In wholesale rice trading, numerous elements should be under consideration. Among them, rice’s wholesale price is the most crucial one but it remains unstable.
Contents
About rice
Rice is considered the most important food in the world, followed by wheat, corn, and bananas. Nearly a half of the world population (more than 3 billion people) is dependent on rice as a staple food. More than 120,000 different varieties are classified under various rice types such as black rice, brown rice, or white rice, etc.
Rice – a staple food in the world
Asia is considered the largest rice basket in the world because 90% of rice production is from Asian countries such as India, China, Thailand, and Vietnam.
However, this staple food is becoming important in Latin America and Africa. Latin America experienced an increase of over 250% in total paddy production in recent years. Africa also recorded significant growth in rice production, from 9.3% in 1961 to 15.2% in 2007.
Increasing rice production
An overview of rice’s wholesale price
The wholesale price of rice is dependent on specific factors related to the environment, rice production, stock level, and customer demand. Therefore, it keeps changing from time to time.
Wholesale rice price’s characteristics
The wholesale price range of rice has fluctuated in different periods of time and in different regions. In the early 1960s, a falling trend was recorded in rice’s wholesale price. However, during the global financial crisis in 2008, the price of rice for wholesale increased three times as much as the average price, before falling back to normal.
Currently, wholesale rice costs U.S $300-500 per MT in major countries producing rice. In the African market, the price range varies from $500 to $700 per metric ton, while it costs $600 per metric ton of wholesale rice in Japan and Korea.
Characteristics of wholesale rice price
Due to the fluctuation in the wholesale rice price, many international price quotations have been established. The Food and Agriculture Organization of the United Nations (FAO) has designated India and Thailand as the countries with the most important interventions in the global rice price formation process. The Thai 5 % broken export price is commonly used to represent the market.
Factors influencing rice’s wholesale price
Variations in the wholesale price of rice can be explained by some specific reasons such as natural elements, supply and demand factors.
Factors influencing rice’s wholesale price
- Natural elements
Natural factors including floods, drought, and other natural disasters, strongly affect the range of rice’s wholesale price. Rice cultivation partially depends on the soil, temperature, and climatic conditions. A good climate will lead to large rice production; therefore, the wholesale price will be more reasonable than in the case of a bad climate. For example, in Bangladesh, wholesale rice price changes frequently by season. In May, June, July, and August, rice can be sold at a high price because of floods.
- Decrease in the growth rate of rice production
Many countries have experienced a falling trend in the growth rate of rice for 15 years. For example, the yield growth rate of South Asia in 1970-1990 was 2.14%/year, and then, it declined to 1.4%/year during 1990-2005. Moreover, as the largest rice basket in the world, the falling rice production of Asia resulted in the contraction of the global rice growth rate, less than 2% per annum. This fact has significantly affected the wholesale price of rice.
- Drop in the stock level
In recent years, rice stocks have reached their lowest point since the 1980s, particularly, during 2001-2004. China and India are responsible for this drop in stock level because of stock depletion in these two countries. As a result, the price of rice for wholesale rises substantially.
- Demand growth
Population growth results in the increasing total demand for rice. For example, in Africa, due to the growing need of rice, the imports of this staple food there account for one-third of world trade. African rice imports are mainly from Asia.
Read more: An update of jasmine rice wholesale price
Wholesale rice price comparison
The following is the table of price comparisons among popular wholesale rice around the globe based on statistics conducted by The Food and Agriculture Organization of the United Nations (FAO) in 2020 and 2021.
Generally, during one year, from July 2020 to July 2021, a slight decrease was recorded in the wholesale price of aromatic rice, Indica rice, Japonica rice, and glutinous rice.
Wholesale rice price comparison
| Rice
|
2020
(USD/MT) |
2021
(USD/MT) |
|
| Aromatic rice | Cambodia fragrant 5% | 907.2 | 717 |
| Thai fragrant | 1049 | 717.8 | |
| Viet fragrant 5% | 481.8 | 496 | |
| India Pusa basmati | 995 | 1125 | |
| Pakistan basmati | 986 | 729 | |
| Indica rice | India 5% | 396 | 385 |
| Pakistan 5% | 431 | 388,8 | |
| Thai 100% B White | 496.3 | 433.8 | |
| Viet 5% | 427 | 395 | |
| Argentina 5% | 506 | 540 | |
| Japonica rice | U.S. medium grain | 960 | 1100 |
| Glutinous rice | Thai glutinous 10% | 1111 | 650.6 |
| Viet glutinous 10% | 550.8 | 429.6 | |
Popular rice types for wholesale
Rice is considered the most important food, not just in Asia but also in Africa, the USA, and the EU. Generally, there are four main types of rice favored over the world.
Aromatic rice
Aromatic rice is one of the top-quality products, which possesses a distinctive fragrance.
Origin: Thailand, Cambodia, Laos, Vietnam, and Africa
Characteristics:
- Medium to long grains, white color
- The pleasant aroma of rice is from the presence of 2-acetyl-1-pyrroline.
- When cooked, the texture is less sticky than glutinous rice, the flavor is nutty
Aromatic rice
Varieties: Jasmine and basmati rice for wholesale are the most famous varieties. Some other aromatic rice varieties are Ambemohar, Sona Masuri, Texmati, etc.
Distribution areas: Philippines, Cuba, Malaysia, Saudi Arabia, EU, Kuwait, Union of Arab Emirates, USA, Singapore, etc.
Indica rice
Indica rice is a representative rice type, which is cultivated in tropical and subtropical areas.
Origin: India, Pakistan, Vietnam, Thailand, Philippines, Pakistan, central and southern China, Java, Sri Lanka, Indonesia, and other African countries.
Indica rice
Characteristics:
- Grain: long or short, slender, flat
- It cooks up dry and flake
- Easily to shatter
- Low yielding
- High amylose content: 23-31%
Japonica rice
Japonica is grown in the cool zones of subtropical areas and in the temperate zones.
Origin: East Asia, Central China, Vietnam, Japan, Korea.
Japonica rice
Characteristics:
- Round and short grains, white color
- Sticky and moist when cooked
- Low in amylose: 0-20%
- High yielding
Varieties: Japonica brown rice, Akita Komachi and Koshihikari are favored in Japan
Distribution areas: Solomon Islands, Cambodia, Saudi Arabia, etc.
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