Source: Stuttgart Daily Leader
14/04/2014 – Colombia is an important and growing rice market for the United States, but it is threatened by a brisk illegal trade in smuggled rice that is valued at close to $540 million annually according to the Director of Tariffs and Customs (DIAN).

According to the National Chamber of Rice Processors (INDUARROZ), roughly 16-20 percent of rice consumed in Colombia is now smuggled rice.  National Rice Growers Federation (FEDEARROZ) General Manager Rafael Hernandez estimates that last year, 217,000 tons of domestic Colombian rice was not sold due to the influx of cheaper illegal rice.

This past December, FEDEARROZ asked the Colombian government for help in addressing rice smuggling there.  Rice contraband enters Colombia at a significantly lower price than domestically produced rice — an average of $650 per ton for smuggled rice, as opposed to $800 per ton for domestic rice.  

Most smuggling occurs along the border points with Venezuela and Ecuador, where production from these countries and Peru enter the Colombian market.  Current currency exchange problems in Venezuela make smuggling even more rewarding. Venezuela imports large amounts of rice each year, which is heavily subsidized for local sale.  Smugglers then bring the subsidized rice over the border and earn a hefty profit. Dozens of trucks loaded with illegal rice reportedly enter Colombia’s Putumayo crossing point from Ecuador each week. Local rice producers, and the DIAN, attribute up to 70 percent of rice sold in this part of the country to be smuggled rice as opposed to being produced at mills and farms in the area. 

Colombian President Juan Manuel Santos declared smuggling and contraband rings a “high value objective” for the country’s security forces, and promised a “frontal assault” against illegal trade. 

“The United States is a top five rice supplier for Colombia,” explained Carl Brothers, chairman of the USA Rice Federation’s International Trade Policy Committee. “If the Colombian government can really crack down on smuggling, we think it’s reasonable to assume the U.S. could get a shot at supplying some of that tonnage.”

Source: http://www.stuttgartdailyleader.com/article/20140414/News/140419749#ixzz2z3fEbYSl