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“This is another great day for U.S. agriculture and, in particular, for our rice growers and millers, who can now look forward to gaining access to the Chinese market,” Perdue said. “This market represents an exceptional opportunity today, with enormous potential for growth in the future. The agreement with China has been in the works for more than a decade and I’m pleased to see it finally come to fruition, especially knowing how greatly it will benefit our growers and industry.”
According to the USDA, China is the world’s largest producer and consumer of rice. Since 2013, it also has been the largest importer, with imports reaching nearly 5 million tons last year. When the new rice protocol is fully implemented, the U.S. rice industry will have access to this market, significantly expanding export opportunities. U.S. rice exports can begin following the completion of an audit of U.S. rice facilities by China’s General Administration of Quality Supervision, Inspection and Quarantine.
“The President and Secretary Perdue have opened the door; now it's time to move to our technical to-do list so that rice shipments can occur,” said Carl Brothers, chairman of the USA Rice International Trade Policy Committee. “We know China wants to send a team here to inspect mills and facilities certified to ship to China, and we are working with USDA to make that happen in the quickest and most efficient way.”
USA Rice said the protocol, which is the most complex rice phytosanitary agreement the United States has ever entered into, contains an operational work plan that spells out the responsibilities of companies wishing to export in order to protect against the introduction of certain pests into China.
“The focus of our work is now on supporting a successful visit by China’s inspectors,” said Betsy Ward, president and chief executive officer of USA Rice. “We waited a decade for the protocol to be signed and our members are anxious to meet the demand of China’s consumers for safe, high-quality U.S. rice.”
Ward said China consumes the equivalent of the entire U.S. rice crop every 13 days and the USDA expects China to import 4.8 million tonnes of milled rice in 2017-18, by far the world’s largest import market. Imports have surged since the beginning of this decade, and have recently been between 4.5 million tonnes and 5 million tonnes annually. China opened its rice market when the country joined the World Trade Organization in 2001, but U.S. rice was barred from the market because of the lack of a phytosanitary protocol between the two governments. Southeast Asia supplies much of China’s import demand; a situation that will likely continue.
Demand for U.S. milled rice, at least initially, is expected to be strongest in coastal areas among higher income consumers and in the hotel and restaurant trade.
“Food safety is a major issue for China’s consumers, and U.S. rice is well positioned as a safe, high quality food,” said Chris Crutchfield, chairman of the USA Rice Asia/Turkey Promotion Subcommittee. “We have promotion programs up and running in China in anticipation of today’s signing and exports to come. We’ll tailor our promotion activities going forward to include large trade seminars here and in China to educate Chinese consumers about the types and qualities of U.S. rice. We will also focus on quality and the capabilities of our industry in our stepped-up trade servicing activities.”
Ward along with USA Rice believes this new step is promising for trade and market access.
“Today’s news is a shot in the arm for our industry and couldn’t come at a better time,” Ward said. “The president and Secretary Perdue’s leadership was critical, and we thank them and their team again. We know that market access in China is difficult, and rice shipments will not happen tomorrow, but we are much closer to meeting China’s market demand with U.S. rice.”
This agreement comes a few months after the United States and Chinaactively joined economic dialoguetalks to address agricultural trade, financial services, investment, and energy issues between the two countries in a new economic cooperation with a 100-day action plan. The first step in the process was seen in June when both countries agreed to allow the United States to begincommercial shipments of U.S. beefand beef products to China for the first time since 2003.