Mexico a drastically changing rice market

For the past three years, the U.S. has faced competition for milled rice in our number one export market -- Mexico. In 2010, we held 97 percent of the milled rice market share in Mexico. With an influx of high quality Uruguayan rice, the U.S. market share fell to 76 percent by the end of 2011.

In 2012, Uruguayan imports continued to increase and lower-priced rice from Pakistan began to enter the market; the U.S. market share fell to 65 percent by the end of the year. In 2013, we saw a surge in Pakistan milled rice imports (until June, when phytosanitary concerns caused Mexico to ban rice imports from Pakistan), and new milled rice imports from Vietnam.

By the end of 2013, the U.S. market share for milled rice had fallen to 51 percent. The higher quality U.S. rice crop this year should compete well with Uruguayan imports, but Asian rice is substantially cheaper and will continue to threaten U.S. rice.

Facing increased price pressure from imported Asian milled rice, Mexican millers have begun to look to other origins (Brazil, Vietnam, etc.) for paddy rice and even milled rice to be able to successfully compete in this new marketplace.

"When a miller is interested in importing milled rice to stay afloat, you know the market situation has drastically changed," said Jim Guinn, USA Rice's vice president of international promotion.

The U.S. has retained 100 percent of the paddy rice market share in Mexico, but that may not be a given for much longer. Guinn says the USA Rice Federation will continue aggressive trade servicing and promotional activities to ensure the U.S. retains a dominant market share in Mexico's rice imports.

Marvin Lehrer, USA Rice's senior advisor in Mexico, will travel to Louisiana at the end of January to attend the annual Louisiana Rice Council and Louisiana Rice Growers' Association meetings. Lehrer will speak about the challenges and opportunities facing U.S. rice in the Mexican market and showcase the new logo developed for the Mexican market which differentiates U.S. rice from other origins.

USA Rice's Sarah Moran will be in Mexico in the next few weeks to meet with the U.S. Department of Agriculture's Foreign Agricultural Service and USA Rice's in-country contractor, as part of a continuous evaluation of activities and strategies to ensure they remain relevant and effective in a changing market environment.