Summary
EU rice producers’ representatives are calling for safeguard measures to be used against rice imports from Cambodia and Myanmar under the EBA. Yet EC analysis shows lower rice imports in 2016 from EBA countries than in 2015, while EU production was up 8.2% in the 2015/16 season. The discussion highlights again the availability within the EU of the use of quantitative controls in sensitive agricultural sectors, where EU producers interests could be threatened.
In November 2016 EU rice producers’ leaders called on the EC for action to address the ‘difficult EU rice market situation’, arising from ‘increased duty free imports coming into the EU mainly from Cambodia and Myanmar under the Everything But Arms (EBA) agreement’. It was claimed imports from these two LDCs are depressing prices for EU rice. Copa-Cogeca is calling for the European Commission to activate ‘the safeguard clause with application of tariff rate quotas on imports under the EBA to prevent the market from destabilizing further’. EU rice producers have also called for rice to be ‘treated as a sensitive product’ in EU trade negotiations. (1)
The safeguard provisions in the rice sector allow the EC to take appropriate measures where ‘quotations or prices on the world market reach a level that disrupts or threatens to disrupt the availability of supply on the EU market and where that situation is likely to continue or deteriorate, or if, due to imports or exports, the EU market is affected by, or is threatened with, serious disturbance likely to jeopardise the achievement of the objectives set out in Article 33 of the Treaty’. (2)
According to EC analysis from 24th November 2016, despite record global rice production, the global rice market is beginning to tighten with a small decline in global stocks in 2016/17. From January to October 2016 total EU rice imports were up 2.8% compared to the corresponding period in 2015. However, the EC reports imports from EBA beneficiaries were actually down 3.2% from January to October 2016. This took the % share of imports coming from EBA countries down to 27% from 29% in 2015. (3)
EU Rice Imports Cumulative Total Jan – Sept/Oct 2016 From All Sources and From EBA Suppliers
| EBA Suppliers | Total Imports | |||||
| Jan-Sept | Jan –Oct | % annual change
Jan-Sept Jan-Oct |
Jan-Sept | Jan-Oct | % annual change
Jan-Sept Jan-Oct |
|
| 2014 | 222,592 | 306,432 | – – | 851,877 | 932,673 | – – |
| 2015 | 288,066 | 316,441 | +29.4%
+3.3% |
984,062 | 1,105,683 | +15.5%
+18.5% |
| 2016 | 274,597 | 306,432 | -4.7% -3.2% | 1,022,993 | 1,136,950 | +4.0% + 2.8% |
Source: EC, ‘Rice Market’, Committee for the Common Organisation of Agricultural Markets, 24th November 2016
In December 2016, the EC reported that in the first three months of the 2016/17 season, total EU rice Imports (excluding broken rice) were ‘down 2%’, with imports from EBA beneficiaries ‘down 5%’. For the 2016/17 season the EC foresees a marginal increase in total EU rice imports (+1.17%) but with a decline in imports of japonica rice (-4%). In December 2016 the EC reported EU Rice Market Prices as ‘stable and close to average levels’. (5)
| Total EU rice imports (tonne milled equivalent) | EU EBA rice imports tonnes milled equivalent | |||||||||
| September | October | November | September | October | November | |||||
| 2016/17 | 88,868 | 201,829 | 295,087 | 21,763 | 54,346 | 78,534 | ||||
| 2015/16 | 104,897 | 216,517 | 301,303 | 27,228 | 55,603 | 82,709 | ||||
| 2014/15 | 94,232 | 175,077 | 238,971 | 25,951 | 47,081 | 66,942 | ||||
Meanwhile EU rice production in the 2015/16 season was estimated to be 8.2% above the production level in 2014/15, while consumption was 4.6% higher. For 2016/17 it was estimated that production would only increase marginally (+1.6%), while consumption would continue to increase, but at a slower rate of 2.9%. Stock levels for 2015/16 meanwhile are projected to be 36% higher than in 2014/15, with a further 20.2% increase projected for the 2016/17 season. (3)
Overall the EC concluded rice prices were coming out of seasonal lows, with similar prices prevailing in the 2016/17 season as in the 2015/16 season. (3)
EU production, Consumption and stocks ‘000 tonnes
| Production
Tonnes % change p.a. |
Consumption
Tonnes % change p.a. |
Stocks
Tonnes % change p.a. |
|
| 2014/15 | 1,637 | 2,576 | 441 |
| 2015/16 | 1,772 +8.20% | 2,694 +4.6% | 599 +36.0% |
| 2016/17 | 1,800 +0.02% | 2,773 +2.9% | 720 +20.2% |
Source: EC, ‘Rice Market’, Committee for the Common Organisation of Agricultural Markets, 24th November 2016
Rice farmers are also calling for less restrictive ‘maximum residue levels for Tricyclazole’ a pesticide, which it is claimed, is the only plant protection product capable of preventing ‘rice blast which has a serious impact on farmers production yields and grain quality’.
Source:
(1) Copa-Cogeca, ‘Newly re-elected Copa-Cogeca rice working party chairman Giuseep Ferraris warns of difficult market situations’, 10 November 2016
http://www.copa-cogeca.be/Main.aspx?page=Archive
(2) EC ‘The EU rice regulatory regime’, February 2015
http://ec.europa.eu/agriculture/sites/agriculture/files/cereals/factsheet-rice_en.pdf
(3) EC, ‘Rice Market’, Committee for the Common Organisation of Agricultural Markets, 24th November 2016
http://ec.europa.eu/agriculture/sites/agriculture/files/cereals/presentations/rice/market-situation_en.pdf
(4) EC, ‘Agriculture in the European Union Statistical and Economic Information Report 2013, December 2013, Table 3.1.1 ‘Share of products in agricultural production’ (2012)
https://ec.europa.eu/agriculture/sites/agriculture/files/statistics/agricultural/2013/pdf/full-report_en.pdf
(5) EC, ‘Rice Market’, Committee for the Common Organisation of Agricultural Markets, 22th December 2016
| Comment and Analysis
While EU rice farmers call for the invocation of safeguard measures against rice imported from Myanmar and Cambodia, current import levels from LDCs would not appear to be a cause of ‘market disturbance’. The case for restricting imports from LDCs would appear to be questionable. However should the need arise the EC retains the right to take such measures, even though EU rice production accounts for only 0.2% of the value of total EU agricultural production. (4) The Copa-Cogeca press release calling for restrictions on imports also made reference to the need for flexibility in the use of plant protection products used against ‘rice blast’. The call for trade protection may simply have been a ploy to secure more flexibility in the application of ‘maximum residue levels for Tricyclazole’, given the questionable basis for introducing safeguard measures in the light of imports trends from LDCs in 2016. |
| Key words: Rice, safeguards, EBA, LDCs, MRLs Area for Posting: Cereals |