Analysis and News

High export price results in increased returns from rice

BY GEOCAP's Contributor: Navendra Seoraj

Returns from one of Guyana's most prolific industries, the rice industry, increased at the end of the first half of this year despite there being a lower export volume. 


Earnings from the exportation of paddy, rice, and rice by-products amounted to 123.6 million USD, which was 1.2 percent or 1.5 million USD more than what was exported during the corresponding period last year.


This out-turn, according to the Bank of Guyana's mid-year report, is due to a higher average export price. The average export price of rice increased by 5.5 percent or 22.89 USD to 438.26 USD per tonne compared with 415.37 USD per tonne at the end-June 2020.


According to the central bank, the volume of rice exported within the first half of 2021 was 282,053 tonnes, which was four percent or 11,886 tonnes less than the 293,939 tonnes exported at the end of the first half of 2020.


Although the aggregate volume of exports was lower, the central bank reported that the European Union (EU)’s share of rice exports increased by 47.9 percent from 36.6 in 2020.


The Caribbean Community (CARICOM)’s share also grew to 16.6 percent from 15 percent one year ago, while the United States market accounted for 0.7 percent of total rice exports.


Conversely, Latin America’s share of rice exports fell to 34.7 percent from 47.5 percent in 2020. 


Despite a decrease in the volume of rice exported, the industry's overall output grew by 7.8 percent during the first half of this year. Production reached 353,289 tonnes; this is 95.1 percent of the production target for the first crop and 1.5 percent higher than the corresponding period in 2020. 


“This performance is noteworthy given the many challenges faced by the industry from excessive rainfall during the harvesting period which caused flooding and limited combines’ access to lands which affected harvesting,” the central bank reported.


A total of 92,139 hectares were harvested, representing an increase of 0.6 percent from the first crop's performance in 2020.


Locally, rice is a staple in the diet of many Guyanese and a key source of income for stakeholders who invest significant resources into the production of this valuable commodity.


It was reported that approximately 6,020 farmers produce the grain in several regions throughout Guyana. There are 43 licenced rice millers, and 22 registered exporters of rice. 


Rice accounts for 3.3 percent of Guyana’s total Gross Domestic Product (GDP), and 20.5 percent of its GDP agriculture-wise.


Based on previous reports, Guyana’s newest rice variety, GRDB16, has the potential to increase Guyana’s rice output significantly, as the government looks to use this crop to help ensure the country’s development.

 

This variety of rice has the potential of producing up to 60 bags per acre, which is equivalent to an average nine tonnes per hectare. 

 

The GRDB16 has already demonstrated several qualities that have been desired by rice farmers for a number of years.

 

For the past 15 years, the Guyana Rice Development Board (GRDB) has been releasing new varieties of rice to farmers, with each successive one demonstrating improved characteristics over its predecessor.

 

With farmers being equipped with better varieties of rice, it is expected that there will be greater yield with this industry and a better outlook for the entire economy.

 

The Guyanese economy recorded positive growth during the first half of 2021 from heightened activities in almost all of the major sectors. Real oil GDP, according to the central bank, grew by 14.5 percent while non-oil GDP grew by 4.8 percent.

 

Improved performances were recorded in the construction, petroleum and gas and support services, manufacturing and the service sectors, while the agriculture sector recorded reduced output due to unprecedented flooding in May and June. 

 

The growth in the non-oil economy was supported by government-budgeted fiscal policies, removal of restrictions as well as accommodative monetary policies.


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