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Midagri aims for 40% of the rice consumed in Colombia to be Peruvian

Midagri aims for 40% of the rice consumed in Colombia to be Peruvian

Colombia occupies 97% of the national pilled rice exports. Faced with the impossibility of gaining ground in Ecuador and Bolivia, Midagri sees it plausible to export up to 100,000 MT of the virtuous Peruvian cereal to that country, for more than US$70 million each year.

The Department of Economic Studies (DEE) of the Ministry of Agrarian Development and Irrigation (Midagri) He assured that the lifting of trade restrictions adopted by Colombia in the Andean Community (CAN) —of which both countries are members— will allow up to 100,000 tons of Peruvian rice to be exported annually, for more than US$70 million, to that nation.

What was the previous scenario? Through the technical note on the agricultural economic situation 01-2023-Midagri, the DEE recalled that the “intransigence” of the government of that country, which did not grant the corresponding export permits for the Peruvian cereal, caused the dispatches of the piled variety to be null in the years 2010, 2014, 2015, 2017 and 2018.

“The behavior of milled rice exports is very unstable because its main destination market, Colombia (97% of the total exported), has been restricting access to Peruvian rice in a sustained manner through the manipulation of export permits. import and phytosanitary certificates,” the office said.

As a result, the Ministry of Foreign Trade and Tourism (Mincetur) issued Supreme Decree 003-2018-Mincetur, which applied trade sanctions to Colombia (the second largest producer in the CAN) for restricting access to our rice. Four years later, in November 2022, it published Supreme Decree 013-2022-Mincetur, which suspends said measure with the prior commitment of the Colombian nation to restore preferential treatment, free of trade restrictions.

But by July of that year, the market had already been “opened”. Between July and November 2022 alone, a total of 18,993 MT were sent to the coffee country, 97% of the total shipped to the world, which was 19,410 tons. But it is still far from the peaks of more than 44,681 MT obtained in 2020. Now, Midagri aims to more than double this amount exported.

“Peruvian export activity has not yet reached a level of competitiveness and specialization that allows it to maintain continuity in a highly competitive international market with very unstable prices. In this sense, Peruvian rice can only access markets where it is treated preferential tariff, freed from the payment of tariffs, as is the case of the CAN countries”, sent the DEE.

In this sense, Peruvian producers aim to occupy 40% of the rice ingested by Colombians. Colombia is the second rice-producing nation in the Andean subregion, after Peru, with a per capita consumption of 42 kilograms, whose production is markedly seasonal (second semester), and presents an annual deficit of around 250,000 tons, which must be covered with imports.

“Peruvian rice, exported to Colombia, stands out for its quality and a very competitive price in the sub-region. Hence, the necessary conditions exist to consolidate in the Colombian market as one of its main suppliers with supply levels that could reach up to 100,000 tons per year in the best of cases,” highlighted the Midagri report.

Peru, the first rice producer in the CAN

Regarding production, Peru is the first rice producer in the Andean Community, followed in importance by Colombia, followed by Ecuador and Bolivia. Regarding yield, our country shows a higher level of productivity per hectare.

Regarding sales costs, the most important destination market for Peru, such as Colombia, imports at lower unit prices in relation to other countries, along with Ecuador.

But what if we also export to Ecuador and Bolivia, based on the benefits of the CAN? The DEE explained that, in the case of the former, there is no phytosanitary protocol to be able to export rice to that nation, a situation that has led the national rice guilds to request the National Agrarian Health Service (Senasa) to initiate coordination with its counterpart. Ecuador, in order to specify a protocol.

With Bolivia, the situation is worse. The altiplánicos have a tariff-free entry agreement for rice from Mercosur, a group made up of Brazil, Uruguay, Paraguay and Argentina. These are very competitive cereal-producing countries in the international arena, hence the Peruvian product is not able to compete with these suppliers in the Bolivian market.

“In this sense, it is recommended that Peruvian exporters begin a process of consolidating their exports within the framework of a process of formalization and professionalization of their activities, in a medium and long-term horizon,” Midagri concluded.

The data

Colombia applies a tariff of 80% ad valorem CIF to countries with which it has no trade agreement, such as the world’s largest rice exporters: Thailand, India, Vietnam, Turkey, etc. Likewise, it grants a tariff reduction to the member nations of Mercosur, which pay one of 67%. In other words, “it shows a market with high tariff protection,” according to the Peruvian authorities.

Source: Larepublica

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