A Market Report on Rice in the Kingdom of Saudi Arabia
MARKET OVERVIEW Rice is the most important staple food for about one-half of the world population and provides over 20 percent of the global calorie intake. As most of the rice produced is consumed domestically, only 4% of global production is internationally traded. The world rice market is also featured by a high degree of concentration with Asia accounting for nearly 90% of global production and consumption. The market for rice in the Kingdom of Saudi Arabia is geared to trading of imported varieties of rice, while little efforts have been made to grow locally as climatic conditions in Saudi Arabia are generally unsuitable for this crop. In quantity terms, the overall domestic market demand for all types of rice in Saudi Arabia reached 787,000 tones in 1999. Meanwhile, Food and Agricultural Organization (FAO) projected import for rice by Saudi Arabia could reach 1,342,000 tones in 2005, suggesting a yearly compound growth rate of 11.3% in the five year period. In value terms, the overall market value for all types of rice in the Kingdom of Saudi Arabia was estimated at SR 2,500 million in 1999, slightly more than three times its market size of SR 750 million and 250,345 tones in 1989. With a high population growth rate along with a rapidly expanding number of pilgrims, Saudi Arabia’s aggregate consumption of rice was growing at a yearly compound rate of 12.1% since 1989. In the last decade, total rice consumption in the Kingdom of Saudi Arabia grew at a much faster rate than the population growth, expanded by 3.1 folds compared to 1.56 times of population growth. During the same period, the corresponding per capita consumption of milled rice was doubled and rose from a yearly 17.86 kg per person in 1989 to 35.90 kg per person in 1999. Preliminary estimates suggest that the per capita rice consumption in the Kingdom of Saudi Arabia would likely to remain at around 35.5 kg during 2006-2007. However, due to rise in number of pilgrims for Haj and Umra, According to FAO the per capita consumption of rice in the Kingdom of Saudi Arabia at about 47 kg in 2005.
INTERNATIONAL TRADE According to international trade data, rice exports reached at 368,601 tonne (20,186 tonne basmati and 348,415 tonne non-basmati) in July 2005, and 452,022 tonne (91,161 tonne basmati 360,861 tonne non-basmati) in August 2005, taking January-August 2005 exports to around 3.8 million tonne.
Figure 1: Bar diagram showing global production and carrying of rice from 1990-91 to 2006-07 10
Figure 2: Bar diagram showing global production of milled rice from 1992 to 2007 10
Figure 3: Composite bar diagram showing major rice importing countries during years 2005, 2006 and 2007 10
INTERNATIONAL RICE TRADE International rice market is skewed compared to its production. In the 1998-99 crop year, global imports of milled-rice was stood at 21 million tones. Asian countries are the most important importers of rice, accounting for about 49% of the total global exports of rice. Within Asia, countries in the Near-East are likely to remain major growth markets, with imports expected to be sustained by economic recovery. In Saudi Arabia, the demand is likely to grow with the rise of immigrant workforce from other Asian rice eating countries and pilgrims coming for Haj and Umra. On the supplier’s side, milled rice exports from both Thailand and Vietnam are projected to rise in the coming years. Although Thailand would remain the leading rice supplier, it is expected to lose out in terms of market share in favor of Vietnam. Increased sales from Pakistan, Myanmar and Cambodia are expected to rise. In contrast, both India and the United States might export less, while remaining important players in the global market.
GLOBAL PRODUCTION AND CONSUMPTION OF PADDY RICE According to Food and Agriculture Organization (FAO), the...