Iraqi rice market targeted by USA Rice Federation

Increasing U.S. rice exports to Iraq is a top priority of the USA Rice Federation. Iraq imports an average of 1 million metric tons a year and was the number one export market for U.S. rice before the 1990-91 Iraq-Kuwait war. The U.S. embargo on exports to Iraq in 1990 meant an end to American rice sales there from 1991 to 2003, with an estimated loss to the industry of $2 billion. While U.S. rice sales resumed in 2005, Vietnamese and Thai interests continue to dominate that market.

“We are working hard to make the United States the top supplier of rice to Iraq,” said Betsy Ward, USA Rice Federation president and CEO. “We have been making the case for U.S. rice in this potentially large export market since the embargo was lifted in 2003.”

As early as 2000, U.S. rice re-entered the market via the World Food Program. Those non-commercial shipments were important for U.S. rice to re-establish contact, but regular commercial trade did not begin until 2005.

The USA Rice Federation met with the Iraqi Grain Board in 2004 at a summit designed to highlight the U.S. rice industry and detail shipping and payment issues. USA Rice Federation members also began urging Congress to support the industry’s efforts to rebuild trade with Iraq and testified before the House Agriculture Committee on behalf of the industry.

As a result, the first commercial shipment of American rice since 1990 was made in 2005. Total exports for 2005 reached 310,400 metric tons and U.S. rice exports to Iraq in 2006 and 2007 totaled more than 600,000 metric tons.

Despite that early success, rice sales since 2006 have declined as a result of price competition with Southeast Asian suppliers. In response, USA Rice Federation is increasing efforts to gain a greater share of this major rice market.

In August, USA Rice Federation hosted a 12-member Iraqi marketing delegation comprised of representatives of the deputy prime minister’s office, the Grain Board of Iraq, the Ministry of Trade, and the General Company for Grain Trading. The delegation visited rice millers, exporters and farmers in Arkansas and Texas.

The tour educated the delegates about U.S. grain marketing systems in an effort to increase Iraqi confidence in the United States as a reliable supplier of top-quality rice. USA Rice Federation also stressed the importance of awarding tenders to reputable companies that could perform on the contracts.

In September, 10 U.S. senators sent a letter to President Bush requesting assistance in further opening the Iraqi market to U.S. rice. A similar letter was sent by 19 House lawmakers. The letters addressed concerns over Iraq’s low domestic rice production and the inconsistency of the country’s rice tenders.

Given that rice consumption has been increasing over the years, those factors could lead to an inadequate supply of rice for the country and a possible food shortage. The letters urged the president to support the U.S. rice industry by encouraging talks between U.S. Ambassador to Iraq Ryan Crocker and Prime Minister Nuri al-Maliki, Deputy Prime Minister Barham Salih, and Minister of Trade Abdul-Fallah al-Sudani on increasing U.S. rice sales.

Fred Kessel, the new USDA/FAS agricultural counselor to Baghdad, met in October with USA Rice Federation prior to leaving for his post in Baghdad. USA Rice Federation staff highlighted the priority that its members place on the Iraq market and told him they would provide promotional materials on rice in Arabic to distribute to key Iraqi contacts.

Overcoming the hurdle of re-entry into the market is not the only obstacle the industry faces. Promoting the brand within the country is the biggest concern. U.S. rice is not identifiable to consumers because the bulk of it is currently distributed via food banks and the ration system.

The Ministry of Trade recently announced it will begin to allow private grain imports in 2008, which would make it easier for U.S. exporters to market to consumers. As exports increase, USA Rice Federation’s promotional activities will continue to build upon the high-quality image of U.S. rice.

“USA Rice Federation has been on this issue from the beginning, and re-establishing the U.S. rice trade in Iraq remains a top priority for us,” Ward said.

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