Update on Costa Rican rice market

Published 2024년 4월 25일

Tridge summary

In 2022, Costa Rica's government attempted to combat food price inflation by reducing tariffs on rice, only to inadvertently harm local and U.S. rice farmers by allowing cheap South American rice to flood the market. The initial reduction of tariffs from 35% to 3.5% and 4% for rough and milled rice, respectively, along with a 1% import tax, resulted in a significant drop in U.S. rice exports and a sharp decline in domestic production in Costa Rica. Following complaints from local farmers, the Executive Decree was suspended, and import tariffs were restored at 35% for third-country origin rice. As Costa Rica enters the nineteenth year of the CAFTA-DR free trade agreement, which will eliminate the quota and import tax on U.S. rice in 2025, the country faces challenges in trade facilitation due to a cyber-attack on the Ministry of Foreign Trade's computer systems, leading to a gap in official data and potential delays in U.S. rice exports. Despite these challenges, there is optimism for the future of U.S. rice exports in Costa Rica.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

ARLINGTON, VA – In 2022, like many countries around in the world, Costa Rica’s government looked for ways to curb food price inflation. That summer, President Rodrigo Chaves Robles announced the reduction of tariffs on rough and milled rice, the staple carbohydrate in the Costa Rican diet. The Presidential Decree reduced tariffs on rough and milled rice from 35 percent to 3.5 and 4 percent, respectively, and with an additional 1 percent import tax, the duty rate for each rice type totaled 4.5 and 5. Despite U.S. rice having preferential market access under the Central America-Dominican Republic-USA free trade agreement (CAFTA-DR), this Decree opened the floodgates to cheap South American rice. Unfortunately for U.S. rice and Costa Rican rice farmers, this decision was only beneficial for third-country origin rice exporters. By August 2023, U.S. rice exports plummeted and rice production in Costa Rica declined sharply. From January-August 2023, U.S. rice exports fell 89 ...

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