Rice

Production

Global rice production is projected to rise at less than 1 percent per year in the current decade, down from 1.6 percent in the 1990s. As a result, by 2010 world production would reach 440 million tonnes, in milled equivalent, up from 400 million tonnes in the 1998 - 2000 base period. Virtually all the expansion would stem from an intensification of production, with hardly any increase in area anticipated. At the same time, the loss of yield momentum observed in the previous two decades is expected to persist in the medium term.

Such a growth pattern is expected to dominate in Asia where pressure on labour, land and water resources from other growth sectors will limit the scope for an expansion of rice cultivation. In South America, a reduction in government support might stall an expansion in plantings in the next decade. At the same time, the modernization of the sector should sustain a dynamic expansion in yields in the region. Unlike in the other regions, production growth in Africa is expected to rely almost equally on area and yield gains. Little change in production is projected for the developed countries, while the economies in transition might experience dynamic growth, although not sufficient to allow a full recovery to levels of the early 1990s.

Consumption

Global demand for rice in the next decade is expected to expand at slightly more than one percent per year, down from 1.7 percent in the 1990s. By 2010, total rice utilization in the developing countries is projected to reach 424 million tonnes, 46 million tonnes more than the 1998 - 2000 average, while the overall increase would amount to about 3 million tonnes for the combined total of the developed countries and the economies in transition. Average per capita food consumption is anticipated to grow marginally from the base period at 58.2 kg per person. For the developing country group, the rise in population should be the determining factor underpinning rice demand in the next decade, as per capita consumption could dip somewhat. By contrast, growth in per capita intake should sustain the increase in consumption in the transition economies.

Although the utilization of rice for feed increased in recent years, rice remains essentially a grain for human consumption and a staple food for about half of the world population. Worldwide, per capita rice food consumption is projected to grow marginally between the base period and 2010, although a slight contraction is foreseen in the developing countries reflecting mainly changes in the dietary patterns in Southeast Asia. By contrast, per capita consumption is likely to rise in Africa, Latin American and Caribbean (LAC) countries and among the developed and transition countries.

Trade

World rice trade is projected to expand by about 2.2 percent per year to 31.4 million tonnes in 2010 compared to the average of 24.6 million tonnes in the base period. Asian countries are expected to remain the main destination, absorbing 46 percent of the projected volume or 14.6 million tonnes, about 2 million tonnes more than in 1998 - 2000. Shipments to the Near East are expected to rise by less than 2 percent per year to reach 5.4 million tonnes, much slower than the 5 percent annual growth experienced in the 1990s. Imports into Africa are projected to rise by 2.5 million tonnes, with large increases expected in Cote d’Ivoire, Madagascar, Nigeria and Senegal. By contrast, imports by LAC are envisaged to change little, since smaller shipments to Brazil would offset some increases in Mexico, Haiti and Colombia. Together, the developed countries and economies in transition are anticipated to import about 5.6 million tonnes in 2010, 2.1 million tonnes more than in the base period.

By 2010, Asian countries are projected to supply more than three quarters of the international rice market, with the top two exporters, Thailand and Viet Nam, expanding both volumes and shares in total trade. Exports from Cambodia, the Lao People’s Democratic Republic and Myanmar could also surge, as they take advantage of the opening of markets under preferential schemes, such as the EU "Everything but Arms". On the other hand, China could experience reductions as production growth stalls. Exports from both Pakistan and India are anticipated to hover around 2 million tonnes, each, not too different from the base period, with the bulk of the shipments likely to be the high-priced Basmati rice. In the other regions, Argentina, Egypt and Uruguay are anticipated to increase their exports substantially. Developed countries' share of the rice market is projected to shrink from 17 percent in the base period to 12 percent in 2010, as deliveries from the United States fall by the end of the decade. Exports from Australia, however, are projected to rise to some extent.

Issues and uncertainties

In the past three years, China has embarked in new cereal policies that have triggered a strong contraction in production, resulting in a sizeable stock drawdown to bridge the gap with consumption. The Government is not expected to maintain this production policy in the medium term. However, if it did, the country would have to resort massively to imports, which would have a very strong impact on the world rice economy. The opening of a 5.3 million tonne tariff quota by the country in 2004, as part of China’s WTO accession commitments, would facilitate access to the country’s rice domestic market, but the requirement might be much larger, of the order of the 12 million tonne average drawdown of stocks, estimated to have been released by the country between 1999 and 2003. While purchases of this magnitude would boost the volume of international trade, they would also make international prices soar, with indirect effects on the rest of the world production, consumption, trade and stocks as well as on world food security.

Another area of uncertainty that might have a huge bearing on the rice economy is linked to the behaviour of the African countries. The region provided much momentum to the international rice market, since imports to the continent more than doubled between 1995 and 2002, accounting in the latter year for almost 30 percent of overall trade. Governments in the region have shown growing concern over the size of their rice deliveries and foreign exchange outflow. Several of them (in particular Nigeria, the leading rice importer in the region) already took action in 2003 to slow the inflow of rice. A reversal of African countries’ relatively open trade policies for rice would have strong depressing effects on international prices, volume of trade, and on the geographical pattern of production.

Table 2.7. Rice: production projections

^1/ 1998-2000 Average
^2/ Milled equivalent