Uruguay captures 63% of Mercosur’s annual rice quota to the European Union
Uruguay this week filled 63% of the annual zero-tariff rice quota granted by the European Union to Mercosur, in the first significant trade milestone since the provisional entry into force, on 1 May, of the association agreement between the two blocs. The total quota of 6,667 tons for the current year was covered within a few weeks of activity, according to Acting Foreign Minister Valeria Csukasi, in what amounts to one of the first operational tests of the treaty signed on 17 January in Asunción.
Uruguayan President Yamandú Orsi celebrated the performance of the rice sector through the X social media platform. Because there are officials who work quietly and wear the jersey, today we can shout a goal, the president said, emphasizing that the agreement with Europe is bearing fruit: today it is rice. The acting foreign minister emphasized for her part that Uruguay doesn’t sleep on it; and its productive sector even less so. The quota will expand progressively to reach 60,000 tons annually within five years, with increments of 10,000 tons per year.
The Uruguayan rice sector historically accounts for more than 50% of Mercosur rice exports, with an annual flow of close to 200,000 tons. Uruguay is also the only one of the four partners whose production fully meets EU sanitary requirements, a competitive advantage that the former president of the Rice Growers Association, Alfredo Lago, has identified as decisive for the preferential capture of the quota. Uruguayan rice exports paid around USD 10 million in tariffs in 2023, a burden that the new agreement is set to reduce significantly.
The distribution operates under the FIFO system, also known as first in, first out, due to the lack of consensus among Argentina, Brazil, Paraguay, and Uruguay on how to internally distribute the preferential-tariff quotas granted by the European Union for sensitive products such as rice, beef, and honey. The situation has generated growing diplomatic tensions. Argentine Minister for Deregulation and State Transformation Federico Sturzenegger had recently celebrated Argentine producers capturing the honey and egg quotas, and on Thursday also claimed credit for the rice quota in a post on X, a statement that contrasts with the 63% figure officially confirmed by the Uruguayan Foreign Ministry.
Csukasi acknowledged that the situation is going to force the Mercosur partners to reach an agreement on the internal distribution of the quotas to avoid the uncertainty generated by the current regime. The beef quota, considered the most relevant for the Uruguayan economy, remains pending definition.