Production:

FAS Quito forecasts Ecuador's milled rice production in MY 2015/16 at 870,000 MT, up 98,000 MT or 13 percent compared to the MY 2014/15 estimate of 772,000 metric tons. We attribute increased production to the availability of new, improved rice varieties. This year's first harvest is expected in May. The utilization of new, improved rice varieties allows for two harvests per year in fields under irrigation. We foresee producers benefitting from the combination of high international prices, government subsidized inputs, and strong demand.

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Apr 2013

Apr 2014

Apr 2015

Ecuador

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

360

360

364

364

0

380

Beginning Stocks

68

0

73

73

0

70

Milled Production

790

790

800

772

0

870

Rough Production

1,254

1,254

1,270

1,225

0

1,381

Milling Rate (.9999)

6,300

6,300

6,300

6,300

0

6,300

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

858

790

873

845

0

940

MY Exports

75

75

50

0

0

75

TY Exports

50

50

50

0

0

75

Consumption and Residual

710

710

730

775

0

800

Ending Stocks

73

73

93

70

0

65

Total Distribution

858

858

873

845

0

940

1000 HA, 1000 MT, MT/HA

Rice production is concentrated in the coastal lowlands. This area floods during the November-April rainy season, but remains humid throughout the rest of the year. Production varies with rainfall, with the second (larger) harvest occurring towards the end of the rainy season (i.e., May-June). Only a third of the acreage is planted during the summer months, and limited only by access to irrigation. While large-scale farmers can afford expensive irrigation and equipment, 75 percent of Ecuador's poorer rice farmers (five hectares or less) cannot afford these costs.

Consumption:

Rice is a staple in Ecuador; the bulk of local production is consumed domestically. FAS Quito forecasts total consumption at 800,000 MT in MY 2015/16, up 25,000 MT or three percent from the MY 2014/15 estimate of 775,000 metric tons. We attribute the increase to natural population growth; per capita consumption is estimated at 54 kilograms/annum.

Domestic rice is marketed through wholesalers in 45-kilogram sacks, with small vendors selling to consumers by the kilogram. Ecuador's SINAGAP (the agricultural price monitoring agency) reports farm gate rice prices of $34.51 per 90-kilogram sack. The 45-kilogram wholesale rice sack in 2014 went from $43.18 in January to $44.75 by December. At the retail level consumers paid on average $1.06/kilogram, up about one percent from 2013's average price of $1.05/kilogram. With the expansion of the modern supermarket sector, sales of 2-5 kilogram branded rice sacks are increasingly popular, and account now for 15-20 percent of rice sales.

Trade:

Ecuador is self-sufficient in rice production. Imports are minimal unless weather induced bad harvests require larger imports. FAS Quito forecasts minimal to no rice imports in MY 2015/16. A niche opportunity however does exist for U.S. exports of specialty rice varieties such as basmati, sushi-style rice (i.e., white, short-grain rice), risotto, wild rice, and parboiled rice.

Ecuador exports rice to Colombia, and at times to Peru depending on the exchange rate. Ecuador refrained from exporting rice in MY 2014/15 due to low strategic reserves. FAS Quito forecasts that Ecuador will export between 50,000 and 75,000 MT of rice in MY 2015/16 to Colombia.

Policy:

Rice imports are politically sensitive. The government is reportedly promoting rice self-sufficiency by maintaining the APBS, as well as controlling exports and imports. The APBS sets a floor price of $574/MT and a ceiling of $627/metric ton. Rice imports are levied an ad valorem tariff of 20 percent plus an additional variably levy of 48 percent. The Ministry of Agriculture issues export and import permits; it acts as the authorized exporter of reserves. The government has established an emergency stock of 80,000 MT of rice to ensure national food security.

Andean Community members are assessed a zero-tariff, as well as are not subject to the Andean Price Band System. A ministerial decree is nonetheless necessary before an import permit is authorized. Other Latin American countries have been granted ad valorem tariff preferences under the ALADI, but they are still assessed the APBS variable levy.

HTS

Description

US and World

CAN

Peru

Chile

ALADI

Paraguay

Uruguay

Argentina

Brasil

Mexico

1006.1090

Rice, Paddy

20%

Zero

Zero

15%

15%

7.5%

15%

15%

15%

1006.2000

Rice, Brown

68%

Zero

Zero

20%

20%

10%

20%

20%

20%

1006.3000

Rice, Milled

68%

Zero

Zero

20%

12%

10%

20%

20%

20%

1006.4000

Rice, Broken

25%

Zero

Zero

20%

20%

10%

20%

20%

20%

Note: Although Peru is part of the Andean Community, it has signed a bilateral agreement with Ecuador that includes preferences on rice. Similarly, Chile has also negotiated a bilateral trade agreement with Ecuador.

Source: FAS OAA Quito office research.