Many countries in Asia are experiencing declining per capita rice consumption caused by diet diversification as a result of higher incomes.
The USDA’s upward revision of rice stocks for the current season was premised on evidence showing a decline in China’s per capita consumption of rice on the back of rising incomes in urban areas.
China is the largest consumer of rice globally (30% of global consumption), but remains generally self sufficient in its rice requirements, according to Standard Chartered Bank’s report on Commodity Outlook on agriculture. The market continues to be constrained by strong global demand and tight exportable supplies. A stronger Thai baht (Thailand is the largest rice exporter) vs. the USD is also helping to keep rice prices high in dollar terms.
“In view of these reasons we are raising our forecasts for rough rice futures from Q2-07 through Q4 of 2008 with prices averaging $18.5/cwt for the year. We retain the view that the market will remain tight over the coming year despite the reported decline Asian per capita consumption,” report said.
Restrictive export policies across a number of Asian exporters will keep rice prices supported in the near term, report said.
Africa will be hardest hit by India’s rice export restrictions.
As one of the largest exporters of rice, India’s decision to ban the sale of non-basmati rice has important implications for rice consumers globally.
Last year, India exported around 4.5 million tonne of rice or 20% of traded rice, of which approximately 1 million tonne was basmati rice.
Saudi Arabia, as the largest importer of Indian rice, may be affected by the ban on non-basmati rice imports. However, the impact on Saudi will be relatively muted -given that only 20% of its rice imports from India are non-basmati – compared to countries like Nigeria, Bangladesh, South Africa, Cote d’Ivoire, Somalia and Cameroon, the report said. These six countries are the top non-basmati rice importers from India, accounting for over 60% of India’s non-basmati rice exports.
The six countries imported over 2.01million tonne of rice from India in 2006/07, of which 2 million tonnes was non-basmati.