US rice sales to Haiti dip amid political crisis, historically high prices

The US rice industry is looking on with increasing apprehension as the crisis in Haiti continues to worsen, threatening US market share in this key destination.

Social unrest and gang violence have been an increasing issue in Haiti for some years. However, the assassination of the country's president, Jovenel Moise, in July 2021 and the ongoing blockade of the country's main fuel terminal by armed gangs have made the issue particularly acute.

Milled rice exporters in the US South have spoken with increasing concern about the situation in this core US rice market. It has not been uncommon for ships loaded with US rice being forced to wait outside Port-au-Prince due to the deteriorating situation in recent months. Exporters even say that convincing shipowners to travel to the embattled country is a struggle. Even if they are convinced, freight costs are highly inflated due to the risks.

In this context, US milled rice exports to the Caribbean nation are flagging and millers in the US South are increasingly concerned. "If the port and infrastructure could be stabilized from a security and logistics standpoint within the next month, we could see a number of contracts delivered and the backlog reduced fairly quickly," said one US industry source.

"If the situation is prolonged, we would more likely see some longer-term impacts to the US market, unless another large market for milled rice opens up," the source added.

Haiti is the second-largest market for rice exports coming from the US South behind Mexico, and the largest for long grain milled rice products. In the marketing year 2021-22 (August-July), Haiti represented 62% of the 685,300 mt of long grain milled rice exported from the US, according to US Department of Agriculture data. The latest USDA data shows that Haiti only represents 22% of long grain milled rice export commitments so far in 2022-23.

The 52,799 mt of milled rice committed to Haiti so far in 2022-23 is 48% behind the 101,160 mt committed at this point in 2021-22. While domestic rice prices in the US have remained firm for some time and the US is in a highly unusual second consecutive year of output contraction, millers are concerned about what Haitian demand dropping off could do to prices.

However, insecurity in Haiti is not the only reason for declining sales. Due to the unusually small crop and significant domestic demand, US milled rice prices are at a record high. The Platts assessment of US #2, 4% broken white rice was $685/mt FOB bulk NOLA Nov. 1, up from $560/mt a year prior, making it the most expensive mainstream long grain white rice product available on the global market.

Meanwhile, the Haitian gourde is close to an all-time low against the dollar. It is not surprising that importers in Haiti -- classified by the UN as one of the world's least developed countries -- are looking elsewhere for their rice needs. In September, Uruguay exported 13,471 mt to Haiti, according to customs data. This is the first time that Uruguay has shipped a significant volume to the country since January 2020. While it was rumored that the cargo was redirected to another country due to the crisis, a major Uruguayan exporter confirmed to S&P Global Commodity Insights that "it finally went to Haiti."

One major trader said that pricing from Uruguay is still workable for the Haitian market, when up against US pricing. However, once again, freight remains a stumbling block. Haitian rice importers typically take cargoes of around 15,000 mt and ships transporting that volume rarely operate from Montevideo, according to the source.

As the US does not have any particular tariff advantage over other countries, though, the US' pre-eminent position in supplying rice to Haiti is undeniably under threat. In addition to Uruguay, one US supplier reported Pakistani rice going to Haiti. While historically high US prices alone would make importers think twice about US rice, the worsening socioeconomic situation in Haiti makes seeking out the most competitively priced rice an even higher priority.

"'Concerned' might be too strong of a word," said one major US supplier to the country. "Aware, yes, and if this is ongoing and doesn't resolve in the next 6 months, then yes, I'll be very concerned."