USA Rice Creates Stable Market in Iraq via MOU

Iraq has alternated between being a top ten market for U.S. rice, importing high quality, milled, U.S. long grain rice, to importing no rice from the U.S. The Iraqi government has historically purchased about 85 percent of all Iraqi rice imports to cover the amount of rice needed for distribution in the Public Distribution System (PDS), which provides Iraqi citizens with an allotment of basic food items several times a year, including three kilograms of rice. The Iraqi Grain Board (IGB), a part of the Ministry of Trade, used to manage these purchases but in 2021 the Iraqi government decided to appoint a private entity, Al Awees, in charge of the rice purchases.

USA Rice, in concert with the U.S. State Department and Iraq’s Ministry of Trade, developed a memorandum of understanding (MOU) with Al Awees which calls for annual purchases of 200,000 tons of U.S. rice. Additionally, the MOU allows the purchase of bulk rice, which Iraq does not permit from any other country. The Iraqi government accepted bulk rice from the U.S. after numerous meetings and an in-person, ATP-funded seminar in February 2020 organized by USA Rice and US Wheat Associates, where USDA Federal Grain Inspection Service’s (FGIS) Byron Reilley reviewed inspections for both bagged and bulk rice, and the group discussed the merits and challenges of reintroducing bulk rice shipments to Iraq which had been halted since 2015.

The MOU was signed by USA Rice and Al Awees in July 2021 and immediately discussions ensued with U.S. rice exporters. Two sales were made over the next several months, totaling 120,000 tons of rice, with an estimated value of $60 million. Discussions continued with Al Awees and exporters and the remaining 40,000 tons was purchased in July and August 2022. The MOU is indefinite and has helped lead to a steady market for U.S. milled rice.