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Consulate General of India

Commercial Section
JED/COM/201/7/2006

A Market Report on Rice in the Kingdom of Saudi Arabia

MARKET OVERVIEW

Rice is the most important staple food for about one-half of the world population and
provides over 20 percent of the global calorie intake. As most of the rice produced is consumed
domestically, only 4% of global production is internationally traded. The world rice market is also
featured by a high degree of concentration with Asia accounting for nearly 90% of global
production and consumption. The market for rice in the Kingdom of Saudi Arabia is geared to
trading of imported varieties of rice, while little efforts have been made to grow locally as climatic
conditions in Saudi Arabia are generally unsuitable for this crop. In quantity terms, the overall
domestic market demand for all types of rice in Saudi Arabia reached 787,000 tones in 1999.
Meanwhile, Food and Agricultural Organization (FAO) projected import for rice by Saudi Arabia
could reach 1,342,000 tones in 2005, suggesting a yearly compound growth rate of 11.3% in the
five year period. In value terms, the overall market value for all types of rice in the Kingdom of
Saudi Arabia was estimated at SR 2,500 million in 1999, slightly more than three times its market
size of SR 750 million and 250,345 tones in 1989. With a high population growth rate along with a
rapidly expanding number of pilgrims, Saudi Arabia’s aggregate consumption of rice was growing
at a yearly compound rate of 12.1% since 1989. In the last decade, total rice consumption in the
Kingdom of Saudi Arabia grew at a much faster rate than the population growth, expanded by 3.1
folds compared to 1.56 times of population growth. During the same period, the corresponding per
capita consumption of milled rice was doubled and rose from a yearly 17.86 kg per person in 1989
to 35.90 kg per person in 1999. Preliminary estimates suggest that the per capita rice consumption
in the Kingdom of Saudi Arabia would likely to remain at around 35.5 kg during 2006-2007.
However, due to rise in number of pilgrims for Haj and Umra, According to FAO the per capita
consumption of rice in the Kingdom of Saudi Arabia at about 47 kg in 2005.
INTERNATIONAL TRADE

According to international trade data, rice exports reached at 368,601 tonne (20,186 tonne
basmati and 348,415 tonne non-basmati) in July 2005, and 452,022 tonne (91,161 tonne basmati
360,861 tonne non-basmati) in August 2005, taking January-August 2005 exports to around 3.8
million tonne.

Figure 1: Bar diagram showing global production and carrying of rice from 1990-91 to 2006-07 10

Figure 2: Bar diagram showing global production of milled rice from 1992 to 2007 10

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Figure 3: Composite bar diagram showing major rice importing countries during years 2005, 2006 and 2007 10

INTERNATIONAL RICE TRADE

International rice market is skewed compared to its production. In the 1998-99 crop year,
global imports of milled-rice was stood at 21 million tones. Asian countries are the most important
importers of rice, accounting for about 49% of the total global exports of rice. Within Asia,
countries in the Near-East are likely to remain major growth markets, with imports expected to be
sustained by economic recovery. In Saudi Arabia, the demand is likely to grow with the rise of
immigrant workforce from other Asian rice eating countries and pilgrims coming for Haj and
Umra. On the supplier’s side, milled rice exports from both Thailand and Vietnam are projected to
rise in the coming years. Although Thailand would remain the leading rice supplier, it is expected
to lose out in terms of market share in favor of Vietnam. Increased sales from Pakistan, Myanmar
and Cambodia are expected to rise. In contrast, both India and the United States might export less,
while remaining important players in the global market.

GLOBAL PRODUCTION AND CONSUMPTION OF PADDY RICE

According to Food and Agriculture Organization (FAO), the global production of paddy-
rice was 566 million tones during the 1999-2000 crop year, an increase of 1.4% over the previous
crop year. However, global production of milled rice (ready for cooking) excluding husk was
reached about 424 million tones in the 1998-99 crop year, compared with 363.3 million tones in
the 1993-1995 crop year, and climbed to 422 million tones in the 2004-05 crop year. Mainland
China, the world largest producer of rice, accounted for nearly 36% of the total global production,
followed by India around (21%), Indonesia (9%), Bangladesh (5.5%), and Thailand (4%). These
countries together accounted for about 75.5% of the total paddy-rice consist of Japan, the United
States, Pakistan, Burma, Brazil and South Korea. They together accounted for nearly 12% (67

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million tones) in the 1998-99 crop year compared with 10.7% (55.5 million tones) of global
production in the 1990-91 crop year.

World demand for milled rice rose by 1.3% to 422 million tones annually during 1999-
2005, down from 1.9% annual growth during 1984-1994. The projected growth in milled rice
consumption goes in line with the population growth, which implies that global consumption of
rice is expected to remain constant at around 59 Kg per head in the next five years (2005-2010).

INTERNATIONAL PRICES OF RICE

International prices of rice are generally quoted in US dollars on FOB basis either form the
US at New Orleans, India, Thailand (Bangkok), and Myanmar. Price movements vary depending
on rice types and/or grades. In general, given the tightness in the projected demand-supply balance
and the relatively small proportion of rice internationally traded, international market prices of rice
are expected to be quite sensitive to demand and/or supply shocks that could lead to considerable
volatility. The international price of US rice bottomed at $361.15 per metric on in 1993 and peaked
at $463.97 per metric ton in 1996. In contrast, the international price of low quality rice of Thai
origin (Bangkok) declined by 23.3% to $191.0 per metric ton in July 2000 from $248.97 per metric
ton in 1999. While examining the gap between the international prices of milled rice quoted at
New Orleans and Bangkok marketplaces and the prices of high quality Basmati and rice of other
quality imported into Saudi Arabia, the difference varies between 80 to more than 100 per cent in
the recent years. Therefore, Saudi imports prices of rice have been generally found substantially
higher than those quoted in the international rice markets.

Import Pattern of Major Markets

Saudi Arabia Liner / Containers / Break Bulk L/C, CAD Buyers Brand Small packs

Kuwait Containers L/C Buyers Brand Small packs

U.K Containers CAD Brown Basmati 50kg Pkg

U.A.E Linear/Containers CAD/LC Buyer Brand 50kg Pkg

Figure 4: Showing Import pattern of rice in the major international markets 7

PRICES AND BRANDS IN INTERNATIONAL MARKET

An increasing palate for exotic flavors among Americans and the growing South Asian
population in the Middle East is driving up the demand for Basmati rice. As a result, existing
brands are slashing prices and vying with newer entrants in an effort to reach out to both the South
Asian and mainstream consumers.

Rice Company, Tilda Ltd., maker of the popular Basmati rice brand “Tilda brand is priced
higher because the rice is grown for a longer time in the rice fields. Tilda imports Basmati rice
from India. A kilogram of Tilda rice in a popular supermarket is costing about SR 7 and five kilo
bag being sold at SR 27.

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The drop is also more than 8% lower than the 2002 record of 27.8 million tonnes. A decline
in imports by several major buyers primarily the Philippines, sub-Saharan Africa, Bangladesh,
Saudi Arabia, and Indonesia is the major factor pulling global rice trade down in 2006. These
reductions are partially offset by increased imports by Brazil, Iraq, and South Korea.

SAUDI RICE MARKET

The market for rice in Saudi Arabia is large and expanding. Saudi Arabia does not produce
rice domestically, and relies entirely on imports to meet its growing demand. The market is
extremely competitive, but opportunities do exist to increase the Indian market share.

Indian rice is a dominant player of the Saudi rice market. Other suppliers of rice include
Pakistan, Thailand, USA and Australia. Saudi importers have begun to import bulk rice both for
domestic market and re-export to Africa and other Arab countries. India still can enhance its share
in the Saudi rice market.

Quality Price ($)


1. Basmati Sella Rice 1121 Golden : USD 820 PMT
2. Basmati Sella Rice Creamy : USD 725 PMT
3. Pusa Basmati Sella Rice Creamy : USD 680 PMT
4. Sharbati Sella Rice Creamy : USD 475 MPT
5. PR -106 Sella Rice Creamy : USD 360 PMT
6. PR -11 Sella Rice Creamy : USD 425 PMT
7. Basmati Raw Rice : USD 780 PMT
8. Basmati Pusa Raw Rice : USD 760 PMT

Figure 5: Table showing quality of Indian rice and its import price in the current crop season

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Raw Basmati Silky Basmati Golden Parboiled Basmati

Broken Rice Basmati Rice

Figure 6: Pictures showing various types of Indian Basmati rice

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SAUDI ARABIAN STANDARDS ORGANIZATION (SASO)

The Kingdom of Saudi Arabia is the most influential member of the Gulf Cooperation
Council (GCC), which includes five other countries in the Arabian Peninsula- United Arab
Emirates, Kuwait, Bahrain, Oman, and Qatar. As a group, the GCC is striving to create a common
set of food standards, with the Saudi Arabian Standards Organization (SASO) as the lead agency.
SASO is the only Saudi organization responsible for setting national standards for commodities
and products, measurements, testing methods, meteorological symbols and terminology,
commodity definitions, safety measures, and environmental testing, as well as other subjects
approved by the organization’s Board of Directors. While standards are set by SASO, Saudi
Ministry of Commerce and Industry Laboratories does testing of most processed and packaged
food items at various ports of entry. The Saudi Ministry of Municipality and Rural Affairs’
Environmental Control Department tests foodstuffs at the point of sale for product safety
standards.

The Saudi Arabian Standards Organization, set up in 1972 (1392 AH), has responsibility
for determining and enforcing approved standards of services, facilities, utilities and products
within the Kingdom of Saudi Arabia. The Saudi Arabian Standards Organization (SASO) was
established pursuant to the Royal Decree No. M/10 Dated 1392-03-03 as a body of judicial
personality and of an independent budget.

SASO: OBJECTIVES

The Saudi Arabian Standards Organization (SASO), being the sole standardization body in
the Kingdom, is entrusted with all activities relating to standards and measurements which include:

ƒ Formulation and approval of national standards for all commodities and products as well as
standards concerned with metrology, calibration, marking and identification of commodities
and products, methods of sampling, inspection and testing, in addition to other assignments
resolved by SASO Board of Directors.

ƒ Publishing Saudi standards by the most proper means.

ƒ Promoting standardization awareness by publicity and other means and coordinating all
activities relating to standards and measurements in the Kingdom.

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ƒ Setting the rules for granting certificates of conformity and quality mark and regulating their
issuance and use.

ƒ Participating in the Arab, Regional and International Organizations

Kernel Length (mm)


Type Long: Kernel Medium: Kernel Short: Kernel
American More than 6.6 6.2 – 6.6 Less than 6.2
Indian More than 6.0 4.5 – 6.0 Less than 4.5
Thai More than 6.6 6.2 – 6.6 Less than 6.2
Philippines More than 5.9 5.0 – 5.9 Less than 5.0
Other* More than 5.9 5.0 – 5.9 Less than 5.0
* Types of Rice that have no classification made by the original producing countries
Figure 7: Table showing length of rice Kernel standards set by SASO 3

Source: SASO

Grade Broken Foreign Damaged Other Types* Moisture


Grains Matter Grains**
As % (Maximum)
Excellent 5.0 0.5 1.0 10.0 14.0
Grade A 10.0 1.0 2.0 15.0 14.0
Grade B 10.0 2.0 3.0 20.0 14.0
* Other Varieties of Rice different in variety and method of treatments.
** Include heat damage kernel.
Figure 8: Table showing classification of Indian Milled Rice in various grades based on grain quality and
moisture content by SASO 3

Source: SASO

Defects Grade 1 Grade 2 Grade 3


% (Maximum)
Broken Grains 4.0 7.0 15.0
Damaged Grains
(Including yellow and 3 4 5
black grains)
Chalky grains 11 13 15
Red grains 4 6 8
Head damaged grains
* Parboiled Rice 6 8 10
* Milled Rice 3 4 5

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Paddy 0.3 -0.5 0.7
Other rice types
(different varieties and 2.0 4.0 6.0
processing)
Foreign matter 1 15 2
Moisture 14.0 14.0 14.0

Figure 9: Table showing the classification of Indian of Indian rice in various grades according to defects
observed in the rice grains by SASO 3

Source: SASO

SASO: REQUIREMENTS FOR MILLED RICE

The following are the requirements according to SASO shall be met in milled rice.

1) It shall be free from foreign odours.

2) It shall be free from live insects in all their life stages, fungi growth and metal fragments.

3) It shall have the normal colour of milled rice: white, creamy or sometimes light gray.

4) Radioactivity levels in the product shall be according to the limits mentioned in Gulf
Standard, “Radiation Level Permitted in Food Products”.

5) Pesticide residues in the product shall not exceed the limit mentioned in the Gulf Standard,
G.S 382/1994 & G.S 383/1994 “ Maximum limits for pesticides residues in agriculture and
food products part 1 & 2”

6) Mycotoxins in the product shall not exceed the limits stated in the Gulf Standards, G.S
841/1997 “Maximum Limits of Mycotoxins Permitted in food and Animal Feeds –
Aflatoxins”.

7) Talc (magnesium silicate) for polishing rice shall not exceed 0.5oC.

8) In case of enriched rice, the following shall be met:

9) Thiamine content shall not be less than 4.4 ppm and not more than 8.8 ppm.

10) Riboflavin content shall not be less than 2.6 ppm and not more than 5.3 ppm.

11) Niacin content shall notbe less than 35 ppm and not more than 70 ppm.

12) Iron content shall not be less than 29 ppm and not more than 57 ppm.

13) Butylated hydroxytoluen as anti oxidant materials shall not exceed 33 ppm in case of
enriching parboiled rice.

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14) In parboiled rice the percentage of non parboiled rice shall not exceed 0.1% in first and
second grades, and 0.2% in third grade.

15) It shall be classified according to the quality and following shall be observed on classifying
rice:

16) The grade of products shall comply with requirements of country of origin mentioned in
table 1 to 3, in case of classified according to quality in specification of country of origin.

17) The grade of products shall comply with quality requirements mentioned in table 3 in case
of not classified according to quality in specification of country of origin.

18) Percentage of total defects mentioned in tables 1 to 3 shall not exceed 75 % of total
maximum allowance of defects in each grade.

CUSTOM DUTY STRUCTURE

Saudi Arabian Department of Customs has designed its organizational structure in a


manner that enables it to assume its huge responsibilities related to the management of many
departments and customs ports throughout the Kingdom. SADC consists of a headquarters office
located in Riyadh, and 32 seaport, airport, and landport customs.

DESCRIPTION H.S. CODE Item No. DUTY RATE

Rice. . 1006 .

-Rice in the husk (paddy or rough) 10 06 10 00 . Free

-Husked (brown) rice 10 06 20 00 . Free


-Semi milled or wholly milled rice, whether or not
10 06 30 00 . Free
polished or glazed
-Broken rice 10 06 40 00 . Free

Figure 10: Table showing the Saudi custom duty structure for import of rice 6

CHARACTERISTICS OF SAUDI RICE MARKET

The Kingdom of Saudi Arabia’s import of rice accounted for a little less than 4% of the
global traded rice in recent years. The Saudi rice market is very competitive as suppliers from
India, Thailand, Egypt, Pakistan, United States, and Australia and is vying for increased market
share every year. In order to attract consumers, suppliers have introduced price incentives on top of
attractive prizes attached to retail packages. Rice of various varieties is sold in different attractive

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retail packages, ranging between 2 kg a package to 45 kg. There are some cheating practices
currently taking place in the Saudi rice market that includes claiming a producing country's name
different from the actual and mixing of cheap varieties with high quality expensive ones. Field
research has shown that there are around 140,000 different varieties of rice grown around the
world, while the samples of only 90,000 types can be seen or obtained from the major research
institutes such as International Rice Research Institute (IRRI) and entities like the UN Food and
Agricultural Organization (FAO). However, only 19 varieties are very popular and generally
consumed by people around the world. The popular varieties of rice that are consumed in Saudi
Arabia include Basmati, Al-Amber, Egyptian, Punjabi, American, Brown, Permal, Kernel, Tamin,
Brown, and some Iraqi varieties. Basmati rice is the principal variety imported into the Kingdom,
followed by American varieties and other varieties from Egypt, Australia, Thailand and other
countries.

SAUDI RICE CLEANING AND PACKAGING PLANT

The Saudi company AJWA is the only rice cleaning and bagging plant in the Kingdom of
Saudi Arabia. AJWA buys rice in bulk from India and other destinations, and cleans and bags the
rice under its own brand names.

The firm stopped bagging Uncle Ben’s rice from the U.S. a while ago since the Saudi
Uncle Ben’s agent is now sourcing from the Uncle Ben’s Spanish plant. The AJWA complex was
built in 1995 and is located in Jeddah Port. It has the capacity to store 120,000 mt of rice and to
process up to 450,000 mt of rice annually. AJWA is responsible for unloading the vast majority of
bulk grain shipments to Jeddah port. The plant is located next to three berths that it rents from the
Port Authority. The berths can handle vessels carrying up to 100,000 mt of grains.

SAUDI IMPORTS OF RICE

In the Middle East region, the Kingdom of Saudi Arabia is the second largest importer of
rice after Iran, accounting for nearly 3.7% of the total world exports of milled rice in 1999. Saudi
imports of rice marginally rose by 0.5% to 786,983 metric tones in 1999 from 783,062 metric
tones in 1998 and were significantly up from 250,400 tones in 1999. FAO projected Saudi imports
of rice to reach 1,342,000 tones by the year 2005, suggesting a compound growth rate of 11.3%
per annum compared to a yearly average growth rate of 12.1% during the ten year 1989-99 period.
Basmati rice is the principal variety imported by the Kingdom of Saudi Arabia accounting for
nearly 77.3% (608,530 tones) of the total rice imports in 1999, followed by the American rice
(12.02%), Egyptian rice (0.95%), rice in paddy (0.4%) and other rice (9.3%). Stocks of rice held in
Saudi Arabia are estimated to have reached around 500,000 tones at the end of 1999 and are
forecast to reach 610,000 tones by the end of 2005. In value terms, Saudi imports of rice declined
by 3.5% to SR1,817 million in 1999 from SR1,882 million in 1998, but the imports bill was more
than three times the imports bill of SR 552 million in 1989. With traders margin and related costs
estimated at 37.6% above the CIF value of imports, the overall market value of imports had
reached SR 2,500 million ($666.66 million) in 1999. The overall average import price (CIF) of rice
declined by 4% to SR 2,309 (US$ 615.8) per metric ton in 1999 from SR 2,404 (US$ 641.1) per
metric ton in 1998, but was up from SR 2,204 per metric ton in 1989 . The Saudi import price of

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high-quality aromatic rice (Basmati), in particular, was SR 2,405 ($641.33) per ton in 1999
compared with the average import price of American rice of SR2,316 ($617.6) per metric ton in
the same period. Major suppliers of rice to the Kingdom in order of rank included India at nearly
65.2% (514,600 tones) of the total Saudi imports of rice in 1999, followed by the United States
(12% - 94,246 tones), Pakistan (11.3% - 89,025 tones), Thailand (8.3% - 65,606 tones), Australia
(2.45% - 19,298 tones), Egypt (0.17% - 1,313 tones), and other countries (0.64% - 5,000 tones).

India has remained the main beneficiary from the growing Saudi rice market. Basmati
(white and parboiled) and Parimal rice are the leading Indian varieties imported by Saudi Arabia.
In 2004-05, Saudi Arabia imported a total of 1.457 million tons of rice amounting to $536.621
million. India exported 778,286 tons of rice worth $ 404.27 million accounts about 75 percent of
the total rice imported by the Kingdom of Saudi Arabia. Basmati is still the dominant Indian rice
variety imported by the Kingdom of Saudi Arabia.

However, Basmati market share went down by 14 percent in 2003 in favor of a less
expensive and marginal quality Parimal variety. However, Basmati rice regained its No.1 position
in 2004-05. The United States commands a 10 percent market share, has remained the second
largest rice supplier to the Kingdom of Saudi Arabia (followed by Pakistan & Thailand). Indian
Basmati rice commands more than 46 percent of the total rice imported by Saudi Arabia. The
diminished boycott America campaign that started early in 2001, consumer confidence on the
safety of American rice after the lead scare of early 2002, and price competitiveness are the main
factors for the import increase last year.

Figure 11: Trend in rice import by the Kingdom of Saudi Arabia (1989-2005) 7

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SAUDI IMPORTS OF RICE

Year 2000 2001 2002 2003 2004


Egypt 1.61 1.64 2.67 2.94 6.34

US$ millions
Yearly Value
India 333.21 239.14 237.77 272.81 404.26
Pakistan 45.03 32.44 25.66 32.48 41.48
Thailand 20.70 19.72 15.07 15.31 26.12
USA 75.12 57.01 25.40 17.56 38.98
Others 18.37 1.61 1.71 22.56 19.41
Total 494.069 366.100 323.711 363.686 536.62

Table-a

Year 2000 2001 2002 2003 2004


Egypt 3810 6029 6160 8736 18571

Metric Tonnes
Yearly Weight
India 619194 475609 464306 481126 778286
Pakistan 94457 79824 54942 66178 81226
Thailand 57384 61958 50382 42617 61234
USA 128650 110474 58821 45381 73273
Others 33106 31147 34835 42338 33197
Total 936603 765044 669448 686378 1045790

Table-b

Figure 12: Table a & b showing value wise and tonnage wise import of Rice by the Kingdom of Saudi Arabia
(2000-2004) 1
Source: Saudi Ministry of Economy and Planning, Export Import Statistics from 2000 till 2004.

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Yearly Value 2000 Yearly Weight 2000

U.S.A. Others
Egypt
15% 4% U.S.A. Others Egypt
0%
14% 4% 0%
Thailand
4% Thailand
6%

Pakistan
10% India
Pakistan
India 66%
9%
68%

Yearly Value 2001 Yearly Weight 2001


Others
Others Egypt 4%
0% 0%
U.S.A. U.S.A. Egypt
16% 14% 1%
Thailand
6% Thailand
8%

Pakistan Pakistan India


9% India 10% 63%
69%

Yearly Value 2002 Yearly Weight 2002


Others
5%
U.S.A. Others
Thailand Egypt U.S.A.
8% 1% Egypt
5% 1% 9%
1%
Pakistan Thailand
8% 8%

Pakistan
8%
India
India 69%
77%

Yearly Value 2003 Yearly Weight 2003


U.S.A.
U.S.A. Others Egypt 7%
Thailand 5% 6% 1% Others Egypt
4% Thailand
6% 6% 1%

Pakistan
Pakistan 10%
9%

India
India 70%
75%

Yearly Value 2004 Yearly Weight 2004

U.S.A. Others Egypt


7% 4% 1%
Thailand Egypt
U.S.A. Others
Thailand 3% 2%
5% 7%
6%
Pakistan
Pakistan 8%
8%

India India
75% 74%

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Figure 13: Pie diagrams showing the market share in both values and tonnage of rice exporting countries in the
Kingdom of Saudi Arabia (2000-2004) 1

INDIAN RICE

(A) BASMATI RICE

India is the largest producer & exporter of Basmati rice in the world. The production
hovers around 1.0-1.5 million metric tonnes of which exports are steady at 500,000 mts tonnes.

Range: Silky White / Sella / Pusa Basmati; Basmati Grade A; Basmati Grade B.

(B) NON-BASMATI RICE

India is the second largest producer of rice & the fourth largest exporter in the world.
Although it has the world's largest acreage to the tune of 43 million hectares, the average
productivity is as low as 2.9t/ha compared to average world yield of 3.8 t/ha. This stands far below
China & USA's average yield of 6.3 – 6.6 t/ha.

Out of its total production output of 82 million tones (1999-2000), almost 95% is consumed
locally and only 5% is exported. This just contributes to 11% of the global trade (2 million tonne
exports vs. 18 million tonnes of global trade).

The market for rice in Saudi Arabia is large and growing. The country relies on imports to
cover all of its needs for this product. Although the U.S. is a major player in the rice market,
competition is stiff. India is the dominant force in this market with about 60 percent market share
followed by the USA with about 16 percent. Indian rice competes aggressively with U.S. rice both
on price and promotional activities. Other competitors include Pakistan, Thailand and Australia.

The Saudi population is growing at 3.5 percent a year and more than 80 percent of Saudi
and most of the expatriates in the Kingdom consume rice daily. There is one major Saudi rice
importer who imports bulk rice and bags it for re-export to nearby African and Arab countries.
U.S. rice is shipped in bulk to a modern packing plant in Jeddah and a percentage is transshipped
as well.

Major Import Markets

Saudi Arabia 65% of the Indian exports

Kuwait 10% of the Indian exports

U.K 15% of the Indian exports

U.A.E 5% of the Indian exports

Others 5% of the Indian exports

Figure 14: Table showing Saudi Arabia’s dominant position in India’s export of rice in international market 7

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REASONS FOR INCREASED DEMAND FOR INDIAN RICE 5

Saudi rice traders believe Indian rice exports will continue to benefit most from the growing rice
market than American rice for the following reasons:

a) A significant percentage of Saudis and expatriates with low incomes have shifted from U.S. rice
to Indian Parimal rice (PR106). Indian Parimal parboiled rice was introduced in the Kingdom 10
years ago and has rapidly gained in popularity. Indian Parimal was instrumental in prompting a
significant decline in exports of Thai parboiled rice to the Kingdom.

b) The Saudi rice trade acknowledges that the quality of U.S. rice is superior to Parimal rice, but
concedes that the vast majority of consumers are unable to ascertain the difference between the
two varieties. Sources allege that illicit traders often pass off Indian rice as American rice, by
bagging Indian rice in bags associated with U.S.-origin rice. This practice, according to the trade,
has been going on for several years, but is virtually impossible to stop.

c) The leading aromatic fine quality rices in world trade popularly known as Basmati rice is
fetching good export price in the international markets for its three district quality features viz.-
pleasant aroma, superfine grains and extreme grain elongation. About two third of basmati rice
produced in India is exported. Basmati rice is exported to various countries in the world from
India.

d) The availability of dozens of brands of Basmati and non-Basmati rice, mainly from India, on the
Saudi market has greatly increased competition at the expense of U.S. brands. There appears to be
less than 10 different U.S. brands on the Saudi market.

e) While Indian and other rice are perceived as "natural" rice, U.S. rice has been frequently
perceived as "Mechanical," according to the Saudi rice trade. U.S. rice companies should work
hard to dispel this myth.

f) The Indian Parimal rice which is the least expensive compared to our other rice exports which
is competing the finest quality long grain rice from the U.S. in the Saudi markets.

INDIA’S EXPORT OF RICE TO KSA

Rice is exported from India to many countries in the world. India is facing stiff competition
in the international markets for the export of rice. Thailand is one amongst the world's largest rice
exporting country. Vietnam is another large exporter of rice, but currently the demand for
Vietnamese rice has steeply declined in the international market due to which India is likely to
become world's first largest exporter of rice.

Thailand, India and U.S.A. are the only countries making parboiled rice and exporting it.
Thailand, Vietnam and India are also exporting 100% broken rice. Data in respect of parboiled and
broken rice exports separately from India are not available. Hence, export of rice from India has
been divided in to two category i.e., basmati rice and non-basmati rice. The following tables show
export of rice by India to the Kingdom of Saudi Arabia from 2001-2002 to 2005-06.

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(a) Rice
2001- 2002- 2003- 2004- 2005-
S.No. \Year
2002 2003 2004 2005 2006
1. Values in US$ Million 261.05 226.93 268.98 421.28 423.31
2. %Growth -13.07 18.53 56.62 0.48
3. Total export of commodity 665.55 1,218.27 907.04 1,506.50 1,405.19
4. %Growth 83.05 -25.55 66.09 -6.72
5. %Share of country (1 of 3) 39.22 18.63 29.65 27.96 30.12
6. Total export to country 826.43 940.74 1,123.31 1,412.06 1,809.77
7. %Growth 13.83 19.41 25.71 28.17
8. %Share of commodity (1 of 6) 31.59 24.12 23.95 29.83 23.39
Exchange rate: (1US$ = Rs.) 47.6919 48.3953 45.9513 44.9315 44.2735

(b) Commodity: 100630 SEMI/WHOLLY MILED RICE W/N POLISHED/GLAZED


Country: SAUDI ARAB
2001- 2002- 2003- 2004- 2005-
S.No. \Year
2002 2003 2004 2005 2006
1. Values in US$ Million 261.00 226.80 268.88 421.12 423.10
2. %Growth -13.10 18.55 56.62 0.47
3. Total export of commodity 655.05 1,208.15 900.26 1,476.47 1,359.02
4. %Growth 84.44 -25.48 64.00 -7.95
5. %Share of country (1 of 3) 39.84 18.77 29.87 28.52 31.13
6. Total export to country 826.43 940.74 1,123.31 1,412.06 1,809.77
7. %Growth 13.83 19.41 25.71 28.17
8. %Share of commodity (1 of 6) 31.58 24.11 23.94 29.82 23.38
Exchange rate: (1US$ = Rs.) 47.6919 48.3953 45.9513 44.9315 44.2735

(c) Commodity: 10063010 RICE PARBOILED


Country: SAUDI ARAB
2001- 2002- 2003- 2004- 2005-
S.No. \Year
2002 2003 2004 2005 2006
1. Values in US$ Million 7.09 5.39 21.10 27.36 19.46
2. %Growth -23.94 29.63 -28.86
3. Total export of commodity 125.88 205.24 287.94 583.76 497.92
4. %Growth 63.05 102.74 -14.71
5. %Share of country (1 of 3) 5.63 2.63 7.33 4.69 3.91
6. Total export to country 826.43 940.74 1,123.31 1,412.06 1,809.77
7. %Growth 0.86 13.83 19.41 25.71 28.17

17
8. %Share of commodity (1 of 6) 0.57 1.88 1.94 1.08
Exchange rate: (1US$ = Rs.) 47.6919 48.3953 45.9513 44.9315 44.2735

(d) Commodity: 10063020 BASMATI RICE


Country: SAUDI ARAB
2001- 2002- 2003- 2004- 2005-
S.No. \Year
2002 2003 2004 2005 2006
1. Values in US$ Million 222.01 217.42 232.41 353.30 375.94
2. %Growth -2.07 52.01 6.41
3. Total export of commodity 386.39 426.20 433.73 628.49 687.34
4. %Growth 10.30 44.90 9.36
5. %Share of country (1 of 3) 57.46 51.01 53.58 56.21 54.70
6. Total export to country 826.43 940.74 1,123.31 1,412.06 1,809.77
7. %Growth 13.83 19.41 25.71 28.17
8. %Share of commodity (1 of 6) 26.86 23.11 20.69 25.02 20.77
Exchange rate: (1US$ = Rs.) 47.6919 48.3953 45.9513 44.9315 44.2735

(e) Commodity: 10063090 RICE EXCPTG PARBOILED (EXCL BASMATI RICE)


Country: SAUDI ARAB
2001- 2002- 2003- 2004- 2005-
S.No. \Year
2002 2003 2004 2005 2006
1. Values in US$ Million 31.90 3.99 15.36 40.47 27.69
2. %Growth -87.49 163.42 -31.57
3. Total export of commodity 142.78 576.71 178.60 264.21 173.76
4. %Growth 303.92 47.94 -34.23
5. %Share of country (1 of 3) 22.34 0.69 8.60 15.32 15.94
6. Total export to country 826.43 940.74 1,123.31 1,412.06 1,809.77
7. %Growth 13.83 19.41 25.71 28.17
8. %Share of commodity (1 of 6) 3.86 0.42 1.37 2.87 1.53
Exchange rate: (1US$ = Rs.) 47.6919 48.3953 45.9513 44.9315 44.2735

(f) Commodity: 100640 BROKEN RICE


Country: SAUDI ARAB
2001- 2002- 2003- 2004- 2005-
S.No. \Year
2002 2003 2004 2005 2006
1. Values in US$ Million 0.01 0.09 0.10 0.15 0.20
2. %Growth 567.00 10.17 45.36 40.81
3. Total export of commodity 3.51 7.33 2.01 28.18 40.39
4. %Growth 108.64 -72.57 1,301.19 43.34

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5. %Share of country (1 of 3) 0.39 1.24 4.96 0.51 0.51
6. Total export to country 826.43 940.74 1,123.31 1,412.06 1,809.77
7. %Growth 13.83 19.41 25.71 28.17
8. %Share of commodity (1 of 6) 0.00 0.01 0.01 0.01 0.01
Exchange rate: (1US$ = Rs.) 47.6919 48.3953 45.9513 44.9315 44.2735

Figure: 15 Table (a-f) showing trend in export of rice by India to the Kingdom of Saudi Arabia from 2001-02 to
2005-06 2
Source: APEDA

The leading aromatic fine quality rice in world trade popularly known as Basmati rice is
getting good price in the international markets for its three district quality features viz.-pleasant
aroma, superfine grains and extreme grain elongation. About two third of basmati rice produced in
India is exported. Basmati rice is exported to various countries in the world from India.

The rice exports from India registered a decline of over 13 % in 2002 -03 as compared to
2001-2002. In 2003-04, a growth of over 18 % was registered. In 2004-05, India had registered a
significant growth of over 56 % by exporting rice over $ 421 million. In 2005-06 India exported
rice of US$ 423.31 million, which established India, a dominant player in the Saudi Arabian rice
market. Basmati is main export variety of India’s rice to Saudi Arabia. Basmati export to Saudi
Arabia reached at $ 376 million, which is about 89 % of the rice worth $ 423 million exported by
India to Saudi Arabia in 2005-06.

FINDINGS AND SUGGESTIONS

1) India continues to be competitive in the global par-boiled rice market but it has been out-
priced, mainly by Pakistan, by its cheapest price in the near past, but the Dry Matter and the Break
Point of the Indian rice is scaled upto 42 PSI, where as the Pakistan parboiled rice scaled to only
38 PSI, it is suggested to increase maintain the quality of the rice by providing more technical
expertise in order to remain dominant in the market.

2) As India is still a dominant player in the Saudi market, still there are some pitfalls are faced
due to the blending of wrong varieties of rice during exports projects the negative aspects of the
trade, it is suggested to maintain the quality check before exports for such a shipment.

3) Another major problems faced by the local traders are the weight shortage, even though the
weight has to be calculated according to the weather condition, the tolerance limit of the weight
has not been reached in many cases after even the stock get matured, It is suggested to prescribe
the local traders the exact level of quantity to be exported to the trader in order to attain and
maintain the satisfaction and the brand loyalty towards the traders.

4) The maximum residue level for the Diazenon should be 0.02-0.05 PPM milligrams of
residue of residue per kilogram as per Saudi standards. The pesticides is often misused by non
professionals, in-experienced farmers, who do not take into consideration, the safe period (Waiting
period) between spraying and gathering of crops, specified according to the type of pesticides.

19
Which may considered to cause permanent disabilities and quadruples, which may taken into
consideration for maintain proper timescale for the crops after the harvest and export.

Saudi Arabian Government Ministries


Ministry of Agriculture and Water Ministry of Commerce & Industry
H.E. Dr. Abdullah Abdul Rahman Bin H.E. Osama Jaafar Faquih, Minister
Moaamar, Minister Mr. Muhammad Hussein Karoob, Deputy
Mr. Abdulaziz Al-Mudbil, Deputy Minister for Minister for Domestic Trade
Research Mr. Muneer N. Alotaibi, Deputy Minister for
P.O. Box 2639 International Trade
Riyadh 11195 Dr. Fawaz A. Alhasani Deputy Minister for
Telephone: 966-1-401-6666 / 401-2777 Technical Affairs
Fax: 966-1-403-1415 / 404-4592 Mr. Abdulaziz Al-Jasser, Assistant Deputy
Minister for International Trade
P.O. Box 1774
Riyadh 11162
Telephone: 966-1-401-2222 / 401-4708
Fax: 966-1-403-8421 / 402-6640
Saudi Arabian Agencies and Organizations
Saudi Arabian Department of Customs Saudi Arabian Standards Organization
H.E. Saleh Bin Ali Al-Barak, Director General (SASO)
Mr. Mohammed H. Al-Judaibi, Assistant Dr. Khalid Youssef Al-Khalaf, Director General
Director General Eng. Nabil Mulla, Deputy Director General
P.O. Box 3483 P.O. Box 3437
Riyadh 11471 Riyadh 11471
Telephone: 966-1-401-3334 Telephone: 966-1-452-0000 / 448-9366
Fax: 966-1-404-3412 / 404-3400 Fax: 966-1-452-0196
Web site: www.saso.org

Saudi Ports Authority


Mr. Mohammad Bakr, Director General
P.O. Box 5162
Riyadh 11188
Telephone: 966-1-405-0005
Fax: 966-1-405-3335 / 405-3456 / 405-99774

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LIST OF SAUDI IMPORTERS OF RICE

Saleh Babakar & Sons Co. Saleh & Abdulaziz Abahsain Co. Ltd.
P.O. Box: 20561, Riyadh-11465 P.O. Box: 209, Al Khobar- 31952
Tel: 00966-1-4026302 /4229770 Tel: 00966-3- 8984045/ 8983856/
Fax: 00966-1- 402 6324 8982298
E-mail : babaker@ogertel.com Fax: 00966-3-8990114
E-mail: abahsainfood@zajil.net
commercial@abahsain.net
Website: food@abahsain.net
A.K. Almuhaidib & Sons Abdul Kadir Al- Muhaideb & Sons
PO Box:30, Dammam- 31411 P.O. Box: 11451, Riyadh-11451
Tel: 00966-3-8322033 Tel. 00966-1-4488322 /4488404
Fax: 00966-3-8336082 Fax :00966-1- 447 0578
E-mail: info@mohaidib.com.sa
Abdulrahman & Mohamed A. Aziz Al Almawarid Trading Co. Ltd
Shalan Co. P.O. Box: 17320, Riyadh-11484
P.O. Box:1620, Riyadh-11441 Tel: 00966-1-4778144
Tel: 00966-1-4136000 Fax: 00966- 1- 4778933
Fax: 00966-1-4111332 E-Mail: niranjanm_reddy@hotmail.com
E-mail: mohammed@alshalan.com
Website: www.alshalan.com
Al- Yakuthi Est. Balsharaf Trading Est.
PO Box: 1620, Akaria Build, Riyadh P.O. Box: 3210, Riyadh-11471
Tel: 00966-1-4557283 Tel: 00966-1- 411 68
Fax: 00966-1- 4557269 Fax: 00966-1- 411 0284
E-Mail: yaquteehtrading@primnet.sa /
yaquteeh@hotmail.com
Al- Bawardi Company Omar Ali Balsharaf Trading Est.
P.O. Box: 217 , Riyadh -11411 P.O. Box: 31116 , Riyadh-11497
H.O. Dammam, P.O. Box: 112 Tel: 00966-1- 4577214
Dammam-31411 Fax: 0096-1- 458 5350
Tel: 00966-1-4790000/ 4777272 Abdul Aziz & Mohammed A. Al-
Fax: 00966-1- 479 0999 Jomaih Co.
Tel: 00966-3-8335555 P.O. Box: 41132, Riyadh 11411
Fax: 00966-3-8334122 Tel: 00966-1- 4788811/ 4913700
E-Mail: info@albawardi.com Fax: 00966-1- 477 4038
E-Mail: zsamir@aljomih.com.sa
Omar A. Al Essay Reef Est. For Supply & Import
P.O. Box: 17390 , Riyadh-11484 P.O. Box: 3476 Riyadh-11471
Tel: 00966-1-4052626 Tel: 00966-1- 411 0822
Fax : 0096-1- 405 2626 Fax: 00966-1- 411 0355
E-Mail: ryd_mng@okam.com.sa E-Mail: alreef@nasma.net.sa
A.S Balubaid Trading Est. Al- Faris Est. Head Office
P.O. Box: 46, Riyadh-11411 P.O. Box: 370, Dammam
Tel. 00966-1-4119376 Tel. 00966-3- 832 1843

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Fax : 00966-1- 4114708 Fax: 00966-3- 832 8332
E-Mail alfaresco@naseej.com.sa
Mizan Food Company Abdulrahman & Mohammed A. Al- Ali
P.O. Box: 5579, Riyadh -11432 Al- Shaalan Co.
Tel: 00966-1- 4588801 P.O. Box: 584, Dammam-31421
Fax: 00966-1-457 2700/ 459 0473 Tel: 00966-3-8331306
E-Mail meezan@saudionline.com.sa Fax: 00966-3-8332360
Beed For Trading Co. Hamed A. Al- Faris & Sons Co.
P.O. Box: 4173, Riyadh-11413 Dammam
Tel: 00966-1-4020328 / 4028976 Tel: 00966-3-8321843
Fax: 00966-1-4034104 Fax: 00966-3-8332029
Website: www.beedgroup.com E-Mail: alfaresco@naseej.com.sa
Beed Trading Co. Khalifa Abdulrahman Al Gosaibi Cold
P.O. Box: 9173, Riyadh 11413 store
Tel: 00966-1-4020328 Dammam, KSA
Fax: 00966-1-4034104 Tel: 00966-3-8914541
E-Mail: sardia36@hotmail.com Fax: 00966-3-8914541
Web: www.beedgroup.com
Abdulaziz & Mohammed Al Jomaih Co. Al- Shedaif Trading Co.
P.O. Box: 132, Riyadh 11411 P.O. Box: 4150, Riyadh 11491
Tel: 00966-1-4778811 Tel: 00966-1-2417500 (H.O) / 241 0186
Fax: 00966-1-4774038 Fax: 00966-1- 4763899
E-Mail shdaiflama@lycos.com
Badar Al Badar Company Ahmed M.S. Baeshin & Partners Co.
P.O. Box: 37150, Riyadh- 11439 P.O. Box: 59514, Riyadh 11535
Tel: 00966-1-2713029/ 4253187 Tel: 00966-1- 476 4769 / 478 0349
Fax: 00966-1- 428 6952 Fax: 00966-1- 478 3217
E-Mail diafa_badr@aldiafa.com E-Mail info@baeshen.com
Website: www.baeshen.com
Ajwa RMTI Abdul Ghani Mohammed Noorwali
P.O. Box: 16645, Jeddah- 21474 P.O. Box: 29, Jeddah-21411
Tel: 00966-2- 6420552 Tel: 00966-2- 6424527, 6424530
Fax: 00966-2- 6440047 Fax: 00966-2- 6421663
E-Mail noowali@shabakah.net.sa
Abbar & Zainy, AL Muhaidib Abdul Kader & Sons
Food Supply & Services Company, P.O. Box:16197, Jeddah 21464
P.O. Box: 6319, Jeddah-21442 Tel : 00966-2-6170000, 6173333
Tel: 00966-2- 6274913, 6274917 E-Mail: info@mbm.com.sa
E-Mail: info@azfss.com
Al Esayi Omer K. & Co. Ltd Alpha Trading & Shipping Agencies
P.O. Box: 8680, Jeddah-21492 Ltd.
Tel: 00966-2- 6472164, 6472194 P.O. Box: 205, Jeddah-21411
E-Mail info@okam.com.sa Tel: 00966-2-6440808, 6421188
E-Mail: alfajeddah@yahoo.com
Saleh Bin Mahfooz Arabian Trading Corporation
P.O. Box: l059, Jeddah P.O. Box -22670, Jeddah-21416

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Tel: 00966-2-6431293 Tel: 00966-2-6475561, 6487742
E-Mail - bnmahfuz@mail.gcc.bh Fax: 00966-2-6482246, 6272588
E-mail: atraco@zajil.net
M.O. Aziz Khan Al-Maimani Est .
P.O. Box: 37, Jeddah-21411 P.O. Box: 3328, Jeddah-24211
Tel: 00966-2- 6422792 , 6422792 Tel: 00966-2- 6481122 ,6475148
E-mail: LAMIMANI@compuserve.com
Abu Zeid Trading & Contracting Co. Baaboud, Salim Abdalla Est.
P.O. Box: 3228, Jeddah- 21471 P.O. Box: 189, Jeddah- 21411
Tel: 00966-2-6633332 Tel: 00966-2-6421437
Fax: 00966-2- 6633331 Fax: 00966-2-6422877
Bahasan Trading Establishment Jamjoom General Agencies
P.O. Box: 612, Jeddah- 21421 P.O. Box: 2127, Jeddah- 21451
Tel: 00966-2-6444900 Tel: 00966-2-6456458
Fax: 00966-2-6451830 Fax: 00966-2- 6457759 / 6450041
Al-Nafea Trading Est. (Head Office) Al-Amimani Est.
P.O. Box: 12449, Jeddah- 21473 P.O. Box: 3328, Jeddah- 21471
Tel: 00966-2-6473635 Tel: 00966-2-6475148
Fax: 00966-2-6477621 Fax: 00966-2-6481122
E mail: alnafeajed@hotmail.com E mail: almaimni@tri.net.sa
Noorwali, Abdulghani Mohamed Est. Al Dahlawi Company
P.O. Box: 29, Jeddah- 21411 P.O. Box: 1522, Jeddah- 21441
Tel: 00966-2-6424530 Tel: 00966-2-6980000
Fax: 00966-2-6421663 Fax: 00966-2-6981238
E mai:l noowali@shabakah.net.sa
Jamjoom, Mohd. Nour Salah & Sons (Established 1934)
PO Box: 12, Jeddah- 21411
Tel: 00966-2-6425343
Fax: 00966-2-6427054

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Bibliography

1) Saudi Ministry of Economy and Planning, Export Import Statistics from 2000 till 2004.
2) Agricultural & Processed Food Products Export Development Authority
www.apeda.com)
3) Saudi Arabian Standards Organisation (www.saso.org)
4) www.basmati.com
5) www.itcibd.com
6) Saudi Department of Customs (SADC), (www.customs.gov.sa)
7) www.oryza.com
8) www.foodbycountry.com
9) http://www.dacnet.nic.in
10) www.fas.usda.gov

Prepared by:
Mohammed Anas Kader (MRA), Commercial Section, Consulate General of India.

Edited by:
Mr. Ashok Kumar, Consul (Commercial), Consulate General of India, Jeddah, KSA.

N.B.: Views expressed have been compiled from various sources. The reports are edited to fit
in the material taking utmost care of not altering the contents of the reports. The editorial
board has also tried to ensure to the extent possible to avoid errors. However, if there are any
errors, these may be brought to our notice.

24