JAMAICA FOOD SECURITY: GOJ ACTS QUICKY TO SECURE

UNCLAS KINGSTON 000453

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E.O. 12958: N/A
TAGS: EAGR SENV ECON ETRD SOCI PREL EAID ENRGJM XL
SUBJECT: JAMAICA FOOD SECURITY: GOJ ACTS QUICKY TO SECURE
RICE IMPORTS

REF: A. KINGSTON 366


B. KINGSTON 354

C. KINGSTON 111

SUMMARY
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1. (SBU) Fear of potential rice shortages has led the Government of
Jamaica (GOJ) to act quickly to secure additional rice imports from
beyond its CARICOM partners. Prime Minister (PM) Bruce Golding met
with President Bharrat Jagdeo of Guyana to obtain a waiver from
CARICOM external tariff in order to purchase rice from the United
States. Minister of Industry and Commerce Karl Samuda says the
island does not face a current shortage, but he wanted to allay
fears by securing more supply. Samuda also has warned retailers
against raising prices on consumers. End Summary.

GOJ Imports Rice from U.S.
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2. (U) In his Parliamentary speech on Tuesday May 13, Minister of
Industry and Commerce Karl Samuda announced that Guyana agreed to
waive the 25 percent Common External Tariff (CET) on grain imports
to allow Jamaica to buy rice from the U.S. amid concerns of
dwindling local supplies. Samuda said he has immediate plans to
purchase 9,000 tons of rice from the U.S. which would prevent any
potential rice shortage. In order to secure approval from CARICOM,
Samuda said the GOJ agreed to buy 60 percent of the 100,000 tons of
rice it consumes annually from Guyana. Jamaica does not currently
face a chronic shortage in aggregate food supplies, but soaring
prices over the last two years have led to growing concerns
(reftels).

Guyana Opposition Resolved
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3. (U) Guyana had initially opposed Jamaica's request because
officials said they had enough grain to supply its market. PM
Golding had met with President Jagdeo over the weekend to discuss
the rice issue. Guyana is the Caribbean's largest rice producer and
could have vetoed the request. Samuda said he wants to build up the
country's inventory of rice. Samuda stated that rice has become
increasingly expensive on the world market as countries hold on to
their domestic supplies, fearing shortages. The recent devastating
cyclone in Myanmar (Burma)-one of the worlds leading rice
producers--has furthered those fears. The JLP-led government has
charged that Guyana was not supplying enough rice to meet local
demand--a charge Guyana denies. In 2007, a rice shortfall from
Guyana forced Jamaica to buy 17,000 tons from the United States.

Samuda Warns Against Price Gouging
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4. (U) Samuda also has warned retailers not to try to gouge
consumers by raising prices. In an interview after his
Parliamentary speech, Samuda said "Let me make it clear to all
concerned that, whilst I am a disciple of the market, irresponsible
behavior by any distributor, wholesaler or retailer that jeopardizes
the welfare of the consumers will not be tolerated." "I will not
hesitate to exercise any provision in order to protect the consumer,
if necessary. Make no mistake about that," he told Parliament.
Samuda claimed the GOJ has achieved its objective of overall price
stabilization. The main staples of wheat flour and rice have jumped
by 30 percent in April (reftel A).
JOHNSON