Iraq rice tender raises questions

IGB paid $1.4 million more to buy rice from Brazil and Uruguay rather than accept the competitive, lower bid by U.S. rice.

A recent decision by the Iraqi Grain Board (IGB) to decline a competitive bid from U.S. rice for an Iraqi rice tender has caused concern and distrust in the U.S. rice industry and it’s legislative representatives.

According to several reports, the IGB issued an international grain tender to purchase 170,000 tons of rice in early November. USA Rice has learned that the IGB awarded 170,000 metric tons of milled rice to Uruguayan, Brazilian, and Thai origin rice, despite the fact that U.S. bids for the tender were lower than all bids except from Thailand and Vietnam.

It is report IGB paid $1.4 million more to buy rice from Brazil and Uruguay rather than accept the competitive, lower bid by U.S. rice.

Following what appeared to be productive technical meetings and a fruitful tour of the delta by Iraqi Grain Board (IGB) officials earlier this year, the USA Rice Federation says the results of the latest IGB tender are “inexplicable, and that farmers sitting on an abundant crop are left scratching their heads.” 

"The results make no sense," said Betsy Ward, President and CEO of USA Rice.  "The U.S. is price competitive, the quality is excellent, the logistics are perfect, so why would the IGB want to pay significantly more than they have to?"

When the IGB visited the U.S. in May, progress was reported on three technical issues including broken content, chalk analysis, and shipping in bulk as opposed to 50kg bags, and IGB officials were confident they would begin purchasing U.S. rice again.

"If our prices are lower and the technical issues have been resolved, it doesn't look very good for why IGB snubbed the U.S. again," said Bob Cummings, USA Rice's Chief Operating Officer.  "This is the fourth tender where the IGB has either refused to purchase rice or ignored competitive U.S. offers."

Iraq is a huge rice importer, typically purchasing well over one million metric tons annually.  Cummings said USA Rice would be discussing the issue with U.S. officials in Baghdad and Washington to learn more, and to urge the officials to engage with the IGB.

"It's unacceptable," said Ward. "If these are legitimate tenders we want to know why we aren't being considered.  And if they're not legitimate, well, that's another story."

In a letter Nov. 18 to Secretary of State John Kerry, Rep. Rick Crawford (R., Ark.) and Sen. John Boozman (R., Ark.) urged protecting American rice producers against unfair business practices in Iraq.

“Given the considerable investment of resources by the American taxpayer in Iraq, it is critical that the United States be on ‘equal footing’ with its foreign competitors when it comes to the ability to win bids issued by the IGB. Simply deciding to pick winners and losers in bids for Iraqi rice tenders based on arbitrary reasons is not only unfair, it deprives rice farmers in Arkansas — a leader in rice production — and across America of a vital trading partnership with Iraq,” the members wrote.

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