US finds recipe for rice export success to China as Australia loses grain ground

Australian rice growers want greater access to China. Photo: Kate Geraghty
Australian rice growers want greater access to China. Photo: Kate Geraghty

First, the US won a better deal to export rice to Japan.

Now, Australian rice growers fear their Californian competitors have gained a head start on entering the lucrative and bigger Chinese market.

US and Chinese authorities are believed to be close to agreeing on a phytosanitary protocol to export US rice to the world's biggest grain market.

Australian rice growers have tried for the past eight years to negotiate such a deal but have failed to win priority from the Grains Industry Market Access Forum, which co-ordinates export deals, and authorities in Beijing.

Ricegrowers' Association of Australia executive director Andrew Bomm said selling rice to China would be more lucrative than exporting to Japan because its fast-growing middle-class had a taste for clean and green imported produce.

Mr Bomm said China was also more pragmatic about importing rice, as opposed to Japan where the grain was considered a powerful symbol of self-sufficiency.

It was also among the thorniest issues in hammering out the Trans-Pacific Partnership (TPP) deal, which the 12 nations around the Pacific Rim struck last week.

"I don't think there is the same level of romanticism in China," Mr Bomm said.

"They are more pragmatic and . . . are a significant importer of rice, but not currently from Australia.

"We understand the US is developing a importation protocol. If that occurs, that would put us at a significant disadvantage because our main competitors are Californian medium grain growers."

The US has lobbied Chinese authorities to allow American rice imports for more than 15 years. In that time, China has switched from being a rice exporter to importing 2 million tonnes or more of long grain rice.

Vietnam has provided most of the Chinese imports because of price, proximity and quality. However, the US and Australia haven't been able to sell their product because of the lack of export protocols.

Dwight Roberts, president of the Houston-based US Rice Producers Association, said China requested that the phytosanitary protocol for rice be signed in Beijing.

However, a date had yet to be confirmed.

If the agreement is struck, it will be the second time Australian rice growers have lost out to the US.

Under TPP trade pact, Japan has agreed to create a 6000 tonne quota for Australian rice and cut tariffs on several rice preparation products.

This is significantly less than the 50,000 tonne quota for US rice exports to Japan.

Mr Bomm said that "trade agreements are inherently political beasts and any political influence that you can exert means you can extract the sort of concessions that you want".

"I don't necessarily apportion blame for getting a worse deal because Australia is not the US and can't exert the same influence," he said.

"It's very disappointing that we have a guaranteed access. But, by the same token, it's better than nothing. It's a modest gain and we have to give credit where credit is due."

Mr Bomm said Australian rice growers weren't aiming to feed the masses in Asia because it could never produce enough rice.

Instead, he said farmers wanted to leverage Australia's clean image to target the premium market.

"Rather of characterising what we can do as being the food bowl of the world, we'd like to say we're the delicatessen. It's providing that really high-end, high-quality product into those wealthier premium markets," he said.

with Bloomberg

This story US finds recipe for rice export success to China as Australia loses grain ground first appeared on The Sydney Morning Herald.