Rice Market is poised to grow at a CAGR of 1.2% during the forecast period (2021-2026). The commercialization of rice has not been much significantly affected by the impact of COVID-19, as compared to other industries, as its demand has been ever so increasing. In Southeast Asia, rice farming was affected due to a lack of access to credit, capital inputs, remittance income. Additionally, restrictions on export resulted in a short supply of the product which in turn caused the rise in price. For instance, with the coronavirus outbreak, Thailandâ€™s rice export prices marked a wholly rise in price almost by 20 percent after the outbreak which was nominally low in early 2020.
Asia-Pacific is identified to be the largest market. 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 East Asia and the Southeast Asia regions.
Therefore, rice being the most consumed cereal grain globally, the growth of the rice market is anticipated to increase. Although North America and Europe are not large consumers of rice, both are currently importing record amounts of rice. Also, these two regions are large markets for Asian aromatic varieties. Over the recent years, the rice market has witnessed considerable growth on the back of the increasing demand for rice in emerging and developing nations across the world.
Key Market Trends
Rising demand for Specialty Rice Varieties Lead to Increased Trade
Basmati rice is known to be one of the best rice in the world known for its sleek, slender, tapering grains with a unique aroma, taste, and for its grain elongation quality upon cooking. Export of the premium variety from India has an 85% share in the Basmati exports market. The United States majorly imports Asian aromatic rice such as Basmati and Jasmine rice. Global export has grown by 10% in 2018-19, primarily due to higher demand from Iran. Other than Iran and the United States, major importers of Basmati rice are UAE, Kuwait, Saudi Arabia, and the United Kingdom.â€‹
According to APEDA, as of 2018-19, India exported to 65% of the overseas basmati rice market, while Pakistan accounted for the remainder. In Europe, demand for specialty and exotic varieties such as basmati or jasmine rice is growing exponentially. A significant share in import rice consists of long-grain Indica rice and aromatic varieties (basmati, jasmine), which are popular varieties in mainly in northern Europe. The United Kingdom dominates the import of basmati rice, mainly from India. Ethnic populations and southern European dishes are important drivers for the consumption of several rice varieties.
Asia-Pacific Dominates the Market
Rice is the staple food of Asia and part of the Pacific. According to Food and Agriculture Organization, about 90% of the worldâ€™s rice is produced in the Asia-Pacific Region in 2019. India and China are the prominent producers of rice with the production of 177.6 million metric ton 211.4 million metric ton respectively in 2019. The Indian government has been encouraging farmers to take up rice cultivation by providing a minimum support price (MSP). For the 2016-17 Kharif season, the Minimum Selling Price (MSP) was at INR 1470 per quintal as compared to INR 1410 per quintal last year.
After China and India, the next largest rice producers are Indonesia, Bangladesh, Viet Nam, Myanmar, and Thailand. However, rice production is affected by various pests and diseases such as Thrips, Planthopper, and Gall Midge. Therefore, players such as Bayer Cropscience, Syngenta are involved in the development of disease and pest-resistant varieties to improve rice production. This is anticipated to further boost rice production in the region
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