Troubled Venezuela agrees to continue rice-for-oil deal

Mar 10, 2015 News

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…paddy production to reach 1M tonnes
Authorities are predicting paddy production to touch one million tonnes for the first time ever this year.

According to the Ministry of Agriculture, paddy production is likely to also reach the $50B mark for farmers also.
The statements from the Ministry over the weekend came amidst news that Venezuela has agreed to renew its oil-for-rice deal with Guyana for another year.  There has been worry over the rice deal as Venezuela is facing severe internal turmoil made worse by the drop of oil prices on the world market.
The deal would spell good news for Guyana’s stock as production has been increasing steadily in recent years as farmers saw better yields and with more acreage introduced. But there have been questions over the market for rice as well as the price being offered.  Paddy prices and timely payments from millers to farmers have been critical issues engaging authorities with protests last year and continuing in recent weeks in Essequibo and Berbice.
The Ministry said that shipments to Venezuela would start shortly after a team from the Guyana Rice Development Board (GRDB) travelled to Venezuela to seal the deal for this year’s shipments. The team was led by Minister of Agriculture, Dr. Leslie Ramsammy, who recently reportedly took a few weeks off to seek medical attention overseas.
“Minister Ramsammy and his team had intensive discussion with their colleagues in Caracas and agreed on the terms for shipment of rice to Venezuela, with shipment to coincide with the

beginning of the harvesting of the first crop of 2015.”
The first harvesting, the Ministry said in the statement, is about to begin and the first shipment to Venezuela will take place just before harvesting gets into full gear.
Venezuela will purchase an amount similar to the 2014 amount, which is close to 200,000 tonnes of paddy and rice.
Under the 2014 agreement, Guyana exported 150,000 tonnes of paddy and 50,000 tonnes of white rice valuing US$114M to the Spanish-speaking state.
“The 2015 amount with a variation in the proportions of rice and paddy will amount to about the same amount as 2014. The price for paddy and rice agreed on will also be similar to 2014.”
According to the Ministry, in 2014, exports to Venezuela accounted for about 34 percent of the total production of rice in Guyana.
“It is expected that exports in 2015 will be about 30% of production, even though the actual amount would be approximately the same. This is because we expect a bigger production in 2015.
Together with increased export to the regular markets, newer markets in Central America and Africa will be added to the increasing destinations for Guyana’s rice.”
In 2015, local consumption will also see a dramatic increase, the Ministry said.
“The rice cereal factory in Essequibo will be operational by the second crop. In addition, a rice flour factory will become operational also by the second crop this year. Already, we have identified an export market for rice flour.”
Agriculture Minister, Dr. Leslie Ramsammy, said that expectation for 2015 for the rice industry is an exciting one.
“In the meanwhile, we are working with various stakeholders to address some of the ongoing challenges, such as timely payment to farmers. The 2014 production saw farmers selling approximately $44B in paddy to millers. As of today, there is an outstanding amount of close to $300M owed to farmers.”
Throughout the year, Ramsammy said, the Government has made available to farmers $5B from a revolving account.
“At present, we are completing all outstanding payments so that as the new harvesting begins, farmers would have been paid fully for the $44B they sold in 2014.”
This year, GRDB is projecting the value for paddy to be between $45B- $50B.
Ramsammy is also predicting that paddy production will surpass one million tonnes for the first time in history.
“The Government is working with the stakeholders that this enormous amount of about $50B can be paid on a more timely basis. It should be noted that between export and local consumption, most of the carry over rice from 2014 has been accounted for. Thus, as the new harvesting takes place, stocks will be replenished.”
The rice pact was initiated in 2010 between Guyana and the late Venezuelan leader, Hugo Chávez. The agreement aimed to strengthen food security in both countries.
In 2011, Guyana signed a US$54 million agreement with Venezuela to supply 50,000 metric tonnes of paddy at US$520 per metric tonne, and 20,000 metric tonnes of white rice at US$800 per metric tonne.
In 2013, Venezuela agreed to take 140,000 tonnes of paddy this year and a further 70,000 tonnes of white rice. (Leonard Gildarie)

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