As per National Chamber of Rice processors (INDUARROZ), Colombia being an important rice growing market for United States is threatened by the stimulation of illegal trade in smuggled rice that has a value of about $540 million annually. Currently about 16-20% of rice consumed in Colombia us smuggled.
National Rice Growers Federation (FEDEARROZ) has estimated that around 217,000 tons of domestic Colombian rice was not sold due to incursion of cheaper illegal rice last year.
The government has been requested to address the smuggling issue immediately as Rice Smuggling a Hazard for Colombia. Currently smuggling occurs along the border points with Venezuela and Ecuador. Also the currency exchange issue in Venezuela is giving a boost to smuggling as large amounts of imports of rice which are subsidized for local sale are bought by smugglers and sold at prices with heavy profits.
Rice Contraband enters Colombia at a very low price than domestically produced rice at an average of $650 per ton of smuggled rice to $800 per ton for local price. Currently rice producers and the DIAN, Contribute up to 70 percent of rice as opposed to being produced at mills and farms in the area.
USA Rice Federation International Trade Policy Committee has declared that if Colombian government breaks down on smuggling then it can be assumed that U.S could take a shot at supporting some of that tonnage. Keeping this in view Colombian President Juan Manuel Santos has declared smuggling and Contraband rings a “High Value Objective” for the security forces and has committed “frontal assault” against illegal trade.