Country Report Guyana
The Economist Intelligence Unit, May 2013, Pages: 28
Guyana and Venezuela have signed a one-year extension to an export agreement that should result in 210,000 tonnes of rice, with a value of US$130m, being shipped to Venezuela.
The deal is part of the PetroCaribe agreement, a concessional trade arrangement that allows Guyana to repay part of its oil debt to Venezuela through commodity exports. It provides for Guyana to ship 140,000 tonnes of seed paddy at a price of US$520 per tonne and 70,000 tonnes of white rice at US$800 per tonne this year. These lucrative prices (compared to US$512/tonne and US$605/tonne offered by European buyers for paddy and white rice, respectively) have been partly responsible for the sharp increase in national production as well as the progressive growth in annual rice exports to Venezuela, from 20,000 tonnes in 2005, when the agreement was initiated, to the contracted 210,000 tonnes this year.
Guyana's dependence on the Venezuelan market, which absorbs 60% of its current rice production, has implications for the future growth of the industry. The delay in signing the agreement, which has been extended each year since 2005, stemmed from the recent change of government in Venezuela. This caused concern among rice farmers, whose paddy was accumulating as millers were either refusing to purchase it or were offering extremely low prices (on average, US$260 per tonne); this resulted in crop losses and significant cashflow problems that impaired farmers' ability to meet outstanding obligations.
Country Report Guyana
Guyana secures important rice agreement with Venezuela
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