Dec 11, 2014
MEXICO CITY, MEXICO -- Yesterday, the Government of Mexico (GOM) announced a re-imposition of a 20 percent duty on Asian rice to begin on vessels arriving after January 10, 2015.
The GOM removed the long-standing duty on grains from all origins back in 2008 as a way to reduce the price of basic commodities to its population. With cheap prices and zero duty, Asian rice began to enter Mexico, and by 2013 and 2014 imports had skyrocketed, cutting into the traditional U.S. market for paddy and milled rice.
The U.S. market share for milled rice, once more than 95 percent has fallen this year to 34 percent. Vietnam and Thailand are the primary origins making inroads today. Pakistan, once a player, can no longer export to Mexico due to phytosanitary issues.
"Local traders, packers, and millers we've spoken with believe the first few months of 2015 will present great opportunities for the sale of U.S. rice to Mexico, given our large high-quality crop and the new import duty on Asian origin rice," said Betsy Ward, USA Rice Federation's president and CEO.
Ward went on to point out that the competitive advantage could end up being short-lived if the Trans Pacific Partnership (TPP) is signed in 2015.
"Mexico is anxious to conclude TPP talks, and as it looks now, Vietnamese rice would gain back some or all of its duty advantage under that agreement," she said.
USA Rice is monitoring this situation very closely and will keep members up to date on events as they transpire.
Contact: Jim Guinn (703) 236-1474