Rice Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Rice Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The rice market is poised to register a CAGR of 1.6% during the forecast period, 2022-2027. The commercialization of rice has not been significantly affected by the impact of the COVID-19 outbreak, 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, and remittance income. Additionally, restrictions on exports resulted in a short supply of the product, which, in turn, caused the rise in price. For instance, with the coronavirus outbreak, Thailand’s rice export prices marked a rise almost by 20% 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 wheat, in the world. It is a crop that ensures food security in many developing countries of East Asia and the Southeast Asian regions.

Therefore, since rice is the most consumed cereal grain globally, the rice market is anticipated to grow. 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 TrendsThe Rising Demand for Specialty Rice Varieties Leads to Increased Trade

Basmati rice is one of the best types of rice in the world, known for its sleek, slender, tapering grains with a unique aroma, taste, and grain elongation quality upon cooking. Exports of the premium variety from India have an 85% share in the Basmati exports market. United States majorly imports Asian aromatic rice, such as basmati and jasmine rice. Global export grew by 20% in 2019-2020, primarily due to higher demand from China. Other than China, United States, and Iran in 2020, major importers of basmati rice were Saudi Arabia (USD 95 billion), Iran (USD 59 billion), Iraq (USD 49 billion), United States (USD 19 billion), and the United Arab Emirates (USD 20 billion) in 2021.

According to APEDA, as of 2021, India exported 46,30,463.14 metric ton of basmati rice overseas, while Pakistan accounted for the remainder. In Europe, the demand for specialty and exotic varieties, such as basmati or jasmine rice, is growing exponentially. The major rice importing countries in the world are China (USD 1,459 million), Saudi Arabia (USD 1,404 million), and United States (USD 1,284 million). A significant share of import rice consists of long-grain Indica rice and aromatic varieties (basmati and jasmine), which are popular varieties, mainly in Northern Europe. United Kingdom dominates the imports 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 the Food and Agriculture Organization, about 90% of the world’s rice was 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 and 211.4 million metric ton, respectively, in 2020. The total production of rice in Asia-Pacific will be 749,516.59 million metric ton in 2020. The Indian government has been encouraging farmers to take up rice cultivation by providing a minimum support price (MSP). For the 2021-2022 Kharif season, the minimum selling price (MSP) was at INR 1,940 per quintal compared to INR 1,868 per quintal last year.

After China and India, the next largest rice producers were Bangladesh, Indonesia, Vietnam, and Thailand in 2020. China shares 28% of total production and India with 23.56% in the region. However, rice production is affected by various pests and diseases such as thrips, planthopper, and gall midge. Therefore, players like Bayer Crop Science and Syngenta are involved in the development of the disease- and pest-resistant varieties to improve rice production. This is anticipated to further boost rice production in the region.

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