Rice and Food Aid USDA/USAID Food Aid Conference April 8, 2009 Jim Guinn Vice President

1. Rice and Food Aid USDA/USAID Food Aid Conference April 8, 2009 Jim Guinn Vice President International Promotion

2. Summary of remarks • Issues leading up to and exacerbating the “food security crisis” of spring 2008 • US Rice in food aid • Why rice?

3. U.S. Rice Supply, Use and Ending Stocks Million MT All numbers are basis milled rice Source: USDA World Supply and Demand Estimates and Rice Yearbook

4. World RiceEnding Stocks & Stocks/Use Ratio Million MT All numbers are basis milled rice Source: USDA World Supply and Demand Estimates and Rice Yearbook

5. U.S. Long Grain Rough Rice & Crude Oil 2007 Daily Price Chart $90 $80 $70 $60 Crude Oil ($ per Barrel) $13.50 $12.50 $11.50 $10.50 Long Grain Rice ($ per hundredweight)

6. U.S. Long Grain Rough Rice & Crude Oil 2008 Daily Price Chart $130 $110 $90 $70 $50 Crude Oil ($ per Barrel) $23 $21 $18 $15 Long Grain Rice ($ per hundredweight)

7. 2008 Top Exporters/Importers of Rice

8. Export Restrictions • India – October 10, 2007 – short lived export ban • China – January 1, 2008 – • abolished 13% VAT tax rebate on exports • added 5% export tax • Egypt – March 2008 – export ban • Vietnam – March 2008 – export ban • India – April 1, 2008 – • export ban on non-basmati rice • minimum export price on basmati $1,200 MT • Brazil – April 22, 2008 – export ban • Burma – May 2, 2008 export ban • due to cyclone • received rice as part of food aid

9. Contributing Factors • Philippines tendered for 500,000 MT on April 17 • Venezuela increased imports from nil in 2007 to reach 314,000 MT in 2008 • Many importers – few exporters • Growth in demand • Increased demand by 25 million MT from 2004/05 • Declining stocks • Growing cost of production • Rise in oil prices • Rise in use of land for production of biofuels • Export restrictions • Hoarding • Panic buying No one factor was the cause in itself, but was a complex web of factors

10. Predictable Results Shortages and Sustained High Prices

11. USA Rice’s public message • U.S. farmers grow and supply 90% of the rice Americans consume each year. • U.S. rice farmers export 50% of their annual production to traditional customers abroad. • The U.S. produces only 2% of the world’s annual rice supply, but is the world’s fourth largest exporter of rice.  • The U.S. has enough rice to supply American consumers and their traditional customers in export markets.

12. U.S. Rice in Food Aid • FY09 • USDA/FAS 14,380 MT • USAID (Title II) 30,270 MT • FY08 – 118,900 MT ($55.1 million) • Asia 50,970 MT • Africa 41,810 MT • Latin America 26,300 MT • FY07 – 97,100 MT ($36.3 million)

13. Why Rice in Food Aid? • A staple in many targeted countries/regions • Excellent source of complex carbohydrates and essential amino acids • Easily digestible • Great caloric source for at risk populations • Infants, HIV, TB and malaria sufferers, and those suffering from compromised digestive systems • Hypoallergenic • Gluten-free • Large and growing populations are gluten intolerant (celiac) • Long shelf life • Easily prepared

14. Thank You For more information: (703) 236-2300 www.usarice.com