February 26, 2012

US lawmakers upset over Iraq buying basmati from India


Houston, Feb 25 (PTI): US Congress members from the largest rice-growing states are on the warpath, asking Iraq to resume buying long-grain rice from their country, instead of from India. ”We liberated their country for one thing,” said Texas Congressman Ted Poe. “We would think they would consider the US in trade since we spent billions of dollars not only to liberate their country, but to rebuild their infrastructure.”

Twelve Congressmen have wrote to Iraq's Trade Minister Khair Alla Babaker earlier this week pressing him to get Iraqis back on the American long-grain variety. The letter said that there was a 77 per cent drop in rice sales to Iraq between 2010 and 2011, even though “not long ago, Iraq represented the largest market for US rice.”

The Iraqi Grain Board has said it decided to buy cheaper basmati rice from India. Baghdad has not bought US rice since late 2010.

Iraq's Trade Ministry has said that much of the shift is a function of the Iraqi public preferring India's basmati rice, which the US doesn't produce.
There is no law keeping the US out of Iraq's rice market, but American farmers simply aren't growing the right kind of rice for the Iraqi dinner plate.

The Iraqi move comes as US farmers struggle with drought, unusual heat, rising production costs, dropping prices and a shrinking export market.

The 12 legislators from Arkansas, California, Louisiana, Mississippi, Missouri, Texas and Virginia say the rice industry has worked closely with Iraq to develop a relationship, including conducting meetings and workshops with Iraqi Grain Board officials, and touring with them at US rice fields and mills.

The letter said Iraq has stringent requirements on the grain. It also requires the rice to be pre-bagged, even though nearly all foreign markets allow this to be done at the destination.

”These unreasonable quality terms increase risk to shippers, causing them to hedge uncertainty with price premiums, which creates a competitive disadvantage,” it said.

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