The start of 2020 brought with it a new era for U.S. rice relations with Korea with the implementation of the U.S. country-specific quota (CSQ) agreement, negotiated and signed late last year by the U.S. Trade Representative, U.S. Department of Agriculture, and government of Korea.
The agreement pledges 132,304 MT on a milled basis, of annual U.S. rice purchases, as part of Korea’s WTO commitments, along with purchases from Australia, China, Thailand, and Viet Nam.
Since the CSQ was signed, 110,704 MT of the 132,304 MT commitment has been contracted for, after a large tender was held last week. Following last week’s sales, just 21,600 MT is still outstanding before the 2020 CSQ commitment is fulfilled. Prior to the CSQ, the majority of the sales were contracted at the end of the calendar year.
While the U.S. government initially estimated the CSQ would provide $110 million in annual sales of U.S. rice, the 2020 CSQ contracts to date total more than $100 million.
“While we spent some time earlier this year acclimating to the logistical challenges associated with implementing a new quota system and then handling the global impact of the COVID-19 pandemic, we are still on target to meet the terms of the new country-specific quota,” said Michael Rue, California rice farmer and chair of the USA Rice Asia Trade Policy Subcommittee.
P”After the last tonnage is contracted this year and USA Rice members hold our annual consultations with our Korean counterparts, we hope to be on a smooth trajectory going into the second year of the CSQ. Once travel starts back up, our exporters are certainly looking forward to building on our long-time relationship with buyers in Korea.”
Over the last 10 years, U.S. rice exports on a milled basis to Korea have averaged 116,072 MT per year, all prior to the establishment of the new quota system for U.S. rice.