Iraq is a key Middle Eastern rice importer and is the only country in the region to source substantial quantities from both Asian and Western Hemisphere suppliers. However, this year, Iraq has purchased nearly all of its rice from India, which has more than an 80 percent market share as of August.
While Iraq has been able to import almost 700,000 tons thus far, its 2020 imports have been stalled significantly due to a struggling economy amid low oil prices. With overall lower imports, tight competition in the marketplace has allowed India to prevail as the largest rice exporter to Iraq.
The majority of Iraq’s imports from India are basmati, a popular fragrant rice which is similar to the locally grown rice, ambar. The remaining purchases of rice are generally long grain milled white rice, with a smaller amount of purchases being medium grain milled white rice. With basmati rice being more popular, Iraq’s imports of Indian basmati rice have risen from less than 20,000 tons a decade ago to more than half a million this year. You can find more information Best in Nashik.
Although basmati prices are significantly higher than white rice, the gap between basmati prices and white rice prices have narrowed this year. As basmati prices become relatively less expensive and consumers continue to prefer the taste of fragrant rice, the private sector has been able to sustain these imports.
In addition to basmati from India, Iraq also imports jasmine from Vietnam to fulfill its fragrant rice demand. However, with Vietnam’s ban on rice exports earlier this year, India has been able to gain and hold Vietnam’s lost market share.
Meanwhile, white rice that is allocated through the public distribution system has been delayed this year because of budget complications. Iraq imported a small amount of white rice from Thailand as prices have been significantly less than the Western Hemisphere suppliers. While South American countries such as Uruguay and Argentina typically have a portion of Iraq’s white rice market, tight supplies and higher prices have confined their trade largely to the Western Hemisphere.
The United States has typically supplied about 100-150,000 tons annually but has yet to sell to Iraq this calendar year amid tight supplies. With a larger crop this autumn and potential new sources of financing for Iraq, U.S. exporters are aiming to see Iraq purchase U.S. rice soon.
However, with fewer government purchases and more private sector buying, Iraq is projected to continue relying heavily on India to supply the market.
China Expands Its Reach in the Medium Grain Market
Over the past 3 years, China has seized the medium and short grain global rice market with expanding low-priced exports. Historically, the United States has been the top medium and short grain exporter, with the European Union, Australia, and China supplying smaller shares of the market. Most rice traded internationally is long grain, but markets around the Mediterranean region and East Asia tend to import relatively more medium and short grain rice.
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However, since 2017, China exports have risen sharply with sales from its abundant inventory of low quality stocks. China medium grain milled export prices fell by one-half between 2016 and 2017 and continue to trend downward in 2020. China exports remain high largely because of low prices in comparison with other suppliers.
For most of the past decade, China exported primarily to East Asian markets: North Korea, South Korea, and Japan. Since emerging as the world’s largest medium and short grain exporter, though, China exports have reached vastly different markets, extending its geographic reach considerably. The largest China rice markets in 2020 are Egypt, South Korea, Sierra Leone, and Papua New Guinea. While South Korea represents one of the core markets, the others represent new regions where China is growing its market share.
China exports are reaching new markets within the Mediterranean such as Egypt. After the Egyptian government limited rice planting area in 2018, the crop fell by more than a one-third and it turned to the global market to offset the shortfall. China thus expanded into the Mediterranean region and Egypt became its largest market.
To meet domestic demand, Egypt imported nearly 450,000 tons of medium and short grain rice from China in 2019 and more than 250,000 tons so far this year. Other markets where China has expanded within the Mediterranean include Turkey, Libya, and Lebanon.
Surprisingly in 2017, China began exporting low-priced medium grain to several markets in Sub-Saharan Africa, which had not traditionally been a major market. Exports are sent to a variety of markets in Africa with Sierra Leone being the largest this year. The African markets account for nearly one-third of China medium grain exports.
A relative absence of Australia in the market has enabled China to supply markets in Oceania, including Papua New Guinea. In previous years, Papua New Guinea would import from the United States when Australia experienced production shortfalls, but recently it has turned to China instead based on low price and close proximity.
Turkey Rice Trade Revisions
This month includes a multi-year revision based on updated trade data from 2013 to present that more closely aligns Turkey imports with what the exporters report as trade to the country. The series now follows the Turkey General Trade System data that includes trade entering and exiting customs warehouses and free trade zones, which were previously excluded.
A large portion of Turkey’s rice imports have been paddy that has been imported and then milled, often in the free trade zones. With this new data, Turkey’s rice exports are also increased to show where those milled exports were destined. The charts below show the import and exports as reported last month compared to the current estimates.
While this revision increases both imports and exports for Turkey, the impact on the net imports (total imports minus total exports) is relatively minimal. This additional data provides more comprehensive accounting of the imports across several of its trading partners, including Iraq, Syria, Libya, and Lebanon.