Download 178724_GLOBAL RICE MARKET PRIMER

GLOBAL RICE MARKET PRIMER
SUMMARY
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Rice is a major world staple that is important to countries across the globe;
Most rice that is consumed is grown domestically, and governments actively
protect most major domestic rice production industries from exposure to
lower global pricing;
Rice trade totals only around 8 percent of total production, and is currently at
its highest level since WWII;
Demand is projected to rise over the next decade due to population growth,
mostly in Southeast Asia;
Total production of rice is expected to rise, but not at the same pace as
demand;
Nearly all gains in production will be achieved through higher yields resulting
from technological developments;
Most of the world’s arable land suitable for rice is already under cultivation,
and the potential for expanding land use for rice production is limited;
Region-specific data is included in the body of the document.
EXPOSURE
Although a great number of countries rely on imports for the vast majority of their
consumption, these country as also low per capita rice consumers. Countries that
consume a great deal of rice as a percentage of their daily basket are also suitable
for rice production. Exceptions to this rule include Singapore, Cuba, and DPRK.
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Countries that import 90-100% of rice consumption: Israel, South
Africa, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Canada,
Croatia, Djibouti Afars-Issas, Hong Kong, Jamaica and Dep, Kuwait, Lebanon,
Libya, Mauritius, Oman, Papua New Guinea, Reunion, Singapore, Syria,
United Arab Emirates, Yemen, Somalia, Algeria, Brunei, Switzerland, Angola,
Trinidad and Tobago, Senegal and Jordan
Countries that import 50-90% of rice consumption: Saudi Arabia,
Cameroon, Iraq, El Salvador, Mexico, Honduras, Niger, Sudan, Benin,
Gambia, Kenya, Ghana, Cuba, Haiti, Guatemala, Togo, Australia,
Mozambique, Burkina, Kyrgyzstan, Chile and Ukraine
Countries that import 25-50% of rice consumption: Morocco, Cote
d'Ivoire, Mauritania, Liberia, Costa Rica, EU-27, Zambia, Nicaragua, Malaysia,
Russian Federation, Nigeria, Turkey, Afghanistan, Guinea, Guinea-Bissau,
Sierra Leone, Paraguay and Iran
Top Importers
Top Consumers
(volume)
Top Consumers (per
capita)
Top Producers
Philippines
China
Colombia
China
Nigeria
India
India
India
EU-27
Indonesia
Cambodia
Indonesia
Saudi Arabia
Bangladesh
Laos
Bangladesh
Bangladesh
Vietnam
Vietnam
Vietnam
Iran
Philippines
Burma, Union of
Thailand
Iraq
Burma, Union of
Bangladesh
Philippines
Malaysia
Thailand
Indonesia
Myanmar
South Africa
Brazil
Thailand
Brazil
Indonesia
Japan
Iraq
Japan
United States
Nigeria
Philippines
United States
Japan
Korea, Republic of
Madagascar
Pakistan
Senegal
United States
Sri Lanka
ROK
Cote d'Ivoire
Cambodia
Nepal
Egypt
Mexico
Egypt
China
Cambodia
Brazil
Iran
Malaysia
Nigeria
Cuba
Nepal
DPRK
Nepal
Vietnam
EU-27
ROK
Madagascar
DPRK
Pakistan
Guinea
Sri Lanka
Singapore
Madagascar
Singapore
Iran
Main resources: http://www.ers.usda.gov/Briefing/Rice/2008baseline.htm
http://www.ers.usda.gov/Briefing/Rice/background.htm#staple
Data: http://www.fas.usda.gov/psdonline/psdQuery.aspx
Rice as a staple: Rice is the primary staple for more than half the world's
population, with Asia and Africa the largest consuming regions. Developing countries
have long depended on its versatility and high caloric value. In recent decades,
consumption has increased in developed Western countries.
An ancient grain, rice is known to have been domesticated as early as the fifth
millennium B.C. The species cultivated in Asia, believed to be where rice originated,
is Oryza sativa from the Graminaceae (grass) family. It is also the species cultivated
in most of today's rice-producing countries. Rice is produced worldwide and is the
world's second- or third-largest staple crop, behind corn (maize) and, prior to
milling, about the same as total wheat production.
Although rice is produced over vast areas of the world, the physical requirements for
growing rice (available water, soil types) are limited to certain areas. Economically
sound production typically requires high average temperatures during the growing
season, a plentiful supply of water applied in a timely fashion, a smooth land surface
to facilitate uniform flooding and drainage, and a subsoil hardpan that inhibits the
percolation of water.
Four major types of rice are produced worldwide:
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Indica is grown mostly in tropical and subtropical regions and accounts for
more than 75 percent of global trade. Indica rice cooks dry, with separate
grains.
Japonica rice, typically grown in regions with cooler climates, accounts for
more than 10 percent of global rice trade.
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Aromatic rice, primarily jasmine from Thailand and basmati from India and
Pakistan, accounts for more than 10 percent of global trade and typically sells
at a premium in world markets.
Glutinous rice, grown mostly in Southeast Asia and used in desserts and
ceremonial dishes, accounts for most of the remainder.
Pests, blights and floods: Major rice diseases include Rice Ragged Stunt, Sheath
Blight and Tungro. Rice blast, caused by the fungus Magnaporthe grisea, is the most
significant disease affecting rice cultivation. Rice crops can also be negatively
impacted by weeds, insects, rodents, and birds. Floods are a major concern, as well
as drought, although some drought and flood-resistant strains are under
development.
Marketing rice: For rice, care is necessary throughout the production, drying,
storage, milling, and marketing phases to minimize the number of broken kernels,
which sell at a considerable discount to whole-kernel rice.
Five different products (or types of rice) can be produced from rough rice: hulls,
bran, brown rice, whole-kernel milled rice, and brokens (broken-kernel milled rice).
The first stage of milling removes the hull, producing brown rice that can be cooked
and consumed. The next stage of milling removes the bran layer, leaving milled
white rice. Or, prior to milling, rough rice may be parboiled, a process of soaking the
rice in water and steaming it under intense pressure. Parboiling makes the rice less
likely to break during milling and pushes nutrients from the bran layer into the
kernel. Parboiled rice typically sells at a premium. On average, for every 100 pounds
of rough rice produced, about 55 pounds of whole-kernel milled rice, 15 pounds of
brokens, 8-9 pounds of bran, and 20 pounds of hull are produced.
Global rice trade: International trade in rice is quite thin relative to total
production. Only about 7 percent of global rice production is traded each year, well
below the trade shares for other grains and oilseeds. Twenty years ago, the trade
share for rice was barely 4 percent. Increased market access has accounted for
much of the expansion. This has been especially true for much of Latin America,
where countries began to open their markets to imports in the late 1980s. Despite
greater market liberalization, many governments worldwide—especially in Northeast
Asia—continue to severely limit rice imports and protect their producers. These
policies limit the volume of world rice trade.
In addition to being a relatively thin market, the global rice market is heavily
segmented, with little substitution among types and qualities by producers or
consumers. Long grain typically accounts for more than 75 percent of global rice
trade. Medium- and short-grain rice combined account for about 12 percent of global
trade. Fragrant or aromatic rice accounts for about 12 percent. Specialty rices—
primarily glutinous rice—account for most of the remainder. Rice can also be traded
in various degrees of milling: fully milled (or polished) rice, brown rice (sometimes
referred to as cargo rice), or rough (paddy) rice.
Land use not to expand: Global rice production is projected to increase about 7
percent over the next decade, almost entirely due to rising yields. Average yields are
projected to increase less than 1 percent a year—about the same average gain
achieved during the previous 10 years, but well below growth achieved from the late
1960s through the 1980s, when modern high-yielding varieties were adopted in
much of Asia and Latin America. Nearly all available land that can grow modern highyielding varieties—primarily irrigated fields—has been switched to these varieties.
High-yielding varieties for the less favorable ecosystems—dryland, flood-prone, and
rainfed lowlands—have not been developed.
Global rice area is projected to remain nearly flat over the projections period, about
1 percent below the 1999/2000 record. Most Asian countries have little, if any, ability
to expand rice area. Over the next decade, smaller plantings in China are projected
to be nearly offset by expanded rice acreage in Sub-Saharan Africa and the Western
Hemisphere. India, Sub-Saharan Africa, Bangladesh, the Philippines, Argentina,
Brazil, other South American countries, Thailand, and the United States account for
most of the expected increase in global rice production.
Growth in global rice demand: Global rice consumption is projected to increase
almost 1 percent a year over the next decade, slightly outpacing production.
Consumption growth is largely due to a rising population in Asia and a small increase
in per capita rice disappearance in certain non-Asian rice-consuming countries,
mostly in the Western Hemisphere and the Middle East. Many Asian countries—
especially high- and medium-income countries—are experiencing declining per capita
rice disappearance due to diet diversification resulting from higher incomes. Even in
many low-income Asian countries, per capita rice disappearance is nearly stable.
Total rice consumption in China—the world’s largest rice-consuming country—is
projected to remain flat over the decade, as the impact of population growth is offset
by declining per capita rice consumption. In contrast, India, Indonesia, and
Bangladesh—the largest rice-consuming countries after China—are expected to
consume larger quantities of rice each year. These three Asian countries, plus SubSaharan Africa, the Philippines, and Iran, account for most of the expected increase
in global rice consumption over the next 10 years.
Long-grain rice is expected to account for the bulk of the growth in global rice trade
from 2008/09-2017/18. Long-grain rice is imported by a broad spectrum of countries
in South and Southeast Asia, much of the Middle East, Sub-Saharan Africa, and Latin
America. Medium/short-grain rice is primarily imported by Northeast Asia—Japan,
South Korea, and Taiwan—and to a much lesser extent by several countries in the
eastern Mediterranean, with Turkey the largest. Oceania imports smaller amounts of
medium/short-grain rice. Expansion in the global medium/short-grain trade is
projected to be much slower than for long grain.
On balance, consumption growth is projected to slightly outstrip production
increases, pulling ending stocks down about 5 percent by 2017/18. The Philippines
accounts for most of the decrease in global ending stocks over the next decade. In
contrast, China is projected to boost stocks slightly after nearly a decade of decline.
The global stocks-to-use ratio is expected to fall from 17.4 percent in 2007/08 to
15.5 percent in 2017/18, the smallest since 1977/78.
Global trade growth: Trade growth is projected to be slightly stronger in 2008/09
than in the rest of the projections. From 2009/10 until the end of the period, global
rice trade is projected to increase 2.2-2.5 percent a year, reaching a record 37.4
million metric tons in 2017/18. Trade is expected to account for more than 8 percent
of annual production by 2017/18, the highest share since before World War II.
Increased global rice trade is primarily driven by rising import demand from
Indonesia, the Philippines, Bangladesh, the Middle East, and Sub-Saharan Africa.
Combined, these five markets account for about 70 percent of the increase in global
rice imports over the projections period.
Regional trade patterns
South Asia/Asia:
Asia is expected to continue to account for the bulk of rice exports over the
projections period. Five countries—Thailand, Vietnam, India, Pakistan, and China—
account for almost 75 percent of rice exports throughout the decade.
Rising imports by Indonesia and Bangladesh are driven by growing populations,
little ability to expand rice area, and competition for arable land from substitute
crops and nonagricultural uses. For Indonesia, land constraints and an already-high
crop intensity—especially on the island of Java—indicate little opportunity to
significantly expand production. Yields are projected to continue rising in
Bangladesh, as its high-yielding boro crop continues to account for a larger share of
total rice area. Even with expanded area and higher yields, production growth is not
expected to keep pace with rising demand in the Philippines. Much of the recent
increase in Philippine rice production has been due to the adoption of high-yielding
hybrid varieties. In contrast to Indonesia, per capita disappearance is projected to
continue rising in the Philippines and Bangladesh. Even with rising imports, domestic
production is still expected to account for the bulk of the rice consumed in Indonesia,
the Philippines, and Bangladesh.
Thailand and Vietnam, the world's largest rice-exporting countries, account for
nearly half of all rice exports and nearly 75 percent of the projected increase. From
2007/08 to 2017/18, Thailand’s exports increase 47 percent to more than 13.0
million metric tons. During the same time, Vietnam’s exports increase 30 percent to
6.5 million metric tons. Rising production and declining per capita consumption
account for the expansion in exports for both countries. Higher yields account for all
of Vietnam’s production expansion. Both area and yield increase over the next
decade in Thailand. Their combined share of global rice trade increases from 48 to 53
percent over the next 10 years.
India’s exports slowly decline over the next decade, as consumption growth
outstrips production. India’s exports decline from 3.6 million metric tons in 2008/09
to less than 3.3 million by 2017/18. India, currently the third largest exporter, drops
to fourth in 2009/10. High internal price supports in the country continue to
encourage large production and exportable supplies.
Pakistan—currently, the fifth-largest rice exporting country—has little ability to
expand rice area. Producers are facing a growing water shortage, antiquated
infrastructure, and agriculture-related environmental problems. Pakistan’s exports
are projected to increase just 100,000 metric tons over the decade, to 3.5 million
metric tons by 2017/18, still below the 2005/06 record.
Rice exports from China—currently, the world's sixth-largest exporter—increase
from 1.7 million metric tons in 2008/09 to almost 2.5 million metric tons by
2017/18. Flat total consumption and a slight increase in production allow China to
export a little more rice each year. Prior to 2003/04, China typically exported more
than 2 million metric tons of rice a year. China reduced its exports in 2003/04 and
2004/05 due to tight supplies and high domestic prices.
Only a slight recovery in exports is projected for Australia’s rice industry. Several
years of severe drought have reduced Australia to a very minor rice exporter. The
country was once a major second-tier exporter. In the projections, rice area slowly
increases over the next decade as reservoirs refill. Area reaches 50,000 hectares by
2015/16, well below the record 186,000 hectares harvested in 2000/01 and about
even with the 2004/05 area.
Australia is projected to increase its rice exports each year over the next 10 years.
However, by 2017/18, Australia’s exports will still be less than 40,000 metric tons,
well below the 200,000 exported in 2006/07 and just a small fraction of the more
than 600,000 metric tons shipped in the late-1990s. Australia will be a net importer
throughout the period, although imports decline after 2008/09 as production shows
some recovery.
Middle East Strong consumption growth is behind import expansion by the Middle
East. Except for Iran and Turkey, the Middle East grows very little rice and imports
account for almost two-thirds of its annual rice needs. Most of the Middle East is a
high-quality import market. Iran’s imports are projected flat over the next decade,
as production growth offsets rising demand.
Egypt’s exports are projected to decline almost 30 percent over the next 10 years,
as strong consumption growth outstrips a slight increase in production. Egypt’s
exports are currently at near-record levels. Little increase in area is projected, and
Egypt’s yields are already the highest in the world.
Africa: Despite increasing production, Sub-Saharan Africa is expected to import
larger quantities of rice each year to meet rising consumption, driven by a rapidly
expanding population. No decline in per capita disappearance is expected for SubSaharan Africa; even with stronger economic growth, incomes remain too low for the
majority of consumers to shift away from rice to higher valued foods. Imports
account for slightly less than half of the rice consumed in the region. Imports are
projected to increase slightly for South Africa, a result of growth in consumption.
South Africa does not produce rice.
Eurasia: Rice shipments from the EU are projected to increase slightly from 2008/09
to 2017/18. The EU is not price competitive in most global markets. Most EU rice
exports are shipped to former colonies in Africa and the Middle East, as well as to
countries in Central Asia and other parts of Europe. The EU ships a small amount of
its high-quality Arborio rice, grown in Italy, to higher income countries.
Western Hemisphere:
Imports: Among smaller import markets, Central America, the Caribbean, Mexico,
and the United States are all expected to increase rice imports during the
projections. Production cannot keep pace with consumption growth in Central
America, the Caribbean, and Mexico. Also, in these three markets, rising incomes
typically boost per capita rice consumption. In Central America and the Caribbean,
this is primarily due to the income level of most consumers. Mexico, which has a
higher average income than Central America or the Caribbean, has one of the lowest
per capita rice consumption levels in the Western Hemisphere, indicating substantial
room for growth. Aromatic varieties account for nearly all expansion in U.S. imports.
In contrast to these expanding markets, imports are projected to decline over the
decade for Brazil as per capita consumption declines—a result of rising incomes—and
production increases. For many consumers in Brazil, income levels are high enough
to slowly shift away from rice to higher valued foods.
Exports: The United States accounts for about 11 percent of global rice exports over
the next decade.
Among the smaller exporting nations, Argentina is expected to increase exports
over the projections period. Argentina’s rice exports are projected to expand 5
percent a year during 2008/09-2017/18, as strong production growth more than
offsets growth in domestic consumption. By 2017/18, Argentina exports 700,000
metric tons of rice, up more than 55 percent from 2007/08.
Exports from other South American countries (Uruguay, Guyana, and Suriname)
are projected to remain nearly flat over the next 10 years. Expanded shipments from
Uruguay—the largest exporter in the region—will be partially offset by weaker
shipments from Guyana and Suriname. Both Argentina and Uruguay produce rice
mostly for export.
HARVEST CYCLE
Rice
China
W Africa
SE Asia
S Asia
January
February
March
April
early rice - planting
early rice - planting
single rice - planting
May
early rice - heading
single rice - planting
June
early rice - maturing
single rice - vegatative
July
early rice - harvesting
single rice - heading
late rice - planting
August
early rice - filling
single rice - maturing
late rice - vegatative
September
single rice - harvesting
late rice - heading
October
November
December
single rice - harvesting
late rice - maturing
late rice - harvesting
late rice - harvesting
Coastal planting
Coastal planting
Coastal planting
Sahel - planting
Coastal planting
Sahel - planting
Coastal harvesting
Sahel - planting
Coastal harvesting
Sahel flowering
Coastal harvesting &
2nd planting
Sahel flowering
Coastal - 2nd
vegatative
Sahel Harvesting
harvesting
harvesting
pre-planting
planting
vegatative
Heading
filling
heading
maturing
maturing
harvesting
harvesting
harvesting
harvesting