World Rice Market Research Articles

New Dynamics in the World Rice Market

In the last four decades of the 20th century, the world rice market was highly unstable, with price volatility greater than that on world wheat and maize markets. In the 21st century, however, new dynamics (a thicker world rice market, more irrigation, milder export restrictions) have contributed to a reduction in price volatility that is now lower than that on world wheat and maize markets. In addition, the El Niño events that are responsible for many shocks to the world rice market are largely predictable several months in advance. The reduced volatility on the world rice market and the predictability of El Niño events make it easier to use international trade as an instrument for food security. The recent experience with rice trade liberalization by Asian rice importers has been largely positive, helping to improve food security and the affordability of healthy diets, with little impact on domestic price volatility.

THE EFFECT OF EXPORT OF RICE ON THE ECONOMY OF INDIA

THE EFFECT OF EXPORT OF RICE ON THE ECONOMY OF INDIA

Back in the Soup: Now What?

This article for AJAD presents the outlook for the world rice market as of early September 2023. It builds on my AJAD article from a year ago (Timmer 2022) and on multiple articles in the East Asia Forum (see Editorial Board, ANU 2023a, b). A year ago, the world was facing a severe food crisis. All the ingredients for significant shortages of food grains and vegetable oils were already boiling. An article in this journal at the time asked how to manage such a crisis (Timmer 2022). The answer was a series of steps designed to build confidence in the availability of supplies. Leadership was sought from Indonesia, chair of the G20 in 2022, and soon to be chair of ASEAN. Indonesia delivered (Editorial Board, ANU 2023a). World food markets remained relatively calm, rice prices actually declined for several months, and the world’s consumers breathed a bit easier. But the breathing space was short-lived. A combination of factors, especially the rampedup attacks by Russia on Ukrainian food export infrastructure and the emergence of a vigorous El Niño in Asian rice bowls, has led to renewed concerns about an impending food crisis. This time the focus is on rice, rather than wheat, maize, and vegetable oils. But rice is increasingly the “food of the poor” in Asia and in Africa (Timmer 2013). A spike in rice prices will cause widespread hunger.

Competitiveness among Asian Exporters in the World Rice Market.

With the gradual reduction in trade barriers led by the process of globalisation, more emphasis is now being placed on promoting export competitiveness. Asia is the home of many of the world’s top rice exporters. The food-price crisis has divided Asia into “rice haves” and “rice have-nots”. In order to describe the processes involved in securing and maintaining international competitiveness in rice exports, the present study has used the Balassa and White indices of revealed comparative advantage and revealed competitive advantage respectively. Results have revealed that Pakistan is the most competitive country in rice trade and ranks first in both agricultural product trade and total merchandise exports. JEL classification: C12, C43, Q17 Keywords: Asian Countries, Competitiveness, Revealed Comparative Advantage, Revealed Competitive Advantage.

The Impact of Oil Price Shock on Rice Prices in Asean Area: A Framework

The conditions of the world rice market and the domestic rice market are unstable markets and are heavily influenced by external factors. There are many factors that can affect the price of unhulled rice and rice at the farm level, one of which is the effect of the integration of world and domestic rice markets. Thus the events or shocks that occur on the world market will affect the conditions of the domestic rice market. External factors affecting rice trade include petroleum. Oil as one of the factors influencing changes in the demand and supply of various traded commodities because of its vital role. Oil price fluctuations are often used as a benchmark for the stability of world trade conditions.Research specifically on the impact of rice was carried out by Chintia (2013) which states that oil price shocks cause domestic rice prices to have a fluctuating pattern and have an increasing trend, but domestic rice prices always fluctuate on trend. An attractive characteristic of the domestic rice price is that it is always above the world rice price. This occurs because rice is a commodity that has many interventions by the government in maintaining domestic rice price stability and maintaining the purchasing power of the public as consumers and farmers as producers. In the short term, the domestic rice price is influenced by the domestic rice price itself, the imported rice price, and the world crude oil price. In the long run, the domestic rice price is influenced by world rice prices, imported rice prices, and rice production. This paper will discuss the framework for the impact of oil shocks on rice prices in the ASEAN region. This framework is the basis for the stages in conducting further research Keywords: Impact, Rice, oll price, Rice, ASEAN

Rice policy in a transitional economy: balancing the social and political objectives

Rice is an important component on the global food security agenda. However, prevailing economic analysis suggests that rice policy globally is often damaging and not economically efficient, rendering food security as a goal highly vulnerable to volatility in the world rice market. This paper explores the case of Vietnam’s rice policy as a key rice exporter, a country that has developed highly distinctive policy settings to manage the inherent tensions between ‘socialist’ policy legacies and ‘market-based’ objectives during an economy-wide liberalisation process. In open economy political terms, our case study facilitates the exploration of two key issues. First, how well the OECD-centric concept of agricultural policy exceptionalism works in a developing country context. Second, how the policy may succeed politically even in the face of what appear to be severe political constraints from external economic pressures. The paper develops a narrative of the political economy of rice policy in Vietnam during the Renovation (Doi Moi) Period from 1986 to the present. We find, first, that the policy trajectory in Vietnam’s rice sector runs counter to recent claims about post-exceptionalism in agriculture; that is, rice policy has resisted pressures to comply fully with market rules despite Vietnam’s accession to the World Trade Organization. Second, the interaction of economic liberalisation processes and the ruling Communist Party’s political survival strategy results in policy settings that fail standards of policy coherence and are often economically inefficient, although the survival strategy itself remains stable and reform-resistant over time.

Market integration and spatial price transmission in grain markets of Turkey

ABSTRACTThis paper examines whether the grain market of Turkey is cointegrated with the world grain market. Using an error correction model, we analyse the response of producer prices of wheat, barley, maize, soybean and rice to changes in world market prices. Results show that the rice market of Turkey is not cointegrated with the world rice market, while the other commodity markets are weakly cointegrated. Results also show that pass-through of changes in the world prices to the domestic prices is relatively low both in the short run and in the long run, and that adjustment to the new equilibrium following a shock is slow. Government intervention policies both at the border and as domestic price supports seem to be underlying causes of the weak cointegration. Fewer protectionist policies and lower levels of government intervention are necessary to increase the domestic grain market integration with the international grain market.

Financialization of Rice in Vietnam: Lessons from the Coffee Market

While rice trading gave birth to derivative finance in 17th century Japan, the rice market is globally unfinancialized and seems to stand as an anomaly within commodity trade. The Vietnamese industry is not an exception within the world rice market; it is presently deprived of derivative trading. Coffee, another major Vietnamese agricultural industry developed within a financialized framework, with the existence of Over-The-Counter (OTC) contracts traded locally, governmental attempts to set up local futures contracts and international futures markets in London and New York. In this context, I review the lessons that the Vietnamese rice industry can draw from its coffee industry counterpart regarding the prospect of financialization. I find that while the failures of the financialization process in coffee are likely to be repeated in rice, its successes will be more difficult to replicate.

The Contribution of Agricultural Investments to Food Loss and the World Rice Market in Asian Countries

The Contribution of Agricultural Investments to Food Loss and the World Rice Market in Asian Countries

Estimation of Hidden Demand and Its Impact on the World Rice Market

Estimation of Hidden Demand and Its Impact on the World Rice Market

KETAHANAN PANGAN PADA ERA GLOBALISASI DAN OTONOMISASI

Food security deals with food availability, accesscibility and stability. Food availability can be from domestic production and import. Although the production of cereals in developing countries almost equal to the production in developed countries, the much greater population of almost 79 % of the world population, the self sufficiency rate of cereals in developing countries is only 91% and to be net importer, while the self sufficiency rate of the developed countries, are more than 100 % (108 %). There are some exception for several developing countries to be big rice exporters such like Thailand, Vietnam, India, China and Pakistan.Cereal staple foods in developing countries is dominated by rice especially in East and South Asia, includes Indonesia. International rice market is characterized with oligopolistic since only six big exporting countries supllying the international rice market.After experiencing rice self sufficiency in 1984 – 1994 Indonesia have been net rice importer again, even in 1998 21% of marketed rice ini the world market were imported by Indonesia. There should be a policy to increase production to a certain rate of rice self sufficiency that will not influence the world rice market equilibrium.The food accessibility depend closely on the wider economic condition such as income distribution, poverty and unemployment, Government intervention is needed toreduce instability including to protect from the international market instability by flexible tariff. Stabilizing the seasional price fluctuation by floor price and ceiling price policy combined with buffer-stock policy had been successful. However, there should be a modified policy toward more liberized without import monopoly

Linkage between Rural Voters and Politicians: Effects on Rice Policies in the Philippines and Thailand

AbstractThis article explains how linkages between politicians and rural voters affected the design of agricultural policies, using rice in two countries as examples. In the Philippines, colonial history bolstered an oligarchy of landed elite politicians, whose power was restored after the dictatorship of Marcos ended in 1986. Their practice of patronage brought corruption that led to dwindling rice productivity and increasing import dependence while displacing the political necessity to offer price support to farmers. In Thailand, sociopolitical development was more centralized, with new electoral rules introduced in 1997 to weaken locally confined patronage arrangements. Mass parties competing on a policy platform were favoured instead, resulting in increasing, but eventually, excessive subsidies for rice farmers. Although voter–politician linkages resulted in different rice policies in the two countries, recent instability in the world rice market showed that strategies with greater sustainability considerations are needed in addressing domestic income disparities and global food insecurity.

RICE EXPORT FROM INDIA: TRENDS, PROBLEMS AND PROSPECTS

In India, agriculture is the main occupation. About 58 per cent of the population depends upon agriculture. It is the backbone of the Indian economy. In agriculture, rice is one of the most important food crops of India. It feeds more than 50 per cent of the world’s population. Rice is continues to play vital role in the national exports. India is one of the important countries in the world in export of rice. Indian rice exports are reached first place in the world markets. This study has analysed the trends and variability of rice export, assess the prospects of rice export and the various problems/constraints of rice export from India to various countries in the world. The study based on secondary data. The time series data on export of rice from India for the period 2001-02 to 2013-14.This paper indicates that there is good market for some Indian rice varieties, especially basmati rice in the world market. Pakistani basmati, as a sole competitor of India, does not have the unique aroma and taste as the Indian varieties. During 2012-13 the foreign earning from basmati rice has increased considerably. Despite considerable area being under rice cultivation in the country, the share of India in world rice export is very low which can be attributed to the fact that the average productivity of rice in the country is low and even in some rice producing states, the productivity is 40 to 50 per cent lower than the national average, in spite of having good potential capacity. The reasons of low productivity of rice in the country may be due to use of less quantity of chemical fertilizers, pesticides, more area under traditional varieties and more dependence on rain. If we want to increase our exports share in the world rice market, the production growth rate should be adequate surplus in the country. This requires careful analysis of low productivity of rice in the country. Besides, more important, the critical analysis is necessary to enquire into the constraints involved in rice export from India.

RICE EXPORT FROM INDIA: TRENDS, PROBLEMS AND PROSPECTS

In India, agriculture is the main occupation. About 58 per cent of the population depends upon agriculture. It is the backbone of the Indian economy. In agriculture, rice is one of the most important food crops of India. It feeds more than 50 per cent of the world’s population. Rice is continues to play vital role in the national exports. India is one of the important countries in the world in export of rice. Indian rice exports are reached first place in the world markets. This study has analysed the trends and variability of rice export, assess the prospects of rice export and the various problems/constraints of rice export from India to various countries in the world. The study based on secondary data. The time series data on export of rice from India for the period 2001-02 to 2013-14.This paper indicates that there is good market for some Indian rice varieties, especially basmati rice in the world market. Pakistani basmati, as a sole competitor of India, does not have the unique aroma and taste as the Indian varieties. During 2012-13 the foreign earning from basmati rice has increased considerably. Despite considerable area being under rice cultivation in the country, the share of India in world rice export is very low which can be attributed to the fact that the average productivity of rice in the country is low and even in some rice producing states, the productivity is 40 to 50 per cent lower than the national average, in spite of having good potential capacity. The reasons of low productivity of rice in the country may be due to use of less quantity of chemical fertilizers, pesticides, more area under traditional varieties and more dependence on rain. If we want to increase our exports share in the world rice market, the production growth rate should be adequate surplus in the country. This requires careful analysis of low productivity of rice in the country. Besides, more important, the critical analysis is necessary to enquire into the constraints involved in rice export from India.

International Trade and Risk Sharing in the Global Rice Market: The Impact of Foreign and Domestic Supply Shocks

In the first decade of this millennium, rising food prices returned as a concern for policy makers, especially in developing economies. This paper examines how supply shocks, both domestic and foreign, impacted imports and consumption in the world rice market between 1960 and 2010. Such an investigation is important in assessing the role of trade in compensating for domestic shocks. If shortages lead economies to impose trade restrictions, then trade may not be allowed to play an important role in stabilizing consumption. The existing literature has highlighted the importance of these policy shocks in the world rice market and how they have worked to increase the volatility of prices and trade flows. Although trade cannot be expected to play a strong role when the major producing and consuming economies are simultaneously hit by negative yield shocks, such a scenario has occurred in only about 3% of all observed cases. We also find that consumption fails to stabilize even when domestic shocks are negative and foreign shocks are positive; however, imports do peak. Thus, while trade does help in coping with domestic risks, it is unable to achieve full risk sharing. Therefore, no matter the nature of foreign shocks, the principal concern is to stabilize consumption when an economy is hit by negative domestic yield shocks. The frequency of such shocks is about 12% in all observed cases, highlighting the importance of domestic responses. We find that domestic rice stocks have been important in stabilizing consumption. The reliance on domestic policies has, in turn, kept the rice market thin.

農業投資が食料ロスおよび国際コメ需給に与える影響

農業投資が食料ロスおよび国際コメ需給に与える影響

Transmission of Rice Prices from Thailand into West African Markets: The Case of Benin, Mali, and Senegal

ABSTRACTThe integration of West African rice market to the world market is assessed in order to derive the implication for food security. To this end, the transmission of rice price changes on the world market to selected markets in West Africa was examined to test for the presence of transaction costs. Using the two-regime threshold cointegration procedure on monthly price data, evidence in support of the hypothesis of asymmetric price transmission was found between Thailand and some West African markets. Price increases on the world market were more quickly transmitted to domestic price than were price decreases in Benin and Mali, suggesting short-run dynamic inefficiencies and the presence of transaction costs. In Senegal, the adjustment was linear, suggesting greater integration with the world rice market. The results suggest that West African governments should design and implement adequate policies to develop the domestic rice sector, improve market infrastructures in order to reduce their country dependency to international markets and ensure food security.

Price relations between international rice markets

International rice markets are seen as volatile due to the thin nature of the market which is believed to be exacerbated by a low level of substitution between major rice export markets. In other words, this perceived lack of price transmission amongst international rice markets is believed to further thin out an already thin world rice market. The paper tests for price transmission between five major rice exporting markets representing Asia and the Americas over the past decade. It uses a vector autoregressive framework and performs Granger and Toda-Yamamoto causality tests and generalized impulse response functions to interpret the model’s results. The findings suggest that price transmission exists across these major rice export markets with price relations being the most widespread between Asian markets. Furthermore, the direction of price transmission suggests that Asian prices act as price leaders for North and South American prices. While it is not clear whether there is a price leader amongst the Asian export markets, Vietnam has the most extensive price relations with other export markets which would suggest that the Vietnamese rice export price is a more suitable world reference price than the Thai export price. An implication of the presence of price relations between rice export markets is that the world rice market is not as fragmented as generally perceived in the literature. However, it can also explain why international rice prices are so sensitive to the volatile trading behavior of major markets.

International Trade and Risk Sharing in the Global Rice Market: The Impact of Foreign and Domestic Supply Shocks

In recent years, rising food prices have returned as a concern for policy makers especially in developing countries. In this context, this paper examines how supply shocks, both domestic and foreign, have mattered to imports and consumption in the global rice market over 1960-2010. Such an investigation is important in assessing the role of trade in compensating for domestic shocks. If shortages lead countries to impose trade restrictions, then trade may not be allowed to play an important role in stabilizing consumption. The existing literature has highlighted the importance of these policy shocks in the world rice market and how they have worked to increase the volatility of prices and trade flows. Although trade cannot be expected to play a strong role when the major producing and consuming countries are simultaneously hit by negative yield shocks, such a scenario obtains in only 3% of cases. However, we also find that consumption fails to be stabilized even when domestic shocks are negative and foreign shocks are positive; but imports do peak. Thus, while trade does help in coping with domestic risks, it is unable to achieve full risk sharing. Therefore, no matter what are the foreign shocks, the principal concern is to stabilize consumption when hit by negative domestic yield shocks. The frequency of such shocks is about 12%. This brings into play domestic responses, and we find that domestic stocks have been important in stabilizing consumption. The reliance on domestic policies has in turn kept the rice market thin.

Quality, Quantity, and Nutritional Impacts of Rice Price Changes in Vietnam

Summary Asian governments intervene in the world rice market to protect domestic consumers. Whether consumers are nutritionally vulnerable depends on the elasticity of calories with respect to rice prices. Common demand models applied to household survey and market price data ignore quality substitution and force all adjustment onto the quantity (calorie) margin. This paper uses data from Vietnam on market prices, food quantity and quality. A 10% increase in the relative price of rice reduces household calorie consumption by less than 2% but this elasticity would be wrongly estimated to be more than twice as large if quality substitution is ignored.