Agro-industry

European rice at risk of decline: 60% of consumption from imports. Airi: more protection needed

These days in Brussels a decision on the system of preferential tariffs on arrivals from South East Asia. Rice industries: the already processed product costs the same as the raw product in the EU

by Alessio Romeo

4' min read

Translated by AI
Versione italiana

4' min read

Translated by AI
Versione italiana

Facilitated (and cheap) imports, global surpluses, together with the devaluation of the dollar, reduced freight rates and the impact of the climate crisis on producers are putting a strain on the resilience of the Italian rice supply chain.

The latest alarm for a concomitance of factors "that are not manageable by the supply chain" comes from Airi, the Association of Rice Industries, which for some years now, after the expiry of the European safeguard clause that Italy had painstakingly managed to activate in Brussels, has been facing the resumption of zero tariffs imports from large producers, which has come to cover over 60% of total European purchases.

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EU decision in sight

Rice largely ready-packed and packaged, sold at unaffordable prices for continental producers: today, via Rotterdam, white milled rice arrives at 400 euros per tonne; competing European varieties cost at least twice as much, 800-1,000 euros. In Italy, 400 euros buys a tonne of paddy rice, an agricultural raw material that then has to be transported, stored, processed and packaged.

"There is no need to complain but to identify those responsible, the decline will be slow but must be stopped now," says Mario Francese, president of Airi and a leading figure in the sector (he is also ceo of Euricom and president of Curti). He has just signed a letter to the Italian MEPs of the Inta (International Trade) Commission, which meets on Monday 26 January and will have to vote on the reform of the called Generalised System of Preferences, the European tariffs concessions that guarantee duty-free imports to less advanced countries, including Cambodia and Myanmar. A crucial dossier for a sector that, despite the difficulties mentioned, has great potential.

Rise in consumption

"In Europe consumption has grown by 20% in the last ten years from 2.1 to 2.6 million tonnes, in Italy even more, from just over 300 to the current 450 thousand tonnes. Rice is attracting more and more consumers because it is a light and highly digestible product, plus derivative products such asrice-based cakes for their health-promoting properties are gaining ground. We therefore combine geopolitical factors such as the growth of North African and Asian migrants who are big rice consumers with marketing factors. This mix,' continues Francese, 'is the basis for significant growth. The weak point is that over 60% of European consumption is covered by imports, with 1.6 million tonnes. And of this 60% (one million tonnes) is at zero tariffs'.

'But what hurts us,' continues Francese, 'are the 500,000 tonnes of rice that arrive already packaged (not only from Cambodia and Myanmar but also from India, Pakistan and Vietnam), not even detected by the European customs code. While we are politically highlighting the importance of reciprocity (we are rightly subject to health, ecological and social constraints) we are fighting a battle against windmills. Alas, there are only eight producer countries out of 27'.

55% of European rice is grown in Italy, 20% in Spain, 8% in Greece, 7% in Portugal and the remaining 10% divided between France, Bulgaria Romania and Hungary. Italy - where the turnover generated by the sector is around 1.3 billion - is a net exporter of milled rice with a production of around one million tonnes and a domestic consumption of around 450 thousand; but it is also the fifth largest country in terms of imported volumes (after Holland, France, Belgium and Spain) with around 160 thousand tonnes. Most of the imports are Basmati and Fragrant to meet the growing consumption of these types of rice, which are only grown abroad, while the prized risotto varieties cover about 30% of the national production.

Airi: 'More barriers to entry'

In this scenario, claims the Airi president, 'it becomes necessary for politics to take corrective action. As a supply chain we have shared a strategy whose cornerstones are the request for an automatic safeguard and the revision of tariffs stopped in 2004. With regard to the former, the request was to trigger taxes on imports over 200,000 tonnes of rice and the proposal to be voted on by the European Parliament raised the bar to 565,000. That is why we have written to our MEPs, together with Copa (the Committee of European Agricultural Professional Organisations, ed.), inviting them to oppose it, and the same will be done by the industrial associations of the other producer countries with their representatives'.

Also among the demands was an adequate tariff for already packaged rice, which still arrives without tariffs. 'It is an inadequate legal structure, we are not interested in complaining but in clearly exposing the risks the sector is running. If we want to increase self-sufficiency and give the rice supply chain a future,' says Francese, 'we need these corrections, otherwise the future will be downsizing'.

Mercosur promoted

In this case the blame will not lie with Mercosur, the free trade agreement with South America (Argentina, Brazil, Paraguay and Uruguay) now under the lens of the EU Court, where the industry is instead aiming to increase sales and the EU import quota without tariffs is 60,000 tonnes.

'The Italian government has acted very well,' concludes Francese, 'protecting the interests of the country and the agri-food sector, implementing the necessary guarantees so as not to run risks. The consumption of Italian rice in Brazil and Argentina is modest but we hope to increase it'.

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