Global Markets: Rice – U.S. Rough Rice Exports to Mexico Rebound in 2019

Rough rice, also known as paddy rice or rice in husk (HS Code 100610), is very thinly traded. With 2.7 million tons of exports in 2018, it comprises about 6 percent of all global rice trade and is dominated by just a few suppliers.

The United States is the top exporter of rough rice, followed by Brazil, India, and Paraguay. Rough rice is typically traded across borders or between nearby countries since rice in husk form presents increased phytosanitary risks. As it requires additional processing, paddy rice is favored by some importers because it is lower-priced and supports domestic milling industries.

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Mexico is the top export market for U.S. rice and almost 90 percent of those imports are rough rice. While the United States also ships rough rice elsewhere in Latin America and to Libya, Mexico had historically been the largest and most reliable customer.

Even as total U.S. market share had declined in recent years from virtually 100 percent in 2010 to about 70 percent in 2018, rough rice exports had remained fairly constant until last year when rough rice from Guyana and Paraguay displaced the United States, and Mexico imported less rice overall. However, U.S. rough rice exports to Mexico are up 34 percent from a year ago, reaching 531,000 tons.

At the same time, Guyana and Paraguay rough rice exports to Mexico have virtually disappeared, at least for now. Brazil has also abruptly dropped out of the rough rice trade. Its exports have plummeted 75 percent to only 145,000 tons, mostly on significantly reduced shipments to Venezuela.

However, as trade talks have begun between Mexico and Brazil, U.S. dominance in the Mexican rough rice market could once again face competition.

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