Although rice is an American staple, as common as chicken soup or apple pie, we rarely think about where it comes from or what it took to get it to our plates. After wheat, rice is the world’s most consumed grain. That makes the exportation of rice big business, with growers in Southeast Asia dominating the industry. Although the market has fluctuated, the top five exporters of rice in the world continue to reside in that region of the globe.
5 United States
Rounding out the list at No. 5 is the United States, with a total rice shipment of 3.8 million tons for the period. Although America is a large exporter of rice to other parts of the world, it may lose its leader status as farmers continue to reduce acreage devoted to rice cultivation in favor of other staples. This is because profits from growing rice are less than that for corn or wheat. Although trade insiders believe the price of rice will continue to increase, this may not be enough for American farmers to increase their cultivation numbers if the profit margins don’t also rise by significant percentages.
With a total rice shipment of 4.1 million tons for the period, Pakistan comes in at No. 4 on our list. Like Vietnam, Pakistan has not only been able to keep costs low while maintaining diverse inventory, it has also begun to muscle in on India’s customer base in both Eastern and Western Africa. Unfortunately, this is not likely to be enough to move Pakistan up the list in coming years. This is because Pakistan lost its foothold in the Chinese market as a result of low quality exports to the region and higher prices, causing China to seek rice products from Vietnam instead.
Falling to third place is Thailand. This was a hard fall considering the country has held the top slot for three decades. Exporting 7.1 million tons over the reporting period–a drop of more than 35 percent from previous years–Thailand no longer ships the highest volume of rice worldwide. The weaker showing is blamed on a new government program, referred to as the paddy pledging scheme by the Thai Rice Exporters Association. Under the program, the government has agreed to buy unshucked white rice from farmers at a fixed price that is 50 percent more than the market price. While this move is good for farmers, it has caused a drastic drop in rice exportation, placing the price of Thai rice $100 to $200 per ton higher than its competition in the international marketplace.
India may not hold onto its No. 1 position for long. Vietnam is moving up fast due to its ability to export rice at a much cheaper cost. With a total rice shipment of 7.7 million tons for the same period, the country lands firmly at No. 2 on our top exporters list. Along with Pakistan and Myanmar, Vietnam is cutting into India’s share of the West African and East African markets. Changes in India–local transportation costs, higher government support prices paid to farmers and a stronger rupee currency–have caused the country’s export costs to increase from $27.5 to $55.1 per ton, and the price is likely to keep rising. With these trends, Vietnam may land at No. 1 sooner rather than later.
While India is not new to the world’s top rice exporters list, it is new to the No. 1 slot. This position is typically held by Thailand. However, according to a recent report from the U.S. Department of Agriculture, India stole the prized position from its fiercest competitor when its total world exports for 2012 reached 10.7 million tons. This astounding showing is the result of record shipments and large supplies. As a result of India’s increased shipment numbers, the USDA revised its global trade forecast upward by 2 million tons to reach a record 41.5 million tons, with India accounting for a majority of the upward increase in rice exports. These supply and demand estimates provide government policy makers with a better understanding of the market’s strengths and weaknesses and enables industry power brokers to base their marketing and investment decisions on the latest information.