Demand for U.S. Rice in Colombia is Back

BOGOTA, COLOMBIA – Last week, the entity that oversees the sales and distribution of Colombian import certificates for U.S. rice, Colombia Rice Export Quota, Inc. (COL-RICE), held the largest of their three quota auctions for 2022.  A total of 85,913 metric tons (MT) milled rice equivalent of U.S. rice quota was made available to the market, ultimately providing an opportunity for quota holders in the U.S. to ship paddy, brown, milled, or broken rice duty-free, as long as it clears Colombian customs by June 30, 2022.

Last January’s quota auction saw only 8 percent of the tonnage utilized out of 82,213 MT that was made available.  With a record Colombian rice crop in 2021 and inflated food prices, demand in Colombia sank for the first time since the signing of the Colombia Trade Promotion Agreement (TPA) in 2012, leading to just 6 percent of the annual U.S. tariff rate quota being subscribed.

“Through as late as last fall, we expected the demand for imported rice in Colombia to remain low, until we heard that Colombia had overstated their stocks by a significant amount, leading to creation of demand prior to last week’s auction,” said Michael Rue, California rice producer and alternating chair of the COL-RICE Board of Directors.  “If the January auction serves as a barometer for the 2022 demand in Colombia, I’d say that it appears to be back for now.  When you look at our top export markets for 2021, it is unusual to see that Colombia had disappeared after so many years of market growth, but we have strong relationships with our customers there and are glad to see that they’re picking back up as a viable market this year.”

The January auction saw 85,913 MT of import licenses awarded, remarkably 100 percent of what was available.  The remaining two auctions will be held in June and October for delivery throughout the second half of the year with a total available tonnage of 36,772 MT.

Since the signing of the TPA and implementation in 2012, the U.S. has had access to an annually increasing duty-free quota for those who are awarded import certificates in COL-RICE auctions.  Proceeds of the auctions are split between the U.S. and Colombian rice industries, with more than $86 million contributing to rice research across the six rice-growing states to date.  

For U.S. rice entering Colombia outside the quota, the duty decreases annually, from 80 percent at inception to 49.2 percent this year.  The duty will eventually phase-out in 2030 and U.S. rice will be able to enter Colombia duty-free and without purchasing import certificates.

The U.S. ships primarily long grain rice to Colombia in both paddy and milled forms and has seen some recent market growth for California medium grain rice used for sushi and other international cuisines.