Rice commodity price is something that keeps on fluctuating but on the other hand, is also profitable. Let us understand the rice commodity price in more depth.
Rice is simply loved by the majority of people. Indian meals are incomplete without rice. Talking about the commodity trading market, rice is also traded in that market.
A Complete Overview of The Rice Commodity Price
Rice is a staple commodity crop consumed by more than half of the world’s population. The total production of rice is 700 million hectares annually throughout the globe. The rice commodity price is estimated to increase by 0.8% of CAGR from 2019 to 2024.
Most of the rice production and consumption is in Asian countries from Pakistan in the west and Japan in the east. Rice is also playing a pivotal role in the food security of south-east Asia in many underdeveloped countries. Rice is also the second-largest crop grown in the world after maize production.
Being one of the most consumed grains globally, one can expect a massive rise in production and consumption of rice in the future along with a suitable increase in rice commodity price.
As we all know that rice is one of the most consumed commodities in the world as it is produced on 700 million hectares of land globally. The two giant rice-growing countries in Asia are India and China.
When the competition is between India and China regarding the growth of rice, China wins the race due to the perfect climate and irrigation systems involved in growing rice. On the other hand, most of the Indian rice grows on the soil of the southern portion of the country. The role of irrigation plays a pivotal role in the rice production of both countries.
China’s rice production and yield are high due to the increased involvement of farmers in irrigation while the Indian rice yield is adopting irrigation channels to the best standards.
The United States produces twenty diverse rice varieties in some central states like California, Texas, Mississippi, and Louisiana. The companies compensate for the increase in demand for jasmine rice and basmati rice by importing them from countries like Thailand, Pakistan, and China.
The production of rice in the US accounts for 1.9% of total rice production in the world. The production of rice in the US was 8.8 million metric tons in 2016, which increased rapidly to 11 million metric tons. In 2018. The US is now the third-largest rice producer in the world after Cambodia.
The recent trends and data expect a massive 10% growth in US rice production as most of the farmers have invested in the growing field.
India is the largest producer and exporter of rice throughout the world. Talking about the Basmati Rice, India is the largest producer of that rice quality. India accounts for 24% of the total rice demand in the world. The largest importer of rice from India includes Saudi Arabia, UAE, and Iraq, accounting for 9.3,9.2,7 percent of total rice production, respectively.
The research, demands, and trends showcase a consistent increase in the rice commodity price in the future for a large number of countries involved in the production of rice to meet global needs.
With the change in time, rice production and consumption have increased a lot. In the 1960s the production of rice was 7.5 million tonnes. This gradually increased a lot in the year 2000-2009 to 28.5 million tons.
So here are some of the global trends that the rice commodity market has witnessed globally. Take a look at some of the highlights.
1. Increase in Exporters
Within a short period of time, the number of rice exporting countries has increased a lot. Along with India and Vietnam, Thailand has emerged as the third-largest exporter of rice in the world. With the increase in the number of exporters, the global or international prices have also changed a lot.
Talking about the 1960s only 69% of the rice was traded or exported globally. But with the change in time, this number has also changed. In the year 2000, it increased to 81%. This is a positive outcome for the rice trading market.
2. Fluctuated Supply
However, the supply of rice is concentrated in a few countries only, i.e. only three, it has actually led to disruptions in the supply and demand cycle of rice. Therefore, the market forces of demand-supply have a major role in the trading of rice.
Though India, Vietnam, and Thailand are the major exporters still the world is too big and any change in the supply policy or the production policy of these countries will have a major effect on the whole of the world.
3. Regulations and Other Laws
Each and every country has its own rules and regulations and certain other policies too. They all work as per that only. As we have mentioned before, there are three countries that are the major exporters of rice in the world. Thus the biggest point here is that if those countries make any amendments to their production policies or export policies, a single decision of those will affect the world at large.
Thus, the rules and regulations of those countries really matter a lot. Moreover, their international policies are extremely important for the world.
4. Market Segmentation of Rice Commodity Price
However, this refers to the ratio of imports and export. In simple terms, the trade of rice is highly scattered. It is not limited to some the countries but rather it is scattered in the whole world. The rice import share is 27% and it keeps on increasing.
Due to its dispersed nature, this largely affects the market price of rice globally. For more relevant information, you can just reach out to PL Global Impex Pte Ltd.