Production:

Rice is one of the most important agricultural products in the Dominican Republic due to its political, economic and social impact on Dominican society. According to national estimates, the country has approximately 30,500 rice producers, nearly 500,000 people are involved in the production, processing and marketing of rice, and the sector contributes approximately 5% to Agricultural Gross Domestic Product.

Post forecasts a slight decrease in MY 2015/16 harvested area for rice, falling to 160,000 HA from 162,000 HA during MY 2014/15. According to MoA, the harvested area in Dominican Republic during CY 2014 was 162,000 HA; essentially unchanged from CY 2013 (161,000 HA). Rice is produced in two cycles during the year and recently, due to the use of short cycle varieties, a growing share of production is harvested in the May secondary crop (now almost 25% of total harvest).

Most Dominican rice is produced under irrigation. According to Post sources, rice under irrigation accounts for 99% of the total area.

For MY 2015/16 Post forecasts rice production of 776,000 MT (paddy basis) down from 793,000 MT during the current marketing year, while milled production is forecast at 520,000 MT; down from current estimated productions of 531,000 MT. While production will remain stable in the short term, the continuous high level of stocks represents an ongoing threat to price stability. During MY 2013/14, rough production totaled an estimated 800,000 MT and milled production 531,746 MT, with a milling rate of 67%.

DOMINICAN REPUBLIC RICE AREA HARVESTED, PRODUCTION AND YIELD, CY 2009-2014

Year

Area Harvested (HA)

Production (MT)

Yield (MT/ HA)

Rough

Milled

2009

182,000

822,925

551,360

4.52

2010

178,419

846,752

567,324

4.75

2011

174,727

822,602

551,143

4.71

2012

160,893

734,079

491,833

4.56

2013

160,360

800,032

536,022

4.99

2014

162,000

800,000

531,746

4.93

Average

169,733

804,398

538,238

4.74

Source: Ministry of Agriculture of the Dominican Republic, ONE, Central Bank.

The average yield has varied between 4-5 MT/HA over the last ten years. Post sources expect yields to remain similar in coming years, due to lack of development of new varieties and/or production technologies.

Consumption:

Rice is one of the most important products in the basic consumer basket. CY 2014 consumption is estimated at 539,000 MT, with an annual average of 535,000 MT during the period CY2010-2014. Consumption is relatively stable, although in CY2014 demand fell by 0.5% versus the prior year due to relatively higher prices.

DOMINICAN REPUBLIC RICE APPARENT CONSUMPTION, CY 2010-2014

Year

Population (millions)

Production (1000 MT)

Initial Stocks (1000 MT)

Imports (1000 MT)

Exports (1000 MT)

Ending Stocks (1000 MT)

Consumption (1000 MT)

Per capita (Pound/ habitant)

2010

9,980.00

567

251

23

44

313

484

107

2011

10,129.70

551

313

17

13

318

550

120

2012

10,190.50

491

318

8

40

218

560

121

2013

10,322.90

536

218

12

10

214

542

116

2014

10,436.40

531

214

19

17

208

539

114

Average

10,212

535

263

16

25

254

535

116

Source: Ministry of Agriculture of the Dominican Republic, ONE, Central Bank.

In per capita terms, Dominicans consumed 114 pounds each in CY 2014, slightly less than the average consumption of 116 pounds per capita during CY 2010-2014. No significant changes in the rice consumption trends are expected in the near future.

Trade:

Both imports and exports by the Dominican Republic are limited. The country has been self-sufficient in rice in the last several years, and most rice imports come from the US (92% of the CY 2014 total) thanks to a TRQ established in the CAFTA-DR agreement. Since rice is included in Basket V of the DR-CAFTA agreement (explained in section 3.5 below), out-of-quota rice imports would not be price-competitive. For CY 2014, imports totaled approximately 13,000 MT, with an annual average of 15,000 MT for CY 2010-2014. Post forecasts similar behavior for CY's 2015 and 2016.

Dominican rice is exported on rare occasions; mainly to Haiti. For CY 2014 the total exports were approximately 8,000 MT. Occasional spikes in exports occur due to saturation of the local market and price decreases.

Stocks:

Post forecasts stock levels to maintain between 200-210,000 MT during CY 2015 and further. The ending stock levels of rice during CY 2014 were 208,000 MT, significantly lower than the 5-year annual average of 263,000, but still equal to 40% of consumption. Storage facilities are owned by both private processors (factories) and the Government.

Stock levels tend to be high as a result of the GoDR Pignoracion Program; according Post sources, 80% of stocks are maintained under that program, which is further explained in section 3.5 (below).

Policy:

Under the CAFTA-DR, the Dominican Republic negotiated that rice be placed in Basket V, which concedes a longer-term tariff reduction period-- 20 years—as well as establishing a 99% out-of-quota tariff rate. This non- quota tariff rate will remain unchanged during the first 10 years of the Agreement, until 2015. From 2016 to 2020 the non- quota tariff rate will be reduced by 8% annually, and from years 2021 to 2025 by 12% annually. Additionally, the DR negotiated a special safeguard with an additional tariff rate. This special safeguard can be applied until the end of the tariff reduction period.

Price controls are established via the Pignoracion Program, which operates during 8 months of the year. The National Rice Commission (CONA) establishes a yearly price band (for paddy rice, FOB mill). The CONA is composed of the MoA, producers, processors, retailers and other public institutions. Price bands are established both annually and for each of the two harvest periods (May and September), based on historic prices, varietals and production estimates. For millers, purchasing according to CONA price bands is not obligatory, but it is a requirement for participation in the Pignoracion Program.

In general terms, the Pignoracion Program is a financial services program benefiting rice producers and processors. Under the program, processors (factories, cooperatives, etc.) or producers buy or produces rice, then mill and either market the rice or hold it in storage. If held in storage, this rice can be pledged as collateral for loans from commercial or public lending institutions. For participants in the Pignoracion Program the cost of storage, interest and insurance costs are covered by the Government (MoA).

As rice constitutes one of the primary feed sources for the population, it is exempt from value-added tax (VAT).

Rice, Milled Dominican Republic

2013/2014

2014/2015

2015/2016

Market Year Begin: Jul 2013

Market Year Begin: Jul 2014

Market Year Begin: Jul 2015

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

160

162

162

162

160

Beginning Stocks

34

213

30

208

203

Milled Production

536

536

552

531

520

Rough Production

800

800

824

793

776

Milling Rate (.9999)

6,700

6,700

6,700

6,700

6,700

MY Imports

15

13

15

19

15

TY Imports

15

13

15

19

15

TY Imp. from U.S.

0

12

0

17

12

Total Supply

585

762

597

758

738

MY Exports

0

8

0

17

10

TY Exports

0

8

0

17

10

Consumption and Residual

555

546

560

538

533

Ending Stocks

30

208

37

203

195

Total Distribution

585

762

597

758

738

Yield (Rough)

5.

4.9383

5.

4.8951

4.85