AgWatch


U.S. Rice May Find Niche Market In Ukraine, Romania



 Meeting with three representatives (left) of supermarket chain in Ukraine is Greg Yielding,
 of the Missouri Rice Council and US Rice Producers Association and an interpreter. 

 Photo by John LaRose





8th of a 10 Part Series
JOHN M. LAROSE
BETTY VALLE GEGG-NAEGER
MidAmerica Farmer Grower

   Greg Yielding, of the Missouri Rice Council and US Rice Producers Association traveled on the recent USDA Trade Mission led by USDA Acting Deputy Secretary (ADS) Michael Scuse to Ukraine and Romania. It was Yielding’s first visit to the area.
   “The USDA Foreign Agriculture Service (FAS) had set up several meetings for me with rice buyers in both Ukraine and Romania to explore the rice markets there. Ukraine may be a very good market for U.S. grown rice. That country lost most of its rice growing area and rice mills when Crimea was taken over by Russia. There were some rice growing areas around Odessa, but their mills are in Crimea so they’re no longer able to deliver harvested rice to the mills,” stated Yielding.
   “There was a lot of interest in Ukraine and you could tell they wanted to do more trade outside of the country, since the situation with Russia has almost halted domestic production of rice,” he explained.
   “There are people that think there is a market there and that’s an area that could be a niche market for U.S. rice. Certainly more information needs to be gathered on the market.”
   “After the meetings with potential buyers that the FAS set up, I visited some Kyiv supermarkets and looked at the quality and prices on the packaged rice. I talked to the buyers, they were very open and there’s definitely an interest there,” stated Yielding.
   “One buyer was very interested in higher quality rice from the United States, and they want to sell that rice in high-end supermarkets.  They are interested in regular long grain, some medium grain and even some long grain in high-end stores. Prices on American rice would have to be higher, especially with the cost of shipping it,” Yielding noted.
   USDA statistics show there is some U.S. rice that is shipped to Ukraine. “While visiting the supermarket I did find U.S. rice, according to their buyers it was repacked California Calrose. It was shipped in bulk and they packaged it in their bags. It was labeled from the USA and they sold it for sushi rice. The price was high, but they said they had no problem selling it.”
   “That, along with the low price of rice from Vietnam or Thailand, found in Ukraine supermarkets are things that have to be weighted when considering U.S. shipments. However, their rice is not high quality, and high quality is something the United States can supply. With no mills there, anything brought into the country would have to be branded rice, already milled and bagged, stated Yielding.
   “Rice could be sent there in bulk, bulk milled, and one of the supermarkets I talked to was working to set up a bagging facility for beans and rice to package as their own brand,” he stated. “U.S. Mills could ship it in bulk and they could package and market it. They’ll mark the bags product of USA, but price will probably be the big deciding factor.”
   The USDA Trade Mission led by ADS Scuse made a second stop in Bucharest, Romania. Again the FAS had arranged meetings between Yielding and Romania importers interested in USA Rice.
   Yielding stated, “I found the meetings in Bucharest very productive. There were several brokers there that expressed an interested in USA produced organic cross and conventional medium grain, long grain, and brown rice. They were very concern and interested in quality, some I asked, do you work with certain banks when trading?  They said we pay up front when we buy. That’s something everybody wants to hear when doing any kind of business overseas.”
   He doesn’t think financing will be a problem in either Ukraine or Romania, since the Romania representatives said they would pay up front and there is already banking relationship between the U.S. and Romania. “In Ukraine the supermarkets I’ve talked to, financing would not be a problem because they’re European Supermarkets,” he said. “However, there were some private people who were interested in importing and I just wonder about that. I’ll put these people in contact with some of the processors and see what happens.”
   Some U.S. mills only want to sell large amounts, where foreign brokers may not want to buy huge amounts, but everybody wanted to buy it in containers. They want it in 50 and 100 pound tote bags, explained Yielding.
   He added that a shipper can fill a container with 50 or 100 pound prepackaged retail bags or with bulk rice using the large tote bags. Large tote bags would be one ton of rice. Then they can repackage it. 
   “There was a company that wanted brown rice for cereal bars, so they are very interested in quality and food safety,” Yielding said. “They don’t want 18 percent broken rice like they are getting from their Southeast Asia suppliers. They need the whole grain.  They want 4 percent broken or less, depending on if it’s number one or number two.” Yielding said, “Knowing their use I didn’t know why other countries would ship them poor quality broken rice.”
   Yielding called the recent trade mission “one of the most successful ones I have been on. I think there is a future for U.S. rice in both Ukraine and Romania, we need to get more information, but for a first time visit, prospects look good,” Yielding said.
   “We have an Emerging Market Program grant that we turned in for US Rice Producers Association (USRPA) to actually go there and do a better assessment of the market,” stated Yielding. 
   “I also met a gentlemen from Foreign Agriculture Service (FAS), who lives and works in Bulgaria and he said there were people from Bulgaria interested in getting rice prices on some medium grain rice. They were in the United States and the day I returned they were leaving, going to Denver and Montana to buy lentils, chick peas and other produce. So, a day after my return, I flew to Denver and met them and took some samples to give them. I went over there, and that was very good too. There’s a lot of interest there. So the prospects are more than Ukraine and Romania where we visited on the trade mission. I was able to talk to people from Bulgaria and make that connection as well,” Yielding explained.
   Yielding made a full report to the Missouri Rice Council on the Trade Mission. He has also contacted rice mills in Missouri to discuss the possibility of shipping rice to Romania. “I’ve already met with them so they’re working on it now,” he said. ∆
   JOHN M. LAROSE: Publisher MidAmerica Farmer Grower
   BETTY VALLE GEGG-NAEGER: Senior Staff Writer, MidAmerica Farmer Grower

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