THE WORLD -- The coronavirus pandemic, officially known as the “COVID-19” outbreak, has seemingly reached every corner of the globe and affected nearly every aspect of everyday life since news of it hit the press in mid-January. International trade has been no exception to the disruptions.
Cargo ships continue to chug across our oceans carrying every type of commodity and barges continue to travel down the Mississippi loaded with grain, meanwhile, companies are learning how to navigate trade in this new pandemic world and new business ventures have been put on ice for now.
While most normal trade and business transactions can continue to occur remotely using phone and internet, new business is spurred through international travel to trade shows, international negotiations, and business-to-business trade missions.
Many market promotions and face-to-face meetings have been halted because rice and major commodity export companies have banned all international and domestic travel for employees, including several USA Rice members, to prevent the spread of the virus. Additionally, several countries are promoting “social responsibility” by restricting large gatherings of people so some promotions that USA Rice planned to conduct over the next two months will be delayed. For instance, in Singapore, events with 250 participants or more are to be deferred or cancelled under COVID-19 social-distancing measures.
History continues to be made this week with unprecedented business closures, travel bans, and event cancellations, including:
- Cancellation of the Group of 20 (G20) Agriculture Ministers meeting in Riyadh, Saudi Arabia, scheduled for next week.
- Postponement of the World Trade Organization (WTO) Ministerial meeting in Kazakhstan, originally scheduled for June.
- The unprecedented closure of the WTO offices and cancellation of meetings in Geneva, Switzerland.
- Postponement of the USDA trade mission to Morocco and Northern Africa, originally scheduled for this month.
- Postponement of the SIAL China food show in Shanghai from May to September. The FOODEX Japan 2020 show and the FHA Food and Beverage 2020 show in Singapore have been cancelled.
- Shuttering of the House and Senate office buildings and the U.S. Capitol with exceptions for staff, Members, and essential visitors.
- Postponement of trade negotiations with the European Union and the United Kingdom, scheduled to take place this month.
- Closure of the CME Group’s Chicago trading floor after close of business today; electronic trading will continue to take place.
“With international events cancelled as far out as June, no one knows what the full impact of COVID-19 on U.S. rice exports and imports for 2020 will be,” said USA Rice President & CEO Betsy Ward. “What we do know is while travel may be at a standstill, U.S. rice farmers are already busy making a crop this year and the rest of the industry will be working hard to sell it domestically and abroad.”
With many people entering extended quarantine periods comes an unexpected silver lining: mass disappearance of shelf-stable rice throughout grocery stores around the globe keeping U.S. rice mills busy helping to restock the shelves.
Meanwhile, China, the hardest-hit country so far, is beginning the recovery process and seeing significant reductions in new cases. Questions remain about China’s ability to meet their recently-agreed-to U.S.-China Phase One Agreement purchase commitments this year, including the purchase of U.S. rice. Until China fully opens for business, U.S. exporters are paying a pretty penny, with as much as $3,200 in freight surcharges for shipments to Asia according to the Agriculture Transportation Coalition.
USA Rice continues to work with the U.S. government and our in-country consultant to find opportunities for entry into this new market for U.S. rice.