Consulate General of India Commercial Section JED/COM/201/7/2006. A Market Report on Rice in the Kingdom of Saudi Arabia

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1 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 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 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 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 kg per person in 1989 to kg per person in 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 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.

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

3 Figure 3: Composite bar diagram showing major rice importing countries during years 2005, 2006 and INTERNATIONAL RICE TRADE International rice market is skewed compared to its production. In the 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 paddyrice was 566 million tones during the 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 crop year, compared with million tones in the crop year, and climbed to 422 million tones in the 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 3

4 million tones) in the crop year compared with 10.7% (55.5 million tones) of global production in the crop year. World demand for milled rice rose by 1.3% to 422 million tones annually during , down from 1.9% annual growth during 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 ( ). 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 $ per metric on in 1993 and peaked at $ per metric ton in 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 $ per metric ton in 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. 4

5 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 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 5

6 Raw Basmati Silky Basmati Golden Parboiled Basmati Broken Rice Basmati Rice Figure 6: Pictures showing various types of Indian Basmati rice 6

7 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 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: 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. Publishing Saudi standards by the most proper means. Promoting standardization awareness by publicity and other means and coordinating all activities relating to standards and measurements in the Kingdom. 7

8 Setting the rules for granting certificates of conformity and quality mark and regulating their issuance and use. Participating in the Arab, Regional and International Organizations Kernel Length (mm) Type Long: Kernel Medium: Kernel Short: Kernel American More than Less than 6.2 Indian More than Less than 4.5 Thai More than Less than 6.2 Philippines More than Less than 5.0 Other* More than 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 Grains Foreign Matter Damaged Grains** Other Types* Moisture As % (Maximum) Excellent Grade A Grade B * 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 Damaged Grains (Including yellow and black grains) Chalky grains Red grains Head damaged grains * Parboiled Rice * Milled Rice

9 Paddy Other rice types (different varieties and processing) Foreign matter Moisture 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 0.5 o C. 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. 9

10 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 Rice in the husk (paddy or rough) Free -Husked (brown) rice Free -Semi milled or wholly milled rice, whether or not polished or glazed Free -Broken rice 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 10

11 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 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 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 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 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 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 ($ million) in 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 The Saudi import price of 11

12 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 , Saudi Arabia imported a total of million tons of rice amounting to $ million. India exported 778,286 tons of rice worth $ 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 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 ( ) 7 12

13 SAUDI IMPORTS OF RICE Year Egypt India Pakistan Thailand USA Others Total Yearly Value US$ millions Table-a Year Egypt India Pakistan Thailand USA Others Total Table-b Yearly Weight Metric Tonnes Figure 12: Table a & b showing value wise and tonnage wise import of Rice by the Kingdom of Saudi Arabia ( ) 1 Source: Saudi Ministry of Economy and Planning, Export Import Statistics from 2000 till

14 Yearly Value 2000 Yearly Weight 2000 Thailand 4% U.S.A. 15% Others 4% Egypt 0% Thailand 6% U.S.A. 14% Others 4% Egypt 0% Pakistan 9% India 68% Pakistan 10% India 66% Thailand 6% Others 0% U.S.A. 16% Yearly Value 2001 Egypt 0% Thailand 8% U.S.A. 14% Yearly Weight 2001 Others 4% Egypt 1% Pakistan 9% India 69% Pakistan 10% India 63% Thailand 5% Pakistan 8% U.S.A. 8% Yearly Value 2002 Others 1% Egypt 1% India 77% Thailand 8% Pakistan 8% U.S.A. 9% Others Yearly Weight % Egypt 1% India 69% Thailand 4% U.S.A. 5% Yearly Value 2003 Others 6% Egypt 1% Thailand 6% U.S.A. 7% Yearly Weight 2003 Others 6% Egypt 1% Pakistan 9% Pakistan 10% India 75% India 70% Yearly Value 2004 Yearly Weight 2004 Pakistan 8% U.S.A. 7% Thailand 5% Others 4% Egypt 1% U.S.A. Thailand 7% Pakistan 6% 8% Others Egypt 3% 2% India 75% India 74% 14

15 Figure 13: Pie diagrams showing the market share in both values and tonnage of rice exporting countries in the Kingdom of Saudi Arabia ( ) 1 (A) BASMATI RICE INDIAN RICE India is the largest producer & exporter of Basmati rice in the world. The production hovers around 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 t/ha. Out of its total production output of 82 million tones ( ), 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 Kuwait U.K U.A.E Others 65% of the Indian exports 10% of the Indian exports 15% of the Indian exports 5% of the Indian exports 5% of the Indian exports Figure 14: Table showing Saudi Arabia s dominant position in India s export of rice in international market 7 15

16 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 to

17 (a) Rice S.No. \Year Values in US$ Million %Growth Total export of commodity , , , %Growth %Share of country (1 of 3) Total export to country , , , %Growth %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) (b) Commodity: SEMI/WHOLLY MILED RICE W/N POLISHED/GLAZED Country: SAUDI ARAB S.No. \Year Values in US$ Million %Growth Total export of commodity , , , %Growth %Share of country (1 of 3) Total export to country , , , %Growth %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) (c) Commodity: RICE PARBOILED Country: SAUDI ARAB S.No. \Year Values in US$ Million %Growth Total export of commodity %Growth %Share of country (1 of 3) Total export to country , , , %Growth

18 8. %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) (d) Commodity: BASMATI RICE Country: SAUDI ARAB S.No. \Year Values in US$ Million %Growth Total export of commodity %Growth %Share of country (1 of 3) Total export to country , , , %Growth %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) (e) Commodity: RICE EXCPTG PARBOILED (EXCL BASMATI RICE) Country: SAUDI ARAB S.No. \Year Values in US$ Million %Growth Total export of commodity %Growth %Share of country (1 of 3) Total export to country , , , %Growth %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) (f) Commodity: BROKEN RICE Country: SAUDI ARAB S.No. \Year Values in US$ Million %Growth Total export of commodity %Growth ,

19 5. %Share of country (1 of 3) Total export to country , , , %Growth %Share of commodity (1 of 6) Exchange rate: (1US$ = Rs.) Figure: 15 Table (a-f) showing trend in export of rice by India to the Kingdom of Saudi Arabia from to 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 as compared to In , a growth of over 18 % was registered. In , India had registered a significant growth of over 56 % by exporting rice over $ 421 million. In India exported rice of US$ 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 FINDINGS AND SUGGESTIONS 1) India continues to be competitive in the global par-boiled rice market but it has been outpriced, 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 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

20 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. Ministry of Agriculture and Water H.E. Dr. Abdullah Abdul Rahman Bin Moaamar, Minister Mr. Abdulaziz Al-Mudbil, Deputy Minister for Research P.O. Box 2639 Riyadh Telephone: / Fax: / Saudi Arabian Department of Customs H.E. Saleh Bin Ali Al-Barak, Director General Mr. Mohammed H. Al-Judaibi, Assistant Director General P.O. Box 3483 Riyadh Telephone: Fax: / Saudi Arabian Government Ministries Ministry of Commerce & Industry H.E. Osama Jaafar Faquih, Minister Mr. Muhammad Hussein Karoob, Deputy Minister for Domestic Trade Mr. Muneer N. Alotaibi, Deputy Minister for International Trade Dr. Fawaz A. Alhasani Deputy Minister for Technical Affairs Mr. Abdulaziz Al-Jasser, Assistant Deputy Minister for International Trade P.O. Box 1774 Riyadh Telephone: / Fax: / Saudi Arabian Agencies and Organizations Saudi Arabian Standards Organization (SASO) Dr. Khalid Youssef Al-Khalaf, Director General Eng. Nabil Mulla, Deputy Director General P.O. Box 3437 Riyadh Telephone: / Fax: Web site: Saudi Ports Authority Mr. Mohammad Bakr, Director General P.O. Box 5162 Riyadh Telephone: Fax: / /

21 LIST OF SAUDI IMPORTERS OF RICE Saleh Babakar & Sons Co. P.O. Box: 20561, Riyadh Tel: / Fax: babaker@ogertel.com A.K. Almuhaidib & Sons PO Box:30, Dammam Tel: Fax: info@mohaidib.com.sa Abdulrahman & Mohamed A. Aziz Al Shalan Co. P.O. Box:1620, Riyadh Tel: Fax: mohammed@alshalan.com Website: Al- Yakuthi Est. PO Box: 1620, Akaria Build, Riyadh Tel: Fax: yaquteehtrading@primnet.sa / yaquteeh@hotmail.com Al- Bawardi Company P.O. Box: 217, Riyadh H.O. Dammam, P.O. Box: 112 Dammam Tel: / Fax: Tel: Fax: info@albawardi.com Omar A. Al Essay P.O. Box: 17390, Riyadh Tel: Fax : ryd_mng@okam.com.sa A.S Balubaid Trading Est. P.O. Box: 46, Riyadh Tel Saleh & Abdulaziz Abahsain Co. Ltd. P.O. Box: 209, Al Khobar Tel: / / Fax: abahsainfood@zajil.net commercial@abahsain.net Website: food@abahsain.net Abdul Kadir Al- Muhaideb & Sons P.O. Box: 11451, Riyadh Tel / Fax : Almawarid Trading Co. Ltd P.O. Box: 17320, Riyadh Tel: Fax: niranjanm_reddy@hotmail.com Balsharaf Trading Est. P.O. Box: 3210, Riyadh Tel: Fax: Omar Ali Balsharaf Trading Est. P.O. Box: 31116, Riyadh Tel: Fax: Abdul Aziz & Mohammed A. Al- Jomaih Co. P.O. Box: 41132, Riyadh Tel: / Fax: zsamir@aljomih.com.sa Reef Est. For Supply & Import P.O. Box: 3476 Riyadh Tel: Fax: alreef@nasma.net.sa Al- Faris Est. Head Office P.O. Box: 370, Dammam Tel

22 Fax : Fax: alfaresco@naseej.com.sa Mizan Food Company Abdulrahman & Mohammed A. Al- Ali P.O. Box: 5579, Riyadh Al- Shaalan Co. Tel: P.O. Box: 584, Dammam Fax: / Tel: meezan@saudionline.com.sa Fax: Beed For Trading Co. P.O. Box: 4173, Riyadh Tel: / Fax: Website: Beed Trading Co. P.O. Box: 9173, Riyadh Tel: Fax: sardia36@hotmail.com Web: Abdulaziz & Mohammed Al Jomaih Co. P.O. Box: 132, Riyadh Tel: Fax: Badar Al Badar Company P.O. Box: 37150, Riyadh Tel: / Fax: diafa_badr@aldiafa.com Ajwa RMTI P.O. Box: 16645, Jeddah Tel: Fax: Abbar & Zainy, Food Supply & Services Company, P.O. Box: 6319, Jeddah Tel: , info@azfss.com Al Esayi Omer K. & Co. Ltd P.O. Box: 8680, Jeddah Tel: , info@okam.com.sa Saleh Bin Mahfooz P.O. Box: l059, Jeddah Hamed A. Al- Faris & Sons Co. Dammam Tel: Fax: alfaresco@naseej.com.sa Khalifa Abdulrahman Al Gosaibi Cold store Dammam, KSA Tel: Fax: Al- Shedaif Trading Co. P.O. Box: 4150, Riyadh Tel: (H.O) / Fax: shdaiflama@lycos.com Ahmed M.S. Baeshin & Partners Co. P.O. Box: 59514, Riyadh Tel: / Fax: info@baeshen.com Website: Abdul Ghani Mohammed Noorwali P.O. Box: 29, Jeddah Tel: , Fax: noowali@shabakah.net.sa AL Muhaidib Abdul Kader & Sons P.O. Box:16197, Jeddah Tel : , info@mbm.com.sa Alpha Trading & Shipping Agencies Ltd. P.O. Box: 205, Jeddah Tel: , alfajeddah@yahoo.com Arabian Trading Corporation P.O. Box , Jeddah

23 Tel: bnmahfuz@mail.gcc.bh Tel: , Fax: , atraco@zajil.net Al-Maimani Est. P.O. Box: 3328, Jeddah , M.O. Aziz Khan P.O. Box: 37, Jeddah Tel: , Tel: LAMIMANI@compuserve.com Abu Zeid Trading & Contracting Co. Baaboud, Salim Abdalla Est. P.O. Box: 3228, Jeddah P.O. Box: 189, Jeddah Tel: Tel: Fax: Fax: Bahasan Trading Establishment P.O. Box: 612, Jeddah Tel: Fax: Al-Nafea Trading Est. (Head Office) P.O. Box: 12449, Jeddah Tel: Fax: E mail: alnafeajed@hotmail.com Noorwali, Abdulghani Mohamed Est. P.O. Box: 29, Jeddah Tel: Fax: E mai:l noowali@shabakah.net.sa Jamjoom General Agencies P.O. Box: 2127, Jeddah Tel: Fax: / Al-Amimani Est. P.O. Box: 3328, Jeddah Tel: Fax: E mail: almaimni@tri.net.sa Al Dahlawi Company P.O. Box: 1522, Jeddah Tel: Fax: Jamjoom, Mohd. Nour Salah & Sons (Established 1934) PO Box: 12, Jeddah Tel: Fax:

24 Bibliography 1) Saudi Ministry of Economy and Planning, Export Import Statistics from 2000 till ) Agricultural & Processed Food Products Export Development Authority 3) Saudi Arabian Standards Organisation ( 4) 5) 6) Saudi Department of Customs (SADC), ( 7) 8) 9) 10) 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