American rice farmers are counting on a recent $450 million loan from the U.S. Export-Import bank to Iraq to restart the country’s rice imports.
Iraq has not purchased any rice yet this year, a stark contrast to 2019. Last year Iraq imported about $15.5 million worth from the U.S. from January through June, according to USDA data. And the U.S. could really use that business now because exports are down from last year.
Iraq has long been a big importer of U.S. rice, but the COVID-19 pandemic has thrown a wrench into the finances of a country that buys grain through government-run tenders.
The steep decline in oil prices has hit Iraq particularly hard, says Peter Bachmann, vice president of international affairs for the USA Rice Federation, and it’s the oil revenues that enable the Iraqi Grain Board to import rice and wheat.
"Over the past several years, Iraq has been an important destination for U.S. rice, averaging over 100,000 MT per year," said Bobby Hanks, chairman of the USA Rice Federation and head of the group’s international trade committee. "With exports down significantly in 2020, the rice industry welcomes the news of the EXIM loan and looks forward to reestablishing trade with Iraq."
EXIM President and Chairman Kimberly Reed says the loan is expected to directly benefit U.S. farmers who will sell more to Iraq now that it has the funds. The loan is part of an overall $5 billion memorandum of understanding signed last year to facilitate long-term efforts “to identify potential projects in Iraq for procurement of U.S.-produced goods and services.”
“Building on the $5 billion Memorandum of Understanding that I signed with the Republic of Iraq Deputy Prime Minister and Minister of Finance … today’s unanimous board action underscores EXIM’s commitment to strengthening and expanding our relationship with Iraq while supporting U.S. jobs — including in American agriculture — here at home,” said Reed in a statement released last week.
And this week an Iraqi delegation that includes the country's prime minister and deputy trade minister is in Washington to forge closer ties with the Trump administration. Sources tell Agri-Pulse that the Iraqi officials will be meeting with high-level officials, including leaders at the USDA.
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A bright spot for U.S. rice farmers this year has been food aid. The U.S., through its three main food aid programs, has bought and shipped a record amount of U.S. rice to needy people around the world.
Through July the U.S. government donated more than 100,000 metric tons of rice through its Food for Progress, Food for Peace and Food for Education programs. On top of that, USDA tendered last month for 31,500 tons of rice to benefit West Africa and another, similar tender is expected soon.
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