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Delegation to visit Venezuela on rice deal continuation
Minister of Finance, Winston Jordan, is expected to lead a team as early as next week to Venezuela to discuss the continuation of the multi-billion-dollar ‘rice-for-oil’ deal.
Finance Minister, Winston Jordan
According to Government officials yesterday, the rice deal is expected to expire this year.
Guyana would badly want the deal to continue as the market with Venezuela is a critical one for the rice industry.
Under this year’s agreement, some 120,000 metric tonnes (Mt) of paddy along with 84,000 Mt of white rice have to be supplied to Venezuela. The deal is worth around US$113M.
Following the announcement of a significant oil find offshore Guyana in recent months, the first for the country, relations with neighbouring Venezuela has been at an all-time low.
This is because a claim has been made on the waters where there drilling took place by Venezuela. There were fears that Venezuela could scrap the deal. Local officials have assured that a recent signing of this year’s deal is testimony that the arrangements are not in any way threatened. As a matter of fact, shipments of rice and paddy are being made.
Following a fall in world prices in the last couple of years, oil-rich Venezuela, one of the biggest producers in the world, has seen shortages of critical items, including food, toilet paper, detergent and even medicines.
Venezuela is not likely to back out anytime soon from the rice deal, not only because of the shipping proximity of Guyana, but because this country owes it tens of millions of US dollars for oil
A team from Guyana is expected to visit Venezuela next week to have talks on the continuation of the rice-for-oil deal.
taken under the PetroCaribe deal which is offered to a number of participating countries within Latin America and the Caribbean.
Guyana itself badly needs the deal because it has been producing at record levels in recent years because of good yields. Last year alone, the industry recorded 630,000 tonnes of rice, its highest ever.
Venezuela has been relatively stable market since 2010.
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 and a further 70,000 tonnes of white rice.
The previous administration has been eyeing producing one million tonnes of paddy this year.
The Agriculture Ministry has been targeting paddy production to hit the $50B mark for farmers.
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.
Last year, exports to Venezuela accounted for about 34 percent of the total production of rice in Guyana.
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