Thursday, February 23, 2012

Everyone Loves Cheap Basmati Rice

And love for the United States of America won't get you a cup of coffee:
DAYTON, Texas - The talk of the day among Ray Stoesser and other rice farmers is Iraq's decision not to buy U.S. rice, a stinging move that adds to a stressful year punctuated by everything from drought to unusual heat.

..."That's just not right," the 63-year-old Stoesser fumed. "If we've got some rice to sell, they ought to pay a premium for it just because this is the country that freed them."

Iraq imports most of its rice, about 1 million metric tons per year, making it a significant player in the global market. In the past decade, about 10 percent to 15 percent of that total came from the United States. But Iraq hasn't bought any U.S. rice since late 2010.

..."Iraq seems to be buying on price, and the lowest offered price is coming now from India," Aaronson said.

In Iraq, officials said the decision to forego American rice largely came down to a matter of taste. A Trade Ministry official said Iraq has decided to import only long-grain basmati rice from India due to its wide acceptance nationwide and cheap price.

"We have no problem with the U.S. rice specifically, which was widely acceptable by Iraqis, but we are seeing a demand for the Indian rice rather than others, which is also bought in good prices," he added.

...Iraq had accounted for about 2 percent to 5 percent of U.S. sales each year. It stopped buying American rice during the Gulf War in the early 1990s and in 2003, when the most recent war started, Aaronson said. Every other year, though, during the war, insurgency and U.S. occupation, the Iraqi Grain Board bought American rice.

Iraq's abandonment of U.S. rice comes as Haiti, once an exclusively American market, and Central America, another major buyer, also seek cheaper options elsewhere.

The lost sales sting because the U.S., unlike China and other major rice-growing nations, exports nearly half of its crop. With less demand from overseas, prices have dropped while production costs, including for fuel, have risen.

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