GLOBAL MARKET OUTLOOK FOR RICE

Prospects for Japanese Rice Prospects for Chinese Rice

Over the years Japan has been dependent China is expected to have largest
upon the domestic production of rice year ending rice stock all over the
instead of importing, but in past few years world, estimated to be around 75.7
along with the exports, an increase in million tons. China consists of 30
imports has been analyzed. The system million hectare land area under rice
known as gentan, which was designed to cultivation which as compared to
protect farmers from fluctuating prices, now India stands at second position, but
has deteriorated the Japan agriculture the use of advanced agriculture
sector, where the landowners pocket the equipment and better irrigation
government subsidy and keeping the fields facilities has led China to remain at
left idle. On an average per person, rice highest rice producing country. Also
consumption has fell down by 38.0% over China accounts for being the largest
the past decade owing to decreasing rice consumer of rice. It accounts for
supply and growing preference for wheat around 30% consumption of
and meat food. As per the government, globally produced rice. China is also
gentan system was expected to be ruled out one of the major producers of
by 2018 that will bring out structural hybrid rice.Per hectare hybrid rice
changes in the agricultural industry. The production dropped on account of
technological advancement in Japan has led flood occurrences but also there
to heavy use of drones in spraying rice has been notable increase in land
paddies. Also insect-detecting drones are area producing hybrid rice. Thus the
under development to be used against value of hybrid rice produced
white-backed plant-hoppers, an insect remains same. China is expected
harmful to rice fields. Japan recorded 28.0% to suffer from over stock of
growth in rice exports and is expected to hybrid rice, estimated to be
continue its growth rate backed by the around 120 million kg due to
technology adaptation and roll out of declining domestic demand and
gentan system. lower value of exports as
compared to total hybrid rice
seed supply.

Prospects for Cambodian Rice Prospects for Indonesian

Cambodia is one of the major producers
Rice
and exporter of rice. With the lack of Indonesia is third largest producer
warehouses, processing facilities and of rice and one of the top importers
logistics around 80% of the surplus rice due to use of non-optimal farming
produced is exported to neighboring techniques by the farmers that
countries. Of the total requirement, result in limited supply of rice,
Cambodia produces 5 million tons rice in combined with huge rice
surplus.The exports are expected to grow by consumption by massive
15% per annum. China held the largest population, approx 150 kg.
share among the export countries of Indonesia imports rice mainly from
Cambodia, supplying majorly the aromatic Thailand, Vietnam and India. Rice
rice variety. European market would remain imported from Vietnam is of
stable in 2020 in terms of importing rice premium quality, and Indonesia
from Cambodia. With India, Thailand and produces only medium quality rice.
Vietnam being the major competitors, In 2020, it is expected to import
Cambodia is now forced develop profitable 500,000 tons rice from Vietnam. In
alternatives such as advanced irrigation order to become rice self-
technologies, infrastructure development, sufficient country, government
smart techniques to maintain soil and land steps upby proving subsidized
fertility and cost effective agricultural fertilizer and stimulating for the use
strategies. of advanced technology, and
through campaigns promoting
the other staple crops to reduce
rice consumption such as ‘one
day without rice’ (each week)
campaign.
 Prospects for United States Rice
U.S. is major exporter of rice, majorly to Mexico, Northeast Asia, Central America, the
Caribbean, Canada, the Middle East, the European Union, and Sub-Saharan Africa. Asian
aromatic rice such as Basmati and Jasmine rice are majorly imported by the U.S.A. United
States accounts 2% of global rice production and 10% of global exports. Major exported
rice varieties are rough rice, brown rice, parboiled rice and fully milled rice There are 1000
of varieties of rice produced worldwide and 20 types of rice are commercially produced in
U.S., majorly in states of Texas, Arkansas, Mississippi, California, Louisiana and Missouri.
U.S. rice exported is regulated by the agreements between The World Trade Organization
(WTO) and the North American Free Trade Agreement (NAFTA), and thus it has resulted in
spurring rice exports from the United States.

Prospects for Vietnam Rice Prospects for Singapore Rice

Vietnam is third largest exporter of rice and Singapore had 347,000 metric tons
by 2020 the total exports are expected to consumption of rice, which was completely
reach 7 million tons on account of growing imported from Vietnam, Thailand and India.
rice demand from Southeast Asia, majorly For many decades Thailand had been
from Philippines. Over the past decade major exporter of rice to Singapore but
Vietnam has increased its rice productivity since 2013 India overtook Thailand.
and profitability and significantly reducing Singapore imports jasmine rice, Vietnamese
poverty. Government is seen to shift its rice and many others, but Vietnamese rice
focus from reducing the poverty towards pose greater competition to supply of other
emphasis on technology usage to eliminate varieties of rice in Singapore due to the use
labor intensive farming and thus impacting of advanced technology in its production
the growth in productivity of the farmers. that beats the Singapore standards.
The consumption of rice is growing at Singaporeans do not have high demand
steady rate as per the slow population for rice, they prefer various other dishes.
growth rate, having domestic milled rice The tourists in Singapore with distinct taste
demand estimated to be nearly 2 million and preference are the major consumers of
tons annually. Vietnam has poor climate rice. Therefore the growth in Singapore
condition in months of winter-spring, but travel and tourism industry and food
the months of May-June are most suitable services industry are majorly driving the
for cultivation of rice. Thus Indica rice growth of Singapore rice industry.
variety demand produced in Vietnam Additionally, in recent years the street
spur up, boosting the exports of rice. eateries and restaurants have begun to buy
rice, a price efficient alternative to sustain in
the era of rising prices, is another factor
inducing the demand for rice in Singapore.
Opportunity for Indian basmati rice exports

CHINA JAPAN
China is relatively new market for Downward adjustment in this region
Indian exporters, despite of this makes it possible export market
China has already inspected &
cleared 5 additional rice mills in India MYANMAR
(from the previous 19) for exporting
non-basmati rice & the phytosanitary Improper usage of fertilizers,
measures have also been updated to insufficient irrigation & lack of good
include such exports. If India can infrastructure is affecting Myanmar
continue to prevent pests from exports of rice, that too of low quality.
infecting, especially the khapra Also, it has faced severe backlash from
beetle for basmati rice, this can the African market due to the same
prove to be profitable as well as reason of low quality. This might
new routes for basmati also in the prove to be an advantage for India in
long run. terms of utilizing the African market
for trading both rice varieties

UNITED ARAB
EMIRATES
Many trading scams have
happened with UAE or Dubai as
the base of operations, some very
recently (like the Al Rawnaq Al
Thahbhi General Trading LLC), and
hence its credibility is at risk.
However, India needs to be
extremely cautious too while
accepting orders
IVORY COAST YEMEN
Demand in Ivory Coast is expected to
Political conflicts & pests have affected
increase due to growing consumer class
crop production, especially due to high
of people, seasonal variability of rains
prices of fertilizers & seeds. This could
having affected crop plantations as well
as decrease in arable land. Also, be a good opportunity to market low-
matching the low local prices via non- priced varieties of non-basmati rice,
basmati varieties can help in maintaining especially to help the impoverished
an export channel, but India must be people living without employment due
aware of China succeeding the price war to the unrest
for non-basmati as well as restructuring
of rice cultivation system in Ivory Coast

UAE SAUDI ARABIA

As UAE is already starting to grow As water is scarce & rice is water-

seawater rice varieties, a proper and intensive, it is not being cultivated in
significant rebranding of Basmati rice in that region. Moreover, Saudi Arabia is
this region is the only way to sustain encouraging for abroad investments to
imports of at least this variety import rice and other food crops,
representing an opportunity to tap into
these investment offers

CANADA HONG KONG

Growing of a cold-resistant variety is High land prices, lack of effective

only in the trial stages, and growing rice transport mechanism to major ports are
is still and issue due to high issues faced by Hong Kong farmers. This
infrastructure costs, hence our represents an opportunity for India to
differentiation via 8-digit or higher HS export non-basmati rice varieties as Thai
Codes should help India stay safe of rice imports (a staple in this area) are
competition and in continued demand going to be reduced in the coming
months.
Key highlights

 The rice market is projected to register a CAGR of 0.88% during the period 2019-2024.
 The biggest export market for Indian basmati rice remains uncertain. Iran may not start
importing from India this year until a political resolution is in place. Since US economic
sanctions on Iran, India stopped importing crude oil from Iran.
 In 2020, price of the Indian long grain high quality white rice expected to be lower than
Vietnam rice.
 Export of rice (except seed quality and other rice in husk) is free, subject to condition
circulated by DGFT. Import of seeds is restricted. Whereas, import of rice for human
consumption is permitted through State Trading Enterprises.
 Pakistan is all set to improve its trade relations with Iran. The recent visit of
the parliamentary delegation of Pakistan to Iran discussed increase of trade between both
the countries to its true potential. As a result, Iran bought around 20,000 tons of rice from
Pakistan.
 On the basis of rice variety, japonica rice accounted for largest market share in with 87.2%
of total rice production. Over the forecast period japonica rice is expected to continue
their dominance in the rice production. Further, imports of aromatic rice have increased
the market share and are expected to grow at a CAGR of 1.8%.
 Indonesia:- Downward adjustment in production due to conditions being favourable for
dry-season rice rather than wet-season (which is Indian rice’s season) provide opportunity
for us to export off-season
  Philippines:- Recent lift of import quotas as well as strong domestic demand shows good
opportunity for India to export here, however the Rice Tariffication Law might provide
some hindrance, which can prevented by 8-digit and above specification
 Japan:- Downward adjustment in this region make it possible export market
 Islamic Republic of Iran:- Recent floods have downgraded the harvest output, signaling a
fresh need for imports in order to refill stocks, thereby providing an opportunity

GLOBAL DOMINANCE OF RICE AS

STAPLE FOOD
The rice market is projected to register a CAGR
of 0.88% during the forecast period (2019-
2024). Rice is the staple food of more than half
of the world population, with more than 700
million metric ton produced annually at a global
level. Most of the rice is grown and consumed
in the Asian region, from Pakistan in the west to
Japan in the east. Rice is the second-most
important cereal crop after maize in the world.
It is a crop that ensures food security in many of
the developing countries of the East Asia and the Southeast Asia regions. Therefore, rice
being the most consumed cereal grain globally, the growth of the rice market is expected
to increase.

Global Consumption of Rice has Shown Constant Increase

600000 4,38,338 4,60,825 4,73,878 4,68,862 4,82,727

Global consumption of rice
4,74,845 4,83,817 4,90,266
Consumption in thousand

500000 4,37,179 4,45,084 4,62,623

has seen a slight increase
400000
Total rice 300000 overmetric
consumption worldwide from 2008/2009 to 2018/2019 (in 1,000 the last several years.
tons)*
metric tons

Total global rice consumption 2008-2019 In the 2018/2019 crop year,

200000
about 490.27 million metric
100000
tons of rice was consumed
0
worldwide, up from 437.18
million metric tons in the
2008/2009 crop year.
Out of the total rice consumption, global Basmati rice consumption is
expected to increase by 5.7%
The worldwide market for
The size of the global rice industry is approximately basmati rice is anticipated to
US$275 billion, of which, Basmati industry accounts for rise to US$17.74 bn by 2022,
proliferating at a robust
US$5.8 billion (2.1%). Global Basmati Rice consumption
CAGR of 11.0% during the
market is led by Middle East and Middle East is the largest
period from 2017 to 2022.In
region consumption market, accounting for about 27.08%
2023 the consumption of
of global consumption of Basmati Rice.
Basmati Rice is estimated to
India accounts for around 72% of Basmati rice produced, while Pakistan accounts
be 17613.7.9 K MT. for
28%.Basmati Rice coming from Indian origin has been able to capture captured about
76.57% of Basmati Rice market as against Pakistani and Kenyan Basmati rice.

WHAT WOULD DRIVE BASMATI EXPORTS IN 2020?

Rice is a staple crop for 70% of the world and thus the demand for rice is expected to
continue to grow over the forecast period. The food security concerns all over the world is
driving the growth of the India rice industry, which by exporting rice to various countries
is contributing towards global food security.Global market is expected to witness
significant growth on account of rising applications, so in the next few years, Basmati Rice
consumption will show a trend of steady growth. In 2023 the consumption of Basmati
Rice is estimated to be 17613.7.9 K MT.

Basmati rice is increasingly becoming the choice across consumer groups mainly because
of its superior taste and aroma that is highly pleasing to the senses. This gives India huge
potential of exporting Basmati rice around the world.Basmati Rice downstream is wide
and recently Basmati Rice has acquired increasing significance in various fields of Direct
Edible and Deep Processing. Globally, the Basmati Rice market is mainly driven by
growing demand for Direct Edible. Direct Edible accounts for nearly 94.72% of total
downstream consumption of Basmati Rice in global.Basmati grains contain about 0.09
ppm of this aromatic chemical compound naturally, a level that is about 12 times more
than non-basmati rice varieties, giving basmati its distinctive spicy fragrance and flavour.
This natural aroma is also found in cheese, fruits and other cereals. It is a flavoring agent
approved in the United States and Europe, and is used in bakery products for aroma.
The requirement for particular rice like Basmati rice is enormously developing in Europe,
particularly in Germany and the Netherlands, with the enhanced rice usage, which is
estimated to prosper the market development. Also, tricyclazole is the fungicide
implemented to save the food crops, involving rice crops, from blast disease, and the
European Union is estimated to minimize the remaining limit of this fungicide. Also, strict
rules abided by the European Union to minimize the tolerance level of tricyclazole
fungicide are estimated to grow the basmati rice export from India.

Rising disposable income is Increasing awareness about

benefiting the basmati rice health ill-effects of consuming
market polished rice might work as
deterrent
Although Basmati represents a small part
of India’s US$221 billion agriculture On the flip side though, high price of
industry, it offers India, its leading basmati rice over other rice variants is a
producer, high product visibility in the key challenge to the market’s growth.
world market. The export demand for Basmati rice remains a premium grain not
basmati rice is projected to improve further affordable by the average consumer. In
in the near future, adding considerably to addition, increasing awareness about
the market’s growth. Across several parts health ill-effects of consuming polished
of the world, rising disposable income is rice on an everyday basis is leading
benefiting the basmati rice market. consumers to switch to unpolished rice
Consumers are increasingly spending varieties. This is challenging the growth of
liberally on premium quality grains, lentils basmati rice market to some extent.
and spices for a fulfilling eating experience.
Its sad news for Basmati rice in its most traditional market: Iran

 Iran’s Basmati Rice Production Hits New High

It is the first time in many years that Iran declared self-sufficiency of basmati rice production. This
would save basmati rice imports worth 1.1 billion dollars. Iran’s basmati rice production projected
at 2.9 to 3 million tons. The average demand of 83 million people in the country sums up to three
million tonnes for a year.

 Iran Disappointed with Indian Government

The end of oil imports from Iran to India has created tension among the two countries. Since Iran
expected India to be more resilient to US pressure and has expressed disappointment in India for
taking up US orders so easily. As a result of this displeasure, Iran will stop import of basmati rice
and other food products from India. Iran advised India to take actions that meet the interests of
both countries.

 Pakistan and Iran Strengthen Ties

In conclusion, the exporters
and farmers will have to
Pakistan is all set to improve its trade relations with Iran.
bear the consequences of
The recent visit of the parliamentary delegation of the trade relations between
Pakistan to Iran discussed increase of trade between both the nations. Current harvest
the countries to its true potential. Iran bought around season of paddy fetched
20,000 tons of rice from Pakistan in 2018. Rice has the low prices to basmati
major share in Pakistan’s export basket.Rice worth two growers and farmers are
bearing current impact of
billion dollars is exported every year and this value will
Iran sanctions.
increase to five billion in the next five years.

The Pakistan government is making efforts to enhance policies to increase production and quality
of basmati rice. With Iran partnership strengthening, Pakistan basmati rice exporters may reap
benefits this year.
BASMATI RICE: THE INDIAN STORY
Basmati rice enjoys an excellent position among all the other rice varieties in the world market
due to its excellent taste, delicious taste and distinctive flavor. Rice is an important part of Middle
Eastern cuisine and is considered a staple in many countries. Basmati rice is extensively used in a
number of dish-like rice-based dishes, which contain low rice, meat, sauces and dried fruits.

Indian Basmati Rice

Market will register a
CAGR of +6% over the
forecast period 2019-
2025.
Domestic and International Price Movement for Long White Rice 25% Broken

In the month of Mar, 2019, price of theIndian long grain high quality white rice was lower than
Vietnam rice.
Export Policy: Export of rice (except seed quality and other rice in husk) is free, subject to
condition circulated by DGFT

Import Policy: Import of seeds is restricted. Whereas, import of rice for human consumption is
permitted through State Trading Enterprises

Import Duty

POTENTIAL FOR INDIAN BASMATI RICE

13,27,063

7,84,583
6,67,670

4,77,906
3,71,023
2,89,288
2,51,171 2,27,046 1,26,27793,674
 Competing countriesanalysis for Newer destinations for Indian Basmati Rice

India's share
Average Share of L2 in
in Unit Price Unit Price of FINAL
Top 15 Destination Tariff FLP India competing Destination Average
Destination (India) - competing LANDING
Countries (India) - (USD/tonne) countries Country's tariff
Country's USD/tonne countries PRICE
in % Imports
Imports

South Africa 27.8 618 0 618 Thailand 64.6 431 0 431

United Arab
South Africa Emirates 2 621 0 621
Hong Kong,
South Africa China 1.5 511 0 511
South Africa Pakistan 0.7 856 0 856
South Africa Malaysia 0.6 535 0 535
Malaysia 8.1 912 0 912 Thailand 51.1 437 20 524.4
Malaysia Vietnam 26.4 524 20 628.8
Malaysia Cambodia 8.6 857 20 1028.4
Malaysia Pakistan 3.8 622 20 870.8
Malaysia Myanmar 1.5 352 20 492.8
Yemen 65.2 883 0 883 Thailand 19.8 403 0 403
Yemen Pakistan 9.8 734 0 734
Korea,
Yemen Republic of 1.8 1077 0 1077
United Arab
1.6
Yemen Emirates 842 0 842
Yemen China 0.8 870 0 870
France 6 1446 22 1764.12 Italy 30.4 995 0 995
France Thailand 15.6 1167 22 1423.74
France Cambodia 15.3 836 11.8 934.648
France Spain 14 1364 0 1364
France Belgium 4.9 1446 0 1446
Kuwait 91.5 1269 0 1269 Thailand 2.8 930 0 930
Kuwait Australia 2 1342 0 1342
Kuwait Pakistan 1.6 875 0 875
Kuwait Vietnam 0.8 765 0 765
United
States of
Kuwait America 0.5 1381 0 1381
United
States of
Canada 21 1266 0 1226 America 40.9 824 0 824
Canada Thailand 29.6 1024 0 1024
Canada Pakistan 3.4 1203 0 1203
Canada Vietnam 1.8 698 0 698
Canada Italy 0.8 1203 0 1203
Niger 1.8 592 10 651.2 Thailand 67.9 544 10 598.4
Niger China 11.1 603 10 663.3
Niger USA 9.2 2321 10 2553.1
Niger Pakistan 8.2 552 10 607.2
Niger Japan 1.8 1063 10 1169.3
Hong Kong, China 0.5 1311 0 1311 Thailand 64 1033 0 1033
Hong Kong, China Vietnam 16.2 625 0 625
Hong Kong, China China 6.3 792 0 792
Hong Kong, China Cambodia 4 806 0 806
Hong Kong, China Australia 2.8 858 0 858
Germany 6 1499 22 1828.78 Italy 28.8 963 0 963
Germany Belgium 15.7 1326 0 1326
Germany Netherlands 14.1 1207 0 1207
Germany Cambodia 8.3 664 11.8 742.352
Germany Myanmar 6.9 439 11.8 490.802
Pakistan 14.10% 965 26.00% 1215.9
Singapore 1.40% 558 26.00% 703.08
Iran, Islamic Republic
80.8 1,058 26.00% 1333.08 Thailand 1.40% 457 26.00% 575.82
of
Turkey 1.10% 996 26.00% 1254.96
U.A.E 0.80% 1078 26.00% 1358.28
U.S.A 6% 937 3.20% 966.984
Pakistan 5.60% 777 3.20% 801.864
Saudi Arabia 79.8 1,059 0.00% 1059 Thailand 3.60% 741 3.20% 764.712
Australia 3.10% 749 3.20% 772.968
Vietnam 1.00% 741 3.20% 764.712
Thailand 37.30% 486 5.30% 511.758
Vietnam 34.80% 470 5.30% 494.91
Indonesia 13.4 412 5.30% 433.836 Pakistan 13.00% 432 5.30% 454.896
Myanmar 1.50% 363 5.30% 382.239
Australia 0.10% 4798 5.30% 5052.294
Thailand 48.20% 421 34.70% 567.087
China 4.20% 529 49.60% 791.384
Philippines 6.1 615 49.60% 920.04 Vietnam 38.10% 415 34.70% 559.005
Myanmar 0.50% 57 34.70% 76.779
Pakistan 2.90% 378 49.60% 565.488
Viet Nam 46.2 510 4620.00% 24072
Thailand 31.8 565 6030.00% 34634.5
Pakistan 9.1 425 0.00% 425
China 42 420 60.30% 673.26 Cambodia 7.7 755 4620.00% 35636
Lao
People's
Democratic
Republi 2.4 515 0.00% 515
Côte d'Ivoire 18.2 446 10.00% 490.6 China 10.00% 377 10.00% 414.7
 Vietnam 10.00% 633 10.00% 696.3
thailand 10.00% 502 10.00% 552.2
Myanmar 10.00% 446 10.00% 490.6
Pakistan 10.00% 381 10.00% 419.1
U.S.A 54.50% 910 252.20% 3205.02
Thailand 23.10% 963 252.20% 3391.686
Japan 0.2 1546 251.10% 5428.006 China 11.00% 876 252.20% 3085.272
Australia 10.80% 832 36.20% 1133.184
Pakistan 0.20% 1444 252.20% 5085.768
Pakistan 11.60% 816 0.00% 816
Vietnam 4.40% 570 0.00% 570
United Arab Emirates 78 857 0.00% 857 Thailand 2.80% 521 0.00% 521
Australia 1.10% 1246 0.00% 1246
U.S.A 1.00% 1245 0.00% 1245