barney Frank, chairman of the House Financial Services Committee, said today that the U.S. should not stand in the way. “I’m inclined to be supportive of that,” he said during a hearing on the global food crisis.
USTR’s Silence
The plan would need approval from the office of the U.S. Trade Representative, which consults closely with domestic rice producers. USTR spokeswoman Gretchen Hamel declined to comment.
Andrew Natsios, former chief of the U.S. Agency for International Development and the president’s special envoy to Sudan, said the Japanese plan could deflate the bubble in the rice market.
“There is a lot of hoarding going on and this is pushing up the price,” he said in a telephone interview. “The best way to deal with it is driving grain onto the international market.”
Japan imported 630,550 tons of rice in the year ended March 31 as part of the WTO agreement to seek 770,000 tons a year. Thailand, the U.S., China and Vietnam were the major suppliers.
The U.S. Department of Agriculture expects the rice trade to decline this year, falling to 27 million tons from 31 million tons a year earlier.
Rice Market `Bubble’
Tom Slayton, a former U.S. agricultural attaché to Thailand and now an analyst, said the release of stocks from Japan could have a significant effect on prices.
“Firstly, it could help prick the bubble in the market and bring prices down,” he said. “Secondly, the longer the bubble goes on the more tempting it is for countries to turn away from international trade and build up their own stocks and supplies which would be very damaging in the longer term.”
Earlier today, the benchmark price for rice exported from Thailand, the world’s biggest supplier, breached $1,000 a metric ton for the first time as importers rushed to secure supplies. On the Chicago Board of Trade, rice for July delivery fell 0.75 cent today, or 3.4 percent, to 21.49 cents a pound. Bloomberg