GLOBAL SCENARIO OF RICEshodhganga.inflibnet.ac.in/bitstream/10603/26867/12/9...Rice milled exports from India has reached a high level during 1995 to 1998. Again from 2001-09, it showed

57

CHAPTER-III

GLOBAL SCENARIO OF RICE

3.1. INTRODUCTION:

The world production of rice has increased at a faster rate than world

population over the last three decades despite the fact that rice is produced by

mainly small, marginal that too tenant farmers. Rice price at, world level has

shown a declining trend over last fifty years. But, in Asian countries, over the

years, the price of rice has increased with inter-year fluctuations and intra-

seasonality. Asian consumers depend more on rice for their dietary caloric intake

than consumers in other continents (Chand, 1998).

China is the world’s largest producer and the largest consumer of rice.

Thailand is the largest exporter of rice and Philippines is the largest importer of

rice in the world. In this chapter an analysis of growth trends in world rice prices

during 1994-95 to 2008-09 has been made. It is interesting to note that the annual

average growth rate in yield of rice during the 1980s to 1990s was 3.19 per cent

and it has declined to 1.34 per cent during the subsequent decade. However, it has

showed signs of marginal increase by 1.61 per cent during 2000-09. Looking to

the trends in compound annual growth rate, it revealed that in the decade of first

reform period i, e. from 1991-00, the compound annual growth rate was 1.87 per

cent and it has decreased to 0.64 per cent during 2001-10. The world price of rice

showed continues increasing trend from 1991-2010 and during 2005 to 2007, and

the world price of rice almost got doubled when compared to 1990-91 prices.

Rice milled exports from India has reached a high level during 1995 to 1998.

Again from 2001-09, it showed signs of increase. From1991to 1994 and from

1998-2001, a slackness in the rice milled exports was noticed. India started to

implement some limited policy reforms in the 1980s, and sharply accelerated the

reform process in the early 1990s. As a result of foreign trade liberalization,

exports of rice started increasing from the mid nineties. The tariff rates were

reduced sharply over the decade from a weighted average of 72.5per cent in 1991-

58

92 to 24.6 in 1996-97, but rose again in the late nineties to 35.1per cent in 2001-

02. This may be due to lack of proper rice policies that resulted in imposing a

heavy burden on poor consumers necessitating the government to adopt food

distribution programmes. Keeping this in view a study has been under taken for

the period from 1990-91 to 2001-10 to see whether there was any systematic

relationship between the movement of production and rice price. In this context, it

is reasonable to examine the issue of strengthening linkages between the Indian

domestic market and world markets. It would therefore be interesting to see any

relationship between the movement of export and import, international prices on

impact of trade liberalization of rice sector. The present chapter has been divided

into four parts. The first part deals with recording of facts on the global rice

economy. The second part analyses the trend in rice consumption in major rice

growing countries and the third part examines the trends in rice production and the

factors contributing to the recent deceleration in the growth of rice production and

its impact on prices. Third part is devoted to the analysis of movement in value of

India’s rice exports. Fourth relates to analysis of movement in value of major rice

importing countries. Fifth the examination of competitiveness of rice milled

exports and direction of exports and imports. Sixth part examines impact of trade

liberalization export and import prices of rice and its trade flows. The last part is

devoted to suggesting perspective fruitful rice policies.

3.2. BACKGROUND OF THE STUDY:

3.2.I ANALYSIS OF THE RICE AND GLOBAL ECONOMY:

There exists a high degree of volatility in the world rice market because a

small change in production or consumption brings a relatively large change in its

total trade. Since most of the rice is produced, consumed and traded by Asian

countries and main Asian exporters are Thailand, Vietnam, India, Pakistan and

China. Now, the international trade under World Trade Organisation (WTO) rules

is free from quantitative restrictions. A country’s trade is mostly based on its

comparative and competitive advantage in international trade. So, obviously every

59

country faces a tough competition in international market and tries not only to

maintain but also to increase its share in market (Ilyas.M, Tahir Mukhtar, 2007).

The world rice market is much conservative than other agricultural

commodities, which restricts its development. Competitiveness by any means is

not a new issue, as it seems now-a-days. This concept has become more

fashionable because the markets liberalisation and the emphasis in a more global

economy. Competition used to be more localized within regions and nations but,

now with an increasing international trade, it applies everywhere. Competitors are

not fully identified as they used to and now they might come from faraway place,

which was not the case previously.

This chapter examines the issues related to the decades of persistent

restrictions on both international and internal trade, India started to implement

some limited policy reforms in the 1980s, and sharply accelerated the reform

process in the early 1990s. As a result of foreign trade liberalization, exports of

rice started increasing from the mid nineties. Following the measures announced

in 1994 to liberalize international trade in rice, exports of almost all major

agricultural commodities have been liberalized (Kumar Parmod 2008). India also

liberalized its rice trade in late 1994, relaxing its ban on exports of ordinary rice

and allowing more private sector participation (Del Ninno and Dorosh 2001).

Once the free trade policy is implemented, trade barriers will be eliminated

and this will push domestic prices in rice producing countries to move closer to

international prices (Chand, 1998). Licensing arrangements have been relaxed,

tariffs have been reduced, many items have been freed from quantitative

restrictions, and the private sector has been permitted to import most food items.

The general trend has been towards lower tariffs, though domestic political

pressures have at times reversed this process. The tariff rates were reduced sharply

over the decade from a weighted average of 72.5per cent in 1991-92 to 24.6 in

1996-97, but rose again in the late nineties to 35.1per cent in 2001-02. In this

60

context, it is reasonable to examine the issue of strengthened linkages between the

Indian domestic market and world markets.

The Indian rice market was opened up to international trade at the end of

1994 resulting in a quantum jump in exports. Rice is the staple food of the 70% of

the world’s poor living in Asia (Gulati and Narayanan 2002). The international

rice market is among the most distorted of commodity markets. It is frequently

characterized as thin, volatile and segmented (Gulati and Narayanan 2002).

Many countries, primarily in Asia, have strict limits on rice imports and exports,

and prices vary widely across countries. A the international rice market has

become so distorted because of the immense social and cultural importance

attached to rice, both as a staple crop essential for rural and urban food security in

Asia, and as a product of subsistence farming that ensures a livelihood for millions

of rural poor. One major outcome of these distortions is that very little rice is

traded and world prices, as a result, are quite volatile. Market interventions to

protect high-cost producers in the developed world, particularly the US and Japan,

further deform these markets.

This is consistent with the view that liberalizing rice exports has indeed

facilitated faster convergence of internal prices with international prices in rice

surplus states. Foreign trade liberalization is not symmetric in the way it deals with

exports and imports. Reflecting the dominance of producer interests in policy

formation, exporting has been made significantly more liberal than importing. This

would have implications for the spatial patterns of price convergence, with surplus

locations which are the likely exporters more likely to converge faster to

international prices.

Foreign exchange rate is an important factor affecting prices in global rice

trade because international rice prices are quoted in US dollars. Under normal

condition, if the local currency of a rice exporter is appreciating relative to the US

dollar, its rice export price (in US dollars) will increase which in turn will weaken

its competitiveness in the global rice market. On the other hand, if an importing

61

country’s local currency is appreciating relative to the US dollar, its rice import

price (in US dollars) decreases which puts less burden on its local economy.

Nearly all rice imports are fragrant jasmine rice, primarily from Thailand.

Domestic production of fragrant rice is increasing, however displacing imports.

Unless there is a significant adverse weather event, China is not expected to fill its

rice tariff rate quota. In quota tariffs, 1 per cent for grains (including milled rice)

and no more than 10 percent for partially processed grain products. Over-quota

tariffs will be 76 per cent initially reduced to 65 per cent in 2004 (WTO 2001).

Vietnam has no significant production support policies or export subsidy

programme. Vietnam and the other major Asian rice exporters (China, India,

Pakistan and Thailand) have discussed the formation of a rice export cartel in

response to the low world prices for rice since 1999. India rejected the idea, but

the others are developing the concept. The Uruguay Round also forced Japan and

Korea to open their domestic rice markets, and this has led to more imports by

these countries. (On the other hand, Japan has also increased its exports of rice in

recent years, reducing the effect of the AoA on its net trade position.) Generally,

however, there are not many of these examples. In other words, Asia has

liberalized voluntarily it has not been dragged kicking and screaming into the

process (Landes and Gulati 2004).

But because the international rice trade was controlled by the government

during 2000-05, rice was not a tradable commodity (i.e. changes in world prices

did not lead to changes in domestic prices). Thus, while the exchange rate

depreciations increased the NPC, domestic farm prices in real terms were

relatively constant. Although India has officially banned non-basmati exports

since March 2008, it continues to ship its premium basmati rice and sells some

non-basmati rice to selected markets. Despite the expected increase in 2010,

India’s exports are just 35 per cent of its near-record shipments of 2007.

62

The primary producers include India, China, Bangladesh, Thailand,

Indonesia, Vietnam, Myanmar, Philippines, Brazil, Pakistan, United States, and

Japan. The bulk of exports, about 80%, comes from just six countries—Thailand,

Vietnam, India, China, Pakistan, and the United States. Many countries are net

rice importers; but just a few countries where rice is the preferred staple account

for most imports—Indonesia, Philippines, Bangladesh, Malaysia, Japan, Korea,

and the Middle East. The international prices of rice and wheat, Asia’s key staple

foods, have been increasing since 2000. The export price of rice, the staple food of

more than 3 billion Asians, has risen steadily since the start of the new

millennium. The price of rice alone stood at $244/ton in 2004. It jumped to a high

of $764/ton in September 2008, slid down to $611/ton in January 2009, but never

returned to its 2004 level (FAO 2009).

The table-3.1 shows details percentage share of major rice producing

countries in the total world production of rice. India, China, Indonesia,

Bangladesh, Vietnam and Thailand have been the major producers of rice in the

world. Other countries account for a substantial amount of rice production,

Myanmar, Philippines, Brazil, Japan, USA and Pakistan. China accounted for

maximum share in the world production of rice between 1991 and 2010.

However, its share has shown an almost continuous decline during the two

decades from 35.80 per cent in 1991 to 29.50 per cent in 2010. Still it accounts for

the highest share in the world production during the entire period of 20 years.

India stood second in terms of its contribution to world production, India has

indicated a trend of fluctuations during the period of 2 decades from 1991 to

2010.

63

Table-3.1 Percentage share of Major Rice Producing Countries in the Total World Production of Rice. Year India China Indonesia Bangladesh Viet Nam Thailand Myanmar Philippines Brazil Japan USA Pakistan 1991 21.60 35.80 8.62 5.25 3.78 3.93 2.55 1.86 1.83 2.31 1.39 0.94 1992 20.62 35.62 9.13 5.18 4.08 3.77 2.81 1.80 1.89 2.50 1.54 0.88 1993 22.67 33.85 9.07 5.07 4.30 3.68 3.16 1.78 1.90 1.84 1.33 1.13 1994 22.76 33.03 8.65 4.66 4.37 3.92 3.38 1.96 1.96 2.78 1.66 0.96 1995 21.09 34.21 9.09 4.82 4.56 4.02 3.28 1.93 2.05 2.45 1.44 1.09 1996 21.53 34.63 8.98 4.95 4.64 3.93 3.11 1.98 1.52 2.27 1.37 1.14 1997 21.44 35.14 8.56 4.88 4.77 4.09 2.89 1.95 1.45 2.17 1.44 1.13 1998 22.28 34.63 8.50 5.13 5.03 4.05 2.95 1.48 1.33 1.93 1.44 1.21 1999 22.01 32.80 8.33 5.64 5.14 3.96 3.29 1.93 1.92 1.88 1.53 1.27 2000 21.27 31.67 8.66 6.28 5.43 4.31 3.56 2.07 1.85 1.98 1.44 1.20 2001 23.38 29.97 8.43 6.06 5.37 4.43 3.66 2.17 1.70 1.89 1.63 0.97 2002 18.92 30.97 9.04 6.60 6.05 4.58 3.83 2.33 1.84 1.95 1.68 1.18 2003 22.71 27.76 8.92 6.56 5.91 4.62 3.96 2.31 1.77 1.67 1.55 1.24 2004 20.52 29.70 8.90 5.96 5.95 4.70 4.07 2.39 2.18 1.80 1.73 1.24 2005 21.70 28.70 8.54 6.27 5.65 4.77 4.36 2.30 2.08 1.79 1.59 1.31 2006 21.70 28.59 8.49 6.36 5.59 4.62 4.82 2.39 1.80 1.67 1.38 1.27 2007 22.01 28.53 8.70 6.56 5.47 4.89 4.79 2.47 1.68 1.66 1.37 1.27 2008 21.62 28.19 8.78 6.84 5.65 4.61 4.45 2.45 1.76 1.61 1.35 1.52 2009 19.34 29.06 9.49 6.64 5.73 4.64 4.82 2.40 1.86 1.56 1.47 1.52 2010 17.95 29.35 9.88 7.34 5.95 4.70 4.94 2.35 1.68 1.58 1.64 1.08

Source: Food and Agriculture Organisation (FAO), Rome. Note: Production thousand (tonnes) 1991-2010

64

3.2. 2) TREND ANALYSIS OF RICE PRODUCING COUNTRIES DURING 1991-

2010

Table: 3.2 Production of Rice (Country wise) for the Periods from 1991-2010 Linear regression analysis

*p<0.05 Source: calculated by taking the values in table-3.1. The table-3.2 shows details, about the correlation between year of

production, and production is found to be positive and statistically significant in

Bangladesh, Viet Nam, Thailand, Myanmar, Philippines and Pakistan at 5% level

of significance(P<0.05). It means that as year advances with increase in

corresponding production during the year. But a significant and negative

correlation was observed between year of production in China and Japan

(P<0.05). Surprisingly, a non-significant correlation was seen between year of

production and production in India, Indonesia, Brazil and USA at 5% level of

significance (p>0.05).

Country Constant Coefficient t-value p-value R-square

India -2279108526 1.202 3.3636 0.0035* 0.3860

China 53590159 6.690 0.1651 0.8707 0.0015

Indonesia -1650507088 8.515 8.7593 0.0000* 0.8100

Bangladesh -2408203877 1.241 14.7398 0.0000* 0.9235

Viet Nam -2047276441 1.039 22.9156 0.0000* 0.9669

Thailand -1400358060 7.132 23.9690 0.0000* 0.9696

Myanmar -2063602661 1.038 15.5078 0.0000* 0.9304

Philippines -815109767 4.807 12.0926 0.0000* 0.8904

Brazil -293086726 1.578 3.1965 0.0050* 0.3621

Japan 268065730 -1.28 -3.0810 0.0064* 0.3453

USA -274008861 1.41 5.5862 0.0000* 0.6342

Pakistan -435289632 2.21 6.5902 0.0000* 0.7070

65

Table-3.3 Compound Annual Growth Rate and Co-efficient of Variation for Major Rice Producing Countries

Countries/Year *CAGR #CV

1991-2000 2001-2010 1991-2000 2001-2010 India 1.87 0.64 0.32 0.83

China 0.99 1.61 0.39 0.32

Indonesia 1.23 3.03 0.32 0.51

Bangladesh 3.33 3.45 0.90 0.61

Viet Nam 5.55 2.07 1.09 0.40

Thailand 2.92 2.46 0.44 0.26

Myanmar 3.86 5.47 0.98 1.07

Philippines 2.15 2.88 0.87 0.37

Brazil 0.12 1.43 1.38 0.92

Japan -0.61 -0.22 1.40 0.78

USA 1.94 0.53 0.66 0.91

Pakistan 5.36 4.37 1.16 1.35

World 1.83 2.03 0.57 6.51

Source: calculated by taking the values in table-3.1. Note: *CAGR- Compound Annual Growth Rate, #CV- Co-efficient of Variation.

The table-3.3 shows details about Compound annual growth rate of rice

production in India which was at 1.87 per cent during the first decade from 1991

to 2010 and was higher compared to China’s which accounted for 1.61 per cent.

But the CAGR rice production in China was at 1.61 per cent in the second decade

India was higher than India. Indonesia’s share in world production of rice varied

from 8.62 per cent in 1991to 9.88 per cent in 2010. The production of rice in

Indonesia during the two decades has been largely sustained and indicates an

upward trend during the two decades. Indonesia’s CAGR in 1991-2010 decade

has been 1.23 which is above that of China’s (0.99). Its CAGR is much above

than that of India and China i, e. at 3.03 in 2001-10. Rice production in

Bangladesh had a sustained growth during the two decades. Her share in world

production of rice varies. There are marginal fluctuations in the production of rice

of Bangladesh which has been higher than India, China, and Indonesia at 3.3 per

66

cent and 3.45 per cent during the two decades viz 1991-2000 and 2001-10

respectively. This is a significant trend in the rice production of this major rice

producing country. The share of rice production in Vietnam in the world

production of rice has varied at a lower level from 3.78 per cent in 1991 to 5.95

per cent in 2010. However, it is significant to note that the annual growth of rice

production has indicated a continuous rise during the two decades. The CAGR of

rice in Vietnam is the highest at 5.55 per cent in 1991-2000 compared to the

CAGR of all the rice producing countries. However, the CAGR was lower at 2.07

in 2001-10.

The share of rice production in world rice production in Thailand has

indicated a continuous rising trend during the two decades from 1991 to 2010. Its

CAGR’s in 1991-00 and in 2001-10 was 2.92 and 2.46 per cent respectively. They

are higher than the CAGR of India, China and Indonesia but lower than

Bangladesh in 1991-2000 and higher in 2001-10. A relatively lower share in the

world production of rice is accounted for by Myanmar during the period of two

decades between 1991 and 2010. Myanmar share in world rice production varied

from 2.55 per cent in 1991 to 4.94 per cent in 2010. However, it is noteworthy

that there is a trend of continuous rise in the share of rice production in the world

during the corresponding period of two decades. It is significant to find that the

CAGR of rice production of Myanmar is the highest at 5.47 per cent during 2001-

10 compared to other rice producing countries. The CAGR was the second highest

at 3.86 in 1991-00. The share of Philippines in the world production of rice is

much less compared to the other countries like India, China, Indonesia,

Bangladesh, Thailand and Myanmar. The share varied from 1.86 per cent in 1991

to 2.35 per cent in 2010. However, Philippines has been increasing its share in the

world production of rice continuously during the two decades. Its CAGR is more

than that of India and China in the Production of rice during the two decades. The

performance of Brazil is also not very significant in its share in world production

of rice.

Its CAGR is also low during the two decades compared to the other leading

rice producing countries. Japan’s share in world production of rice varied from

67

2.31 per cent in 1991 to 1.58 per cent in 2010. Thus, it shows a declining trend of

its share in world rice production. The CAGR of rice production during the two

decades has been negative. USA’s share in world production of rice varied from

1.39 per cent in 1991 to 1.64 per cent in 2010. Its CAGR too is low. Pakistan’s

share in world production of rice varied from 0.94 per cent in 1991 to 1.08 per

cent in 2010. However, it is significant to note that it’s CAGR is very impressive

at 5.36 per cent in 1991-00 and 4.37 per cent in 2001-10.

However, coefficient of variance (CV) of rice production is calculated.

Indonesia, Vietnam, Thailand and Myanmar, Philippines, Brazil, Japan, USA,

Pakistan are major rice producing countries. Rice production trend among major

countries shows that production decreased by 0.32 per cent annually during 1991-

2000. But 0.83 per cent increase is found in the value of coefficient variation for

the period 2001-10. In absolute terms, China increased the production by from

0.39 per cent increased to 0.32 slightly accounting for the change during 1991-00

to 2001-10. Indonesian trend during 1991-00 was 0.32 per cent but increased to

0.51 per cent during 2001-10. In Bangladesh, Viet Nam it is found be 0.90 per

cent to 1.09 positive variation of value is found during 1991-00. But in same

countries during 2001-10 it is 0.61 per cent to 0.40 per cent. Thailand (0.44),

Myanmar (0.98), Philippines (0.87), Brazil (1.38), compared to other countries

like, Japan (1.40), USA (0.66), Pakistan (1.16) slight trend decline is seen during

1991-00. USA (0.91) and Pakistan (1.35) increased the production of rice,

coefficient value increased comparatively for other countries respectively.

3.2.3) SHARE OF MAJOR RICE PRODUCING COUNTRIES – YIELD PER HECTARE IN WORLD:

The table-3.4 shows details of the yield per hectare of rice in different major

producers of rice. Yield per hectare of rice in major rice producing countries has been

diverse and varied. Yield per hectare of rice in India is much lower compared to other

countries like china, Indonesia, Bangladesh, Viet Nam, Myanmar, Philippines, Japan and

USA. The yield per hectare in India is marginally higher compared to Thailand and

Brazil. The yield per hectare of rice in India varied from 74.31 per cent in 1991 to 74.64

per cent in 2010.

68

Table-3.4 Yield Per Hectare of Rice in Major Rice Producing Countries (in qntls) Year India China Indonesia Bangladesh Viet Nam Thailand Myanmar Philippines Brazil Japan USA Pakistan 1991 74.31 159.08 122.95 75.22 88.06 63.74 81.64 79.89 65.12 165.73 181.72 65.62 1992 72.75 161.60 121.14 74.99 92.97 60.63 81.84 81.94 59.52 174.98 179.26 66.04 1993 78.08 161.29 120.70 75.00 96.05 59.87 84.29 79.29 63.21 126.31 170.39 75.58 1994 78.29 159.30 118.76 69.22 97.45 64.28 86.61 78.89 65.25 185.04 182.71 66.50 1995 73.70 164.53 118.84 72.49 100.83 66.02 81.34 76.63 70.14 173.34 172.19 75.21 1996 74.56 163.92 116.68 72.99 99.57 63.66 80.97 75.44 70.18 172.78 181.21 75.78 1997 74.53 165.29 116.08 71.84 101.53 62.30 80.63 76.81 71.52 168.04 173.12 73.46 1998 75.45 166.39 109.94 76.89 103.68 64.57 81.94 70.67 66.00 162.88 166.20 75.77 1999 76.44 162.58 109.13 82.49 105.28 62.22 83.17 75.63 78.81 164.63 168.74 78.91 2000 73.27 161.01 113.11 89.54 109.06 67.16 86.97 78.86 77.98 172.27 180.95 77.91 2001 79.18 156.34 111.50 86.45 108.90 66.57 86.85 80.98 82.35 168.62 185.02 69.99 2002 67.98 160.71 116.12 90.68 119.27 67.78 88.78 85.21 86.36 171.02 191.57 78.45 2003 79.21 153.98 115.41 90.87 117.85 67.39 90.08 85.61 82.54 148.62 189.93 75.08 2004 73.70 156.26 112.37 87.58 120.26 70.74 93.85 87.02 88.10 158.90 194.02 74.10 2005 77.07 152.80 111.77 92.40 119.47 72.40 91.62 87.67 82.33 162.47 181.43 77.57 2006 77.15 152.47 112.24 93.63 118.90 70.84 92.29 89.51 94.25 153.92 187.82 76.78 2007 78.43 152.49 111.72 95.26 118.41 71.44 91.07 90.25 90.85 154.60 192.13 78.79 2008 78.24 152.22 113.65 92.76 121.27 68.79 86.36 87.54 98.24 157.39 178.16 81.73 2009 70.80 156.74 118.89 93.22 124.34 68.26 88.47 85.36 103.82 155.13 188.88 85.18 2010 74.64 149.72 114.65 95.63 121.68 65.74 94.29 82.82 95.42 148.87 172.34 69.95

Source: Food and Agriculture Organisation (FAO), Rome. Note: Yield in Acre / Ha,

69

Table: 3.5 Yield Per Hectare of Rice (Country wise) for the Periods from

1991-2010 Linear regression analysis Country Constant Coefficient t-value p-value R-square

India -597212 -3.00

5.7455 0.0000* 0.6471

China -699618 3.80

6.7895 0.0000* 0.7192

Indonesia -613401 3.20

6.4701 0.0000* 0.6993

Bangladesh -17737009.030

16.7801 0.0000* 0.9399

Viet Nam -22710621.157

44.2504 0.0000* 0.9909

Thailand -866981 4.460

13.1678 0.0000* 0.9060

Myanmar -11438605.89

13.9515 0.0000* 0.9154

Philippines -1116120-5.74

9.5372 0.0000* 0.8348

Brazil -22626111.10

18.8476 0.0000* 0.9518

Japan -623933 3.40

1.9525 0.0666 0.1748

USA -18131839.42

8.9783 0.0000* 0.8175

Pakistan -967610 4.98

7.7496 0.0000* 0.7694

*p<0.05 Source: calculated by taking the values in table-3.4.

Trend analysis of yield per hectare during 1991-2010:

The table-3.5 shows details correlation between year of yield per hectare

and yield per hectare is found to be positive and statistically significant in

Bangladesh, Viet Nam, Thailand, Myanmar, Philippines, Brazil and Pakistan at

5% level of significance(P<0.05). But a significant and negative correlation was

observed between year of yield per hectare and yield per hectare in China and

Indonesia (P<0.05). Surprisingly, a non-significant correlation was seen between

year of yield per hectare and yield per hectare in India, Japan and USA at 5%

level of significance (p>0.05). The trend lines of yield per hectare during 1991-

2010 are presented in the above table.

70

Table-3.6 Compound Annual Growth Rate and Co-efficient of Variation for Yield Per hectare of rice in major producing countries


1991-2000 2001-2010 1991-2000 2001-2010 India 1.08 1.24 0.42 0.69

China 1.39 0.89 0.44 0.29

Indonesia -0.10 1.51 0.17 0.48

Bangladesh 2.67 2.22 1.04 0.69

Viet Nam 3.17 2.17 0.94 0.66

Thailand 1.69 1.34 0.58 0.53

Myanmar 1.33 1.57 0.48 0.57

Philippines 0.31 1.59 0.34 0.58

Brazil 3.67 3.62 1.21 1.16

Japan 1.69 0.30 1.01 0.39

USA 0.71 0.67 0.40 0.35

Pakistan 3.06 2.03 0.98 0.82

World 1.14 1.31 0.35 0.46


The table-3.6 shows details of CAGR of yield per hectare which was 1.08 per cent

in 1991-00 and 1.24 per cent during 2001-10. The yield per hectare in China was very

high at 159.08 per cent in 1991 and 149.72 per cent in 2010. There is a trend of decline

in China’s yield per hectare of rice since 2001 onwards. The CAGR of China relating to

yield per hectare of rice was 1.39 in 1991-00 and 0.89 per cent in 2001-10. Indonesia

provides another example of declining trend of yield per hectare of rice during the two

decades from 1991 to 2010. The yield varied from 75.22 in 1991 to 95.63 per cent in

2010. The CAGR is the second highest at 2.67 in 1991-00 and 2.22 in 2001-10 next only

to Viet Nam.

The performance of Viet Nam in terms of yield per hectare of rice has been quiet

encouraging. The yield varied from 88.06 in 1991 to 121.68 in 2010. The yield has

71

shown a trend of continuous rise with minor slowdown during the two decades. Its

CAGR was higher at 3.17 in 1991-00 and 2.17 per cent in 2001-10. Thailand’s

performance in terms of yield per hectare of rice during the two decades has been

fluctuating. It varied from 63.74 per cent in 1991 to 65.74 per cent in 2010. The CAGR

of yield per hectare of rice too are lower at 1.69 per cent in 1991-00 and 1.34 in 2001-10.

Thus Thailand’s performance in the direction of yield per hectare of rice and the CAGR

are highly discouraging compared to all other countries reviewed here. The performance

of Myanmar in this direction is slightly better than, Thailand and India, the yield varied

from 81.64 in 1991 to 94.29 per cent 1991-00 and 1.57 in 2001-10. The yield per hectare

of rice in Philippines varied from 79.89 per cent in 1991 to 82.82 per cent in 2010.

However, the yield has not been uniform during the two decades. The CAGR in the yield

per hectare of rice has been lowest at 0.31 per cent in 1991-00. The CAGR of yield per

hectare of rice has been very encouraging. It was 3.67 per cent in 1991-00 and 3.62 per

cent 2001-10. The CAGR of Brazil’s rice yield is the highest compared to all other

countries covered by the study.

Japan’s performance in terms of yield per hectare is much better compared to other

countries except USA. It varied from 165.73 per cent in 1991 to 148.87 per cent in 2010.

However, the CAGR of rice yield of Japan has been low at 1.69 in 1991-00 and 0.30 in

2001-10. Performance of USA has been better than all other countries overall by the

study in terms of yield per hectare of rice during the two decades from 1991 to 2010. It

varied from 181.72 per cent in 1991 to 172.34 per cent in 2010. However, it CAGR has

been very low with 0.71 per cent in 1991-00 and 0.67 per cent in 2001-10. Pakistan’s

performance in terms of yield per hectare of rice has been low compared to majority of

the countries covered by the study varied from 65.62 per cent in 1991 to 69.95 per cent

in 2010. Its CAGR has been very encouraging with 3.06 per cent in 1991-00 and 2.03 per

cent in 2001-10.

72

The value in co-efficient of variation for 1991-2010 decade for India, China,

Indonesia, Bangladesh, Viet Nam, Thailand, Myanmar, Philippines, Brazil, Japan, and

USA, Pakistan. The value of C.V for India is significantly good 0.94 per cent accounted

for like China 0.44 per cent and Viet Nam 0.94 highest yield during 1991-00. Other

countries Bangladesh C.V is 1.04 per cent, Brazil 1.21 per cent the value of C.V slightly

changed during 1991-2000. India accounted for 0.69 per cent to 0.29 per cent declined

yield per hectare during 2000-10. Bangladesh’s C.V was 0.69 per cent and Vietnams

0.66 per cent, Philippines 0.58, Pakistan 6.82 per cent, Vietnam’s coefficient positively

yield per hectare rice production increased respectively for the year 2001-10. Brazils

share was 1.16 per cent and U.S.A’s was 0.35 per cent during 2001-10 to Myanmar 0.48

per cent value of coefficient during 1991-00. India’s CAGR is 1.08 per cent but value of

C.V is 0.69, yield per hectare declined during 1991-00. CAGR accounted for 1.24 per

cent to C.V 0.29 per cent and Pakistan recorded growth rate of 3.06 per cent to 0.98

during 1991-00 and 2001-10.

3.2. 4) SHARE OF MAJOR RICE PRODUCING COUNTRIES – AREA PER HECTARE IN THE WORLD:

The table-3.7 shows details of the share in major rice production in the world in

terms of area per hectare. India ranks first among the countries covered by the study in

terms of the area per hectare in rice production. Its area per hectare for rice production in

the world varied from 29.07 per cent in 1991 to 24.05 per cent in 2010.

73

Table-3.7 Area under Rice cultivation as Percentage of total World’s Cultivated Area of Rice Year India China Indonesia Bangladesh Viet Nam Thailand Myanmar Philippines Brazil Japan USA Pakistan 1991 29.07 22.50 7.01 6.98 4.30 6.17 3.12 2.33 2.81 1.40 0.77 1.43 1992 28.35 22.04 7.53 6.91 4.39 6.22 3.43 2.20 3.18 1.43 0.86 1.34 1993 29.04 20.99 7.52 6.76 4.48 6.14 3.75 2.24 3.01 1.46 0.78 1.49 1994 29.07 20.73 7.29 6.73 4.48 6.09 3.90 2.48 3.00 1.50 0.91 1.44 1995 28.61 20.79 7.65 6.65 4.52 6.09 4.03 2.51 2.92 1.42 0.84 1.45 1996 28.88 21.13 7.70 6.79 4.66 6.17 3.84 2.63 2.16 1.32 0.76 1.50 1997 28.77 21.26 7.37 6.79 4.70 6.56 3.58 2.54 2.02 1.29 0.83 1.53 1998 29.53 20.81 7.73 6.67 4.85 6.27 3.60 2.09 2.02 1.19 0.87 1.60 1999 28.80 20.18 7.63 6.83 4.88 6.36 3.96 2.55 2.43 1.14 0.91 1.60 2000 29.02 19.67 7.66 7.01 4.98 6.42 4.09 2.62 2.37 1.15 0.80 1.54 2001 29.53 19.17 7.56 7.01 4.93 6.66 4.22 2.67 2.07 1.12 0.88 1.39 2002 27.83 19.27 7.79 7.28 5.07 6.75 4.31 2.73 2.13 1.14 0.88 1.50 2003 28.68 18.03 7.73 7.22 5.02 6.86 4.40 2.70 2.14 1.12 0.82 1.66 2004 27.84 19.01 7.92 6.81 4.95 6.64 4.34 2.74 2.48 1.13 0.89 1.67 2005 28.16 18.78 7.64 6.79 4.73 6.60 4.76 2.63 2.53 1.10 0.88 1.69 2006 28.13 18.75 7.57 6.79 4.70 6.53 5.23 2.67 1.91 1.08 0.73 1.66 2007 28.07 18.71 7.79 6.88 4.62 6.84 5.26 2.74 1.85 1.07 0.71 1.61 2008 27.63 18.52 7.73 7.37 4.66 6.71 5.15 2.80 1.79 1.02 0.76 1.86 2009 27.32 18.54 7.98 7.12 4.61 6.79 4.96 2.81 1.79 1.01 0.78 1.79 2010 24.05 19.60 8.62 7.68 4.89 7.15 5.24 2.83 1.76 1.06 0.95 1.54

Source: Food and Agriculture Organisation, Rome. Note: Acre in / Ha.

74

Table: 3.8 Area Under rice Cultivation (Country wise) for the Periods from 1991-

2010 Linear regression analysis Country Constant Coefficient t-value p-value R-square India 125345918.35 -4.10 -0.5774 0.5708 0.0182

China 389482735 -1.72 -3.9336 0.0010* 0.4623

Indonesia -188714789 1.06 7.5347 0.0000* 0.7593

Bangladesh -144181601 7.71 6.0051 0.0000* 0.6670

Viet Nam -100322670 5.37 4.9732 0.0001* 0.5788

Thailand -199465381 1.04 13.9341 0.0000* 0.9152

Myanmar -354952833 1.80 11.8865 0.0000* 0.8870

Philippines -112261840 5.80 7.5422 0.0000* 0.7596

Brazil 165310189 -8.08 -5.0128 0.0001* 0.5826

Japan 63285408 -3.07 -9.3978 0.0000* 0.8307

USA -5907442 3.55 0.9158 0.3719 0.0445

Pakistan -66319427 3.43 5.4125 0.0000* 0.6194

*p<0.05 Source: calculated by taking the values in table-3.7.

Trend analysis of area harvested during 1991-2010:

The table-3.8 shows details, the correlation between year of area harvested and

area harvested is found to be positive and statistically significant in Indonesia,

Bangladesh, Viet Nam, Thailand, Myanmar, Philippines and Pakistan at 5 per cent level

of significance(P<0.05). But a significant and negative correlation was observed between

year of area harvested and area harvested in India, China, Brazil, and Japan (P<0.05). It

means that as year advances with decrease in corresponding area harvested during the

year. Surprisingly, a non-significant correlation was seen between year of area harvested

and area harvested in USA at 5 per cent level of significance (p>0.05).

\

75

Table-3.9 Compound Annual Growth Rate and Co-efficient of Variation for Area Under rice cultivation as percentage of total worlds cultivated area of rice


1991-2000 2001-2010 1991-2000 2001-2010 India 0.78 -0.59 0.26 0.54

China -0.40 0.72 0.28 0.32

Indonesia 1.34 0.09 0.46 0.50

Bangladesh 0.65 1.20 0.30 0.50

Viet Nam 2.31 -0.10 0.70 0.13

Thailand 1.21 1.11 0.43 0.37

Myanmar 2.50 3.42 0.94 1.12

Philippines 1.83 1.26 0.92 0.44

Brazil -3.42 -2.11 1.70 1.37

Japan -2.26 -0.52 1.00 0.42

USA 1.22 -0.14 0.67 0.97

Pakistan 2.23 2.29 0.55 0.83

World 0.69 0.60 0.23 0.28


The table-3.9 shows details, CAGR in this context was poor at 0.78 per

cent in 1991-00 and -0.59 in 2001-10. Next to India, China had a better average

whose area per hectare of rice production in the world varied from 23.50 per cent

in 1991 to 19.60 per cent in 2010. Its CAGR too has been low at -0.40 in 1991-00

and 0.72 per cent in 2001-10. Indonesia accounts for the third rank in terms of

area per hectare in rice production in the world. The area per hectare varied from

7.01 per cent in 1991 to 8.62 per cent in 2010. Its CAGR was better at 1.34 per

cent in 1991-00 and 0.09 in 2001-10. Bangladesh has steadily increased its share

from 6.89 per cent in 1991 to 7.68 per cent in 2010 with a CAGR of 0.65 per cent

76

in 1991-00 and 1.20 per cent in 2001-10. The share of rice producing area per

hectare in the world for Viet Nam varied from 4.30 in 1991 to 4.89 in 2010. Its

CAGR in 1991-00 was good at 2.31 but was negative at -0.10 in 2001-

10.Thailand has a better position with its share of area per hectare at 6.17 per cent

in 1991 and 7.15 per cent in 2010. Its CAGR in 1991-00 was 1.21 and in 2001-10

was 1.11 per cent. Myanmar ranks lower in this direction with its area per hectare

of rice production at 3.12 per cent in 1991 and 5.24 per cent in 2010. The increase

trend of area per hectare in the rice production is significant. Its CAGR was 2.50

per cent in 1991-00 and 3.42 per cent in 2001-10. This is the highest CAGR of all

others countries covered by the study. Philippines has a lower rank in terms of

rice producing area per hectare in the world at 2.33 per cent in 1991 and 2.83 in

2010. There is a very slow increase in the area during the two decades. The

CAGR was 1.83 per cent in 1991-00 and 1.26 per cent in 2001-10. Brazil has

experienced a declining trend in the rice production area per hectare in the world

during the two decades. It slumped from 2.81 per cent in 1991 to 1.76 per cent in

2010. Its CAGR has been negative at -3.42 per cent in 1991-00 and -2.11 in 2001-

10. Japan provides a still poor picture in this direction with its share in terms of

area per hectare in rice production in the world at 1.40 per cent in 1991 and 1.06

per cent in 2010. Its CAGR has been negative at -2.26 in 1991-00 and -0.52 in

2001-10. USA’s share in terms of area per hectare in rice production in the world

has stagnated at a low level. It varied from 0.77 per cent in 1991 to 0.95 per cent

in 2010. Its CAGR was 1.22 in 1991-00 and negative at -0.14 in 2001-10.

Pakistan has also stagnated in terms of area per hectare of rice production in the

77

world during the two decades from 1991 to 2010. It varied from 1.43 per cent in

1991 to 1.54 per cent in 2010. It’s CAGR to 1.54 per cent in 2010. Its CAGR was

good at 2.23 in 1991-00 and 2.29 in 2001-10.

However, value of co-efficient area under rice cultivation of as percentage

of total world’s cultivated area of rice. Indian value of coefficient is less i, e., 0.26

per cent compared i., e. to China 0.28 per cent during 1991-00 and 2001-10.

Indonesia accounted for 0.46per cent to 0.50 per cent and Bangladesh 0.30 per

cent to 0.50 per cent of value of coefficient increase of area during 2001-10. But

Viet Nam accounted for in 0.70 per cent 1991-00 to 0.13 per cent decline during

the recent year 2001-10. Myanmar accounted for 0.94 per cent to 1.12 per cent

and Japan 1.00 per cent to C.V 0.42 per cent, decline area did not change during

1991-00 to 2001-10. CAGR of India is -0.59 per cent compared to Japan i. e., -

0.52, U.S.A accounted for -0.14 per cent negative area decline during 1991-00.

But value of co-efficient got positively changed during 2001-10.

3.2.5) SHARE OF MAJOR RICE CONSUMPTION COUNTRIES – CONSUMPTION:

The table-3.10 shows details share of rice consumption in the total

production in major rice producing countries is very high, rice is consumed

domestically in all the major rice producing countries in the world. Consumption

of rice in India accounted for more than 90 per cent of the total production during

the decades from 1991 to 2009. Consumption ranged from 99.39 per cent in 1991

to 98.38 per cent in 2009. Similarly in China the share of rice consumption in its

total production varied from 99.56 per cent in 1991 to 99.68 per cent in 2009. In

Indonesia the consumption of rice varied between 99.29 per cent in 1993 to 100

78

per cent in 2009. Consumption of rice in Bangladesh accounted for 100 per cent

of production in 1991 and 99.99 per cent in 2009. In Viet Nam consumption of

rice varied from a minimum of 85.35 per cent in 2005 and a maximum of 94.74

per cent in 1991 during the two decades from 1991 to 2009. Thailand provides a

picture comparative, lower percentage of rice consumption in relation to total

production consumption of rice varied between a minimum of 72.60 per cent of

production in 2008 to a maximum of 94.74 per cent in 1991 during the two

decades. Consumption of rice has been high in relation to production in Myanmar.

It varies from 98.03 per cent to 99.87 per cent high percentage of consumption of

rice in relation to production is found in case. In Philippines consumption of rice

in relation to production varied between a minimum of 99.63 per cent and a

maximum of 100 per cent during the two decades from 1991 to 2009. In Brazil

consumption of rice in relation to production varied from 97.23 per cent to 99.99

per cent during two decades consumption of rice in USA has been lower in

relation to production compared to other countries. It varied from a minimum of

73.08 per cent to a maximum of 85.16 per cent during the corresponding period.

In Pakistan consumption of rice in relation to production has been still lower

compared to USA and other countries. It ranged from a minimum of 54.78 per

cent to a maximum 82.78 per cent during the two decades from 1991 to 2009.

79

Table-3.10 Percentage share of major rice consumption countries in the total world consumption of rice Year/ Avg India China Indonesia Bangladesh Viet Nam Thailand Myanmar Philippines Brazil USA Pakistan 1991 99.39 99.56 100.00 100.00 94.74 82.45 98.72 99.90 99.99 77.98 75.24 1992 99.47 99.45 99.91 100.00 90.99 76.50 98.66 99.63 99.97 79.52 67.66 1993 99.36 99.19 99.29 100.00 92.46 77.79 98.43 100.00 99.89 73.08 82.78 1994 99.27 99.46 99.66 100.00 91.57 79.79 94.87 100.00 99.99 77.74 80.96 1995 95.76 99.87 100.00 100.00 92.04 74.87 98.03 100.00 99.98 71.25 68.87 1996 97.95 99.87 100.00 100.00 88.62 78.78 99.48 100.00 99.99 77.05 75.21 1997 98.12 99.53 100.00 100.00 87.01 80.01 99.83 100.00 99.99 82.32 72.81 1998 96.21 98.16 100.00 100.00 87.20 75.52 99.29 100.00 99.94 82.71 71.88 1999 98.63 98.67 100.00 100.00 85.64 76.18 99.73 100.00 99.81 84.18 76.84 2000 98.80 98.48 100.00 100.00 89.31 79.56 98.82 100.00 99.88 84.30 72.01 2001 98.47 98.93 100.00 100.00 88.38 75.93 95.72 100.00 99.84 85.16 58.37 2002 95.39 98.89 100.00 100.00 90.59 76.96 96.36 100.00 99.87 82.60 74.93 2003 97.46 98.49 100.00 100.00 88.97 74.12 98.32 100.00 99.93 79.05 74.97 2004 96.26 99.57 100.00 100.00 88.76 69.81 99.26 100.00 99.96 84.11 75.82 2005 97.22 99.69 99.92 99.99 85.35 80.05 99.35 100.00 99.76 77.43 65.25 2006 96.81 99.41 100.00 99.98 87.05 79.77 99.77 99.99 99.50 77.92 54.78 2007 95.75 99.38 100.00 99.98 87.32 76.92 98.86 100.00 99.49 81.18 62.50 2008 98.33 99.58 100.00 99.99 87.77 72.60 99.87 99.99 97.35 81.54 75.07 2009 98.38 99.68 100.00 99.99 91.23 78.06 99.87 100.00 97.23 82.90 75.61

Source: Food and Agriculture Organisation, Rome.

82

3.2.6. COMBINED INFLUENCE OF PRODUCTION AND CONSUMER PRICE, PRODUCER PRICE ON CONSUMPTION OF RICE:

Table-3.11 Multiple Regression Analysis of Consumption of Rice

India Indpt variables Coefficients t Stat P-value R-square Intercept 96.6176 28.8082 0.0000

0.31 Production 0.0100 0.7432 0.4681 Consumer price -0.0313 -2.6193 0.0186 Producer price 0.0076 1.7132 0.1060 China Indpt variables Coefficients t Stat P-value R-square Intercept 98.8723 44.5681 0.0000

0.10 Production 0.01500 0.1894 0.8522 Consumer price -0.0064 -0.9356 0.3634 Producer price 0.0025 1.2529 0.2282 Indonesia Indpt variables Coefficients t Stat P-value R-square Intercept 100.1950 144.7415 0.0000

0.14 Production 0.200 -0.5118 0.6158 Consumer price 0.1600 1.1680 0.2599 Producer price -0.0001 -0.0649 0.9491 Bangladesh Indpt variables Coefficients t Stat P-value R-square Intercept 100.0083 7117.5165 0.0000

0.53 Production 0.0300 0.8038 0.4333 Consumer price -0.0002 -1.6787 0.1126 Producer price 0.0000 -0.5624 0.5817 Thailand Indpt variables Coefficients t Stat P-value R-square Intercept 80.9894 16.1752 0.0000

0.09 Production 0.0100 0.0202 0.9841 Consumer price -0.0517 -0.4140 0.6844 Producer price 0.0058 0.4296 0.6732 Philippines Indpt variables Coefficients t Stat P-value R-square Intercept 99.8841 687.5053 0.0000

0.15 Production 0.0200 -0.3620 0.7221 Consumer price 0.0015 0.8240 0.4221 Producer price 0.0002 0.5102 0.6169 Pakistan Indpt variables Coefficients t Stat P-value R-square Intercept 67.5106 7.7474 0.0000

0.23 Production 0.0100 1.5486 0.1410 Consumer price -0.1726 -2.1156 0.0504 Producer price -0.0131 -0.2200 0.8286

*p<0.05 Source: computed from the data given in faostat.com table-3.10

The table-3.11 provides multiple linear regression equation predicting the

consumption of rice (Y) of India in terms of production (X1), consumer price (X2) and

83

producer price (X3) was found to be lower: Consumption of rice of India (Y) =

96.6176+0.0000X1-0.0313X2+0.0076X3. The multiple R of the linear regression

equation is 0.5622 and coefficient of multiple determination of R2 is 0.3161. The

multiple linear regression equation predicting the consumption of rice (Y) of China in

terms of production (X1), consumer price (X2) and producer price (X3) was found to be

under: Consumption of rice of China is (Y) = 98.8723+0.0000X1-0.0064X2+0.0025X3.

The multiple R of the linear regression equation is 0.3248 and coefficient of multiple

determination of R2 is 0.1055. The multiple linear regression equation predicting the

consumption of rice (Y) of Indonesia in terms of production (X1), consumer price (X2)

and producer price (X3) was found to be under: Consumption of rice of Indonesia is (Y)

= 100.1950+0.0000X1+0.0016X2-0.0001X3. The multiple R of the linear regression


multiple linear regression equation predicting the consumption of rice (Y) of Bangladesh

in terms of production (X1), consumer price (X2) and producer price (X3) was found to

be under: Consumption of rice of Bangladesh is calculated as (Y) =

100.0083+0.0000X1-0.0002X2+0.0000X3. The multiple R of the linear regression


multiple linear regression equation predicting the consumption of rice (Y) of Thailand in


under: Consumption of rice of Thailand (Y) = 80.9894+0.0000X1-0.0517X2+0.0058X3.

The multiple R of the linear regression equation is 0.3053 and coefficient of multiple

determination of R2 is 0.0932. The multiple linear regression equation predicting the

consumption of rice (Y) of Philippines in terms of production (X1), consumer price (X2)

and producer price (X3) was found to be under: Consumption of rice of Philippines is

(Y) = 99.8841+0.0000X1+0.0015X2+0.0002X3. The multiple R of the linear regression


multiple linear regression equation predicting the consumption of rice (Y) of Pakistan in


under: Consumption of rice of Pakistan is calculated (Y) = 67.5106+0.0000X1+-

0.1726X2-0.0131X3. The multiple R of the linear regression equation is 0.4812 and

coefficient of multiple determination of R2 is 0.2315.

84

3.3. ANALYSIS OF INDIA’S RICE EXPORTS:

The ear of globalization since the late 1940s has dramatically changed the

world’s trading patterns, as well as the measures employed by countries to

survive in a world where trade is being liberalized. Asia is the home of many of

the world’s top rice exporters, which accounts for 76 per cent of rice exported

each year. Prices are shooting up worldwide in part because many of these

countries have cut back on exports due to fears of shortage. International trade

in rice is quite small relative to total production. In fact, only 6 to 7 per cent of

global rice production is traded each year, well below the trade shares for other

grains factors. The reasons for these market characteristics could be explained by

several factors. Firstly, rice is largely produced in Asia countries, where rice is

traditionally the major food source for nutrition. Secondly, besides being a major

producing region, Asian countries are major importers of rice. Because of

national security concerns, rice production and trade are highly protected and

sensitive.

The details in table No.3.12 indicate some significant trends about export‐

production relationship of rice in different regions. Exports production ratio

indicates the level of export intensity in relation to the total production of the

export commodity from a country. High percentage of export to total production

indicates lower percentage of domestic consumption of the commodity and rice

versa. Rice is one of the staple food products produced and exported by a host of

85

Asian and North‐America countries. Among the major exporters of rice Pakistan

occupies a predominant position as its exports of rice in relation to production

are the highest compared to the other countries. Exports of rice from Pakistan

varied from a minimum of 17.22 per cent in 1993 to a maximum of 45.22 per

cent in 2006 in relation to its total production of rice. Thus, exports constitute an

important component in foreign trade of Pakistan. USA and Thailand occupy the

next important place as exporters of rice. USA’s exports of rice during the first 6

years i.e., from 1991 to 1996 were higher than export of rice from Thailand.

However, the latter accounts for much higher percentage of rice exports in total

production compared to USA in later period. Vietnam happens to be the fourth

important exporter of rice in relation to its domestic production followed by

India. Rice exports from India in relation to its total production have indicated a

declining trend since 1995. While exports of rice as percentage total production

from Vietnam indicate a rising trend during the later period i.e., from 1996

onwards. Myanmar and China have been exporting rice on a moderate scale and

their share of exports in their domestic production is not substantial. Similarly

exports of rice from Brazil have been marginal as they constitute less than 1 per

cent of its total domestic production exports from Indonesia and Bangladesh is

negligible.

86

Table‐3.12 Share of rice exports as percentage of total rice production in respective counties (Percentage)

Year

India China Indonesia Bangladesh Viet Nam Thailand Myanmar Philippines Brazil USA Pakistan

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in Prod

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in Prod

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in

Prod

Percentage

Share of

Exports in

Prod

1991 6.05 0.44 0.00 0.00 5.26 17.55 1.28 0.10 0.01 22.02 24.76

1992 5.32 0.55 0.09 0.00 9.01 23.50 1.34 0.37 0.03 20.48 32.34

1993 6.38 0.81 0.71 0.00 7.54 22.21 1.57 0.00 0.11 26.92 17.22

1994 7.26 0.54 0.34 0.00 8.43 20.21 5.13 0.00 0.01 22.26 19.04

1995 4.24 0.13 0.00 0.00 7.96 25.13 1.97 0.00 0.02 28.75 31.13

1996 2.05 0.13 0.00 0.00 11.38 21.22 0.52 0.00 0.01 22.95 24.79

1997 1.88 0.47 0.00 0.00 12.99 19.99 0.17 0.00 0.01 17.68 27.19

1998 3.79 1.84 0.00 0.00 12.80 24.48 0.71 0.00 0.06 17.29 28.12

1999 1.37 1.33 0.00 0.00 14.36 23.82 0.27 0.00 0.19 15.82 23.16

2000 1.20 1.52 0.00 0.00 10.69 20.44 1.18 0.00 0.12 15.70 27.99

87

2001 1.53 1.07 0.00 0.00 11.62 24.07 4.28 0.00 0.16 14.84 41.63

2002 4.61 1.11 0.00 0.00 9.41 23.04 3.64 0.00 0.13 17.40 25.07

2003 2.54 1.51 0.00 0.00 11.03 25.88 1.68 0.00 0.07 20.95 25.03

2004 3.74 0.43 0.00 0.00 11.24 30.19 0.74 0.00 0.04 15.89 24.18

2005 2.78 0.31 0.08 0.01 14.65 19.95 0.65 0.00 0.24 22.57 34.75

2006 3.19 0.59 0.00 0.02 12.95 20.23 0.23 0.01 0.50 22.08 45.22

2007 4.25 0.62 0.00 0.02 12.68 23.08 1.14 0.00 0.51 18.82 37.50

2008 1.67 0.42 0.00 0.01 12.23 27.40 0.13 0.01 2.65 18.46 24.93

2009 1.62 0.32 0.00 0.01 8.77 21.94 0.13 0.00 2.77 17.10 24.39

Source: Calculated from www.fao.org Note: Production (000’ tones) 1961‐2009, Export in Quantity in 000’ tones 1961‐2008

Japan Not Available in Export Data – Rice Milled Data

88

3.3.1) MOVEMENT IN VALUE OF RICE EXPORTS:

Table‐3.13 Provides the details of share of rice milled in major exporting

countries in world exports (Value in US$ million). Major countries in terms of

compound annual growth rate (CAGR) the share in rice milled exports in the

world export in terms of value are Philippines, Indonesia, Bangladesh and

Myanmar. The average CAGR of exports value of these countries ranged

between a minimum of 11.76 of Myanmar and a maximum of 24.29 of

Philippines during 1991‐00. Other countries with substantial CAGR of exports

were China, India and Vietnam. The coefficient of variation value rice export in

value terms of India was the highest at 45.23 followed by Indonesia 22.57,

Philippines 13.68 and Bangladesh 10.20 during 2001‐09. The CV during 2001‐09

of other countries viz., China 3.11, Vietnam 6.00, Thailand 5.90, USA 4.59 and

Pakistan 5.50 were at a lower side. Share in world export and India’s exports of

milled rice in terms of value have been higher since 1995 onwards. They varied

between 7.79 and 24.10 during the two decades from 1991 and 2009. China’s

exports have been comparatively lower varying between 0.87 and 11.42 per cent

exports of milled rice in terms of value from Indonesia and Bangladesh have

been negative or marginal during the corresponding period. Vietnam’s exports

have picked up since 1996 till 2009 and averaged at 15.29 during 1991‐00, and

17.58 during 2001‐09. Thailand’s exports of milled rice in value terms are the

highest during the entire period i.e., from 1991 to 2009. Exports in terms of value

of milled rice have been marginal during the same period Exports of milled rice in

value terms from USA and Pakistan have been substantial during the two

decades.

89

Table‐3.13 SHARE OF RICE EXPORTING COUNTRY AS PERCENTAGE OF TOTAL WORLD EXPORTS OF RICE (Percentage)

Year India China Indonesia Bangladesh Viet Nam Thailand Myanmar Philippines Brazil USA Pakistan

1991 8.80 5.16 0.00 0.00 6.66 29.78 1.06 0.07 0.03 16.20 9.80

1992 8.33 5.21 0.19 0.00 9.39 29.82 0.92 0.19 0.04 13.54 9.27

1993 9.82 6.10 1.34 0.00 8.66 28.14 1.03 0.00 0.12 14.12 7.64

1994 7.79 5.70 0.52 0.00 8.58 28.84 4.22 0.00 0.01 15.37 4.88

1995 22.22 0.87 0.00 0.00 8.34 28.08 1.22 0.00 0.02 11.86 7.28

1996 14.20 1.43 0.00 0.00 13.69 28.87 0.33 0.00 0.01 11.51 8.24

1997 14.06 3.91 0.00 0.00 13.61 30.02 0.09 0.00 0.01 9.68 7.50

1998 19.12 11.42 0.00 0.00 13.07 24.37 0.34 0.00 0.04 7.61 7.28

1999 11.17 9.65 0.00 0.00 15.97 26.50 0.16 0.00 0.14 8.67 9.21

2000 12.16 9.85 0.00 0.01 12.41 27.47 0.60 0.00 0.08 9.02 9.93

2001 13.90 6.37 0.01 0.01 12.48 27.35 2.23 0.00 0.09 8.88 10.41

2002 21.89 6.42 0.00 0.00 13.21 25.49 1.74 0.00 0.07 8.18 8.38

2003 15.50 7.84 0.00 0.00 12.56 27.40 0.96 0.00 0.05 9.92 9.80

2004 19.65 2.46 0.00 0.00 12.89 32.13 0.43 0.00 0.03 9.36 8.51

2005 17.11 2.20 0.11 0.03 17.64 24.59 0.47 0.00 0.12 10.12 11.67

90

2006 17.06 3.90 0.01 0.03 14.58 25.17 0.20 0.00 0.20 9.05 13.14

2007 24.20 3.36 0.00 0.02 12.98 25.38 0.79 0.00 0.19 7.19 9.79

2008 15.49 2.26 0.00 0.03 17.41 32.21 0.14 0.00 1.32 7.29 9.66

2009 15.66 2.47 0.01 0.01 11.00 29.32 0.16 0.00 1.30 9.67 12.02

2010 11.79 2.15 0.00 0.02 16.68 27.23 0.22 0.00 0.81 12.09 11.06

Source: Calculated from www.fao.org. Note: Export in Value (million dollars $) 1961‐2008, *Japan is Not Available in Export Data – Rice Milled Data *

CAGR (Compound Annual Growth Rate), #CV (Co‐efficient Variation) Note: (Value in million dollars)

91

Table‐3.14 Compound Annual Growth Rate And Co‐Efficient Of Variation For Rice Exporting

Country As Percentage Of Total World Exports Of Rice

Countries/Year

*CAGR #CV

1991‐2000 2001‐2010 1991‐2000 2001‐2010

India 12.75 14.73 5.64 4.28

China 14.91 2.90 7.73 2.71

Indonesia ‐58.98 12.17 20.35 20.65

Bangladesh 36.45 40.40 17.02 8.35

Viet Nam 15.29 18.98 4.48 6.04

Thailand 5.02 17.74 1.99 5.42

Myanmar ‐14.31 ‐11.65 11.76 6.48

Philippines ‐30.13 85.83 24.29 13.51

Brazil 14.11 70.31 10.59 14.04

USA ‐1.62 18.05 1.45 6.08

Pakistan 7.19 19.52 2.57 5.39

Source: calculated by taking the values in table‐3.4.

Note: *CAGR‐ Compound Annual Growth Rate, #CV‐ Co‐efficient of Variation.

ANALYSIS OF RICE EXPORT THROUGH GROWTH RATE AND CO‐EFFICIENT OF

VARIATION IN VALUE:

Table‐3.14 provides the details of imports of milled rice share of imports

in world imports (in value). It is important to note from Table‐ 3.14 that India is

not an importer of rice even if it imports, it imports only marginal quantity’s of

rice. The value of imports of milled rice by Sri Lanka was lower which varied

92

between 0.01 and 1.20 during 1991 to 2009. Benin’s imports value ranged

between 0.23 and 1.91 during the same period imports value of milled rice by

Saudi Arabia varied between 3.98 in 1992 and 9.79 in 2009. Oman, Kuwait and

Syrian Republic have been marginal importers of milled rice. Imports of milled

rice by Malaysia varied between 1.72 and 4.17. UAE’s imports value of milled rice

varied between 1.39 and 6.99 during the two decades i.e., from 1991‐2009.

Canada’s imports of milled rice were lower and varied between 1.35 and 1.98

during the corresponding period. Imports value of Cote d’ Ivoire varied between

1.09 and 3.76 per cent. Oman has led other countries in terms of value of

coefficient of variation of share of rice milled imports in the world imports with

92.31 during 2001‐09 followed by UAE with 88.91, Malaysia 78.64, Sri Lanka

77.67, Kuwait 63.91, Benin 59.99, Cote d’ Ivore 57.59, Saudi Arabia 56.83, Syrian

Arab Republic 52.21, and Canada 40.33.

93

Table‐3.15 SHARE OF RICE IMPORTING COUNTRY AS PERCENTAGE OF TOTAL IMPORTING OF RICE (Percentage)

Year Sri

Lanka Benin

Saudi

Arabia Oman Kuwait Malaysia UAE Canada

Côte

d’Ivoire

Syrian Arab

Republic World

1991 0.71 1.05 4.33 1.08 0.43 2.74 3.77 1.41 2.80 03 100

1992 0.32 1.57 3.98 0.98 0.33 3.42 3.00 1.47 2.58 1.16 100

1993 0.46 1.93 6.83 0.69 1.32 3.14 3.43 1.35 2.54 1.00 100

1994 0.39 1.91 7.62 1.13 1.36 2.65 5.03 1.47 2.86 1.11 100

1995 0.03 1.25 5.46 0.87 1.59 2.68 2.99 1.56 1.81 1.01 100

1996 0.01 1.13 5.19 0.70 1.13 2.65 3.75 1.37 1.68 1.09 100

1997 0.77 0.81 5.59 0.64 1.04 3.25 2.84 1.35 1.20 0.95 100

1998 1.20 0.50 7.63 0.89 1.32 4.17 2.47 1.86 1.78 1.48 100

1999 0.51 0.34 7.16 0.72 1.18 3.32 2.53 1.45 1.56 0.69 100

2000 0.65 0.34 7.24 0.88 1.31 2.78 3.28 1.51 1.09 0.77 100

2001 0.07 0.23 9.75 1.16 1.71 3.49 3.24 1.98 1.53 1.13 100

2002 0.23 0.32 8.19 1.13 1.68 3.02 4.37 2.02 2.19 1.35 100

2003 0.36 0.41 6.55 1.05 1.17 2.54 4.22 1.78 2.08 0.77 100

2004 0.15 0.66 6.25 0.87 1.00 1.72 4.46 1.90 2.21 1.07 100

2005 0.97 0.80 8.00 0.98 1.27 2.02 4.91 2.02 2.50 0.68 100

2006 0.22 1.48 7.74 0.98 1.38 2.59 1.39 1.82 3.23 1.26 100

2007 0.07 0.62 6.33 0.91 1.47 2.54 5.39 1.67 2.88 0.95 100

94

2008 0.54 0.52 6.10 0.99 1.73 2.40 6.95 1.63 2.59 0.92 100

2009 0.23 0.74 9.79 1.13 2.11 4.04 6.08 1.83 3.76 1.35 900

*1991‐00 9.06 ‐17.39 12.01 6.48 14.91 7.18 3.41 8.42 ‐2.77 3.68 5.89

*2001‐2009 14.17 24.94 18.05 21.34 22.68 23.60 26.13 13.95 21.88 14.94 15.91

*2001‐2010 17.95 20.70 18.22 15.74 21.30 22.50 24.36 15.07 20.97 19.27 17.45

#1991‐00 CV 92.57 51.96 34.17 21.62 33.53 29.04 21.11 25.12 17.79 24.10 22.26

#2001‐09 CV 77.67 59.99 56.83 92.31 63.91 78.64 88.91 40.33 57.59 52.21 43.41

#2001‐10 CV 7.68 5.57 5.74 8.82 6.12 7.31 8.11 4.72 5.76 7.57 5.39

Source: Calculated from www.fao.org Note: Major Import Value: 000’ in million dollars $, *‐ Compound annual growth rate (CAGR), # co‐

efficient Variation (CV)

95

3.3.2). ANALYSIS OF INDIA’S RICE IMPORTS: MOVEMENT IN VALUE OF

IMPORTS:

Table‐3.16 Compound Annual Growth Rate And Co‐Efficient Of Variation For Rice Exporting

Country As Percentage Of Total World Exports Of Rice

Countries/Year

*CAGR #CV

1991‐2000 2001‐2010 1991‐2000 2001‐2010

Sri Lanka 9.06 17.95 92.57 7.68

Benin ‐17.39 20.70 51.96 5.57

Saudi Arabia 12.01 18.22 34.17 5.74

Oman 6.48 15.74 21.62 8.82

Kuwait 14.91 21.30 33.53 6.12

Malaysia 7.18 22.50 29.04 7.31

UAE 3.41 24.36 21.11 8.11

Canada 8.42 15.07 25.12 4.72

Côte d’Ivoire ‐2.77 20.97 17.79 5.76

Syrian Arab

Republic 3.68 19.27 24.10 7.57

World 5.89 17.45 22.26 5.39

Source: calculated by taking the values in table‐3.4.

Note: *CAGR‐ Compound Annual Growth Rate, #CV‐ Co‐efficient of Variation.

Table‐3.16 provides the details of major importers and their percentage of

share in world import (value in 000’ $). The import of rice by different major

importers during the 5 decades between 1961‐70 and 2000‐08 has indicated

some significant trends. The imports of rice by Sri Lanka which topped the list of

96

major importers have shown a continuous decline during the above period. Its

share declined from 58.71 per cent during 1961‐70 to 29.37 per cent in 1971‐80,

4.94 per cent in 1981‐90, 4.41 per cent in 1991‐00 and to 2.82 per cent during

2000‐08. Malaysia’s share declined from 48.90 per cent during 1961‐70 to 21.46

per cent during 2000‐08. Saudi Arabia’s share in world imports of rice on the

other hand rose from 26.71 per cent during 1961‐70 to 57.35 per cent during

2000‐08. UAE’s share in world imports rose from 3.60 during 1961‐70 to 42.28

per cent in 2000‐08. Cote d’Ivoire’s share rose from 7.89 per cent to 20.04 per

cent during the corresponding period. Canada’s share went up from 4.03 per

cent to 14.54 per cent. Kuwait share increased from 6.77 to 11.50 per cent

during the above period. Imports by Syrian Republic too rose from 5.08 per cent

in 1961‐70 to 7.65 per cent during 2000‐08. Oman’s imports rose from 1.05 per

cent during 1961‐70 to 9.37 per cent during 2000‐08.

3.3.3. DIRECTIONS OF MAJOR PRODUCING COUNTRIES TO MAJOR EXPORTING COUNTRIES:

Table‐3.17 India’s rice exports as percentage of total exports of rice to major rice importing

countries of the world

Source: www. Calculated comtrade.com database, Note: Classification SITC Rev‐2, Code ‐ 042

Table‐3.17 provides details about exporting countries. India’s rice exports

during the last four decades has indicated some significant trends, United Arab

Emirates has been a major importer of rice from 1978 to 2009. The value of

Countries/ Year

1978 1980 1990 2000 2009

Value

Value

Value

Value

Value

UAE 17.39 5.09 4.33 3.94 20.70

Kuwait 12.76 6.33 7.87 2.28 3.13

Oman 10.81 2.67 1.04 2.78 NA

Qatar 7.37 NA NA 0.42 0.40

Bahrain 6.43 NA NA 1.75 NA

Saudi Arabia 5.06 8.61 47.98 24.86 27.78

UK 4.71 7.12 7.63 5.63 2.58

USA 1.61 4.00 4.15 2.33 0.74

USSR 36.56 NA NA NA NA

Singapore 1.50 22.72 1.06 0.23 0.68

Above total 104.2 56.54 74.06 44.22 56.01

World 100 100 100 100 100

97

UAE’s imports from India has however declined continuously between 1978 and

2000. There has been an upward trend in the UAE’s imports from India since

2000 from 3.94 million US $ to 20.70 per cent. Rice exports from India to Kuwait

again a major market has indicated a declining trend from 12.76 million US$ to a

mere 3.13 million US$. Another major importing country Oman has also reduced

its imports from 10.81 million US$ in 1978 to 2.78 million US$. A significant

thrust to India’s rice exports is seen in case of Saudi Arabia. India’s exports of rice

rose from 5.06 million US$ in 1978 to 27.78 million US$ exports of rice from India

to other countries has declined during the period from 1978 to 2009.

3.4. COMPETITIVENESS OF INTERNATIONAL PRICES OF RICE:

Table‐3.18 Average of Free Market Prices and Price Indices of Selected Primary Commodities

(Annual 1961 ‐ 2010) Base Year ‐ 2000

Product/ Avg ALL FOOD FOOD_TB ‐FOOD TROPICAL_B Veg_Oil Agri_Raw Rice

1961‐1970 53.41 52.07 51.82 54.29 64.60 42.96 78.93

1971‐1980 124.38 122.63 119.09 153.57 139.00 84.58 156.74

1981‐1990 122.90 121.69 117.01 162.57 133.02 108.34 140.95

1991‐2000 123.81 122.00 121.27 128.26 138.90 119.70 144.69

2001‐2010 155.96 153.21 155.37 134.27 178.97 144.65 173.93

15 Years Average

1961‐1975 71.98 70.66 71.58 62.67 82.97 49.23 102.73

1976‐1990 128.49 126.93 120.36 184.29 141.44 108.02 148.36

1991‐2005 119.75 117.86 117.84 118.04 135.51 116.85 132.36

1996‐2010 145.08 142.47 143.34 134.88 166.80 133.90 161.72

Source: Calculated from UNCTAD Hand book statistics 2009a, commodity price online.

Note: All food, food and Tropical Beverage, Vegetable oil seeds and oils, Agricultural Raw Materials,

Rice: Thailand, white milled, 5% broken, nominal price quote, FOB Bangkok.

Average Free Market Prices and Price Indices:

The table‐3.18 shows details an all‐round increase in the price indices of

the selected primary commodities viz. all food commodities, food and tropical

98

beverages, vegetable oils, agricultural raw materials and rice. The price indices of

all food items rose from 53.41 per cent (1961‐70) to 155.96 (2001‐2010)

indicating an increase of three times. The price of food and tropical beverages

has indicated a largely identical position. The index rose from 52.07 per cent and

153.21 (1961‐70 to 2001‐10). Further identical rise in price index of food is found

which rose from 51.82 per cent (1961‐70) to 155.37 per cent (2001‐10). The

increase in price index of tropical beverages is slightly slow which rose from

54.29 (1961‐70) to 134.27 per cent (2001‐10). The price index of vegetable oil

has gone up from 64.60 per cent (1961‐70) to 178.97 (2001‐10). The price index

of agricultural raw materials is slightly steeper, it rose from 42.96 (1961‐70) to

144.65 (2001‐10). The rise in price index has been slow; it rose from 28.93 per

cent (1961‐70) to 173.93 per cent (2001‐10). The price indices in terms of 15

years average indicate a relatively slow increase in the various 15 years period

from 1961‐75 to 1996‐2010. Compared to the other primary commodities the

price index of rice appears to be moderate.

Table‐3.19 Average of International Prices Instability Indices and Trends of Free‐Market

Commodity Prices for Selected Periods, (Annual, 1981‐2010)

Measures Product/ Avg Combined All food Food _TB Rice Tropical_B Veg_ oils Agri_ raw

Price instability

indices

1981‐1990 11.94 12.14 12.54 19.99 14.32 17.93 7.18

1991‐2000 10.19 11.80 11.46 13.77 22.95 16.48 10.07

2001‐2010 9.76 7.52 7.65 13.92 6.36 15.29 7.60

2001‐2005 4.84 3.71 4.14 5.32 7.22 9.84 5.44

2006‐2010 9.25 8.89 8.25 21.13 5.30 20.72 9.33

Price trends

(in current

dollars)

1981‐1990 0.52 ‐1.33 ‐0.97 ‐2.40 ‐4.87 ‐3.96 2.06

1991‐2000 ‐1.28 ‐1.02 ‐1.23 ‐2.95 2.91 0.40 ‐2.26

2001‐2010 12.24 10.79 10.75 15.03 11.08 11.14 9.13

2001‐2005 9.86 6.51 5.94 12.32 9.96 11.08 8.78

2006‐2010 6.67 11.07 11.13 16.08 11.25 10.97 7.91

Price trends 1981‐1990 ‐3.82 ‐5.67 ‐5.31 ‐6.73 ‐9.20 ‐8.29 ‐2.29

99

(in constant

dollars)

1991‐2000 ‐1.74 ‐1.48 ‐1.69 ‐3.40 2.46 ‐0.05 ‐2.72

2001‐2010 8.28 6.84 6.80 11.06 7.13 7.19 5.18

2001‐2005 4.33 0.99 0.42 6.78 4.43 5.54 3.26

2006‐2010 5.16 9.56 9.61 14.55 9.73 9.45 6.39

Source: Calculated from UNCTAD Hand book statistics 2009a, commodity price online. Rice: Thailand,

white milled, 5% broken, nominal price quote, FOB Bangkok. Note: All food, food and Tropical Beverage,

Vegetable oil seeds and oils, Agricultural Raw Materials,

The table‐3.19 shows details averages of Instability Indices and Trends of

Free Market Commodity Prices for selected periods Price instability indices

indicates a high level of instability 1981‐1990, 1991‐2000, 2001‐2010 and 2006‐

10. However, the instability is low during 2001‐05. A similar trend is indentified

during the above periods for all food category, food and tropical beverages, rice

for tropical beverages, vegetable oils, and agricultural raw materials, low

instability is found during only during 2001‐05. Price trends for these group of

commodities is negative or low level during 1981‐90 and 1991‐2000. For the rest

of the time periods prices appear to be on a higher level under current dollar

terms. Under constant dollar prices a similar trend of negative and lower prices

are found during 1981‐90, and 1991‐2000. Further higher level of prices have

been found during 2001‐10 and 2006‐10 while lower prices are found during

2001‐05.

Table‐3.20 Value of Co‐efficient Variations (CV) of Monthly Free Market Prices and Price Indices

of Selected Primary Commodities (Monthly Jan 1960 ‐ Dec2011) Base Year ‐ 2000=100

Source: calculated from UNCTAD.com online price data.

Period ALL FOOD * FOOD _ TB Tropical _ B * VEG_ OILS Rice

Jan1960‐Dec1970 8.64 9.97 9.65 10.74 18.61

Jan1971‐Dec1980 32.20 32.90 55.06 31.42 40.28

Jan1981 to Dec90 15.25 15.86 21.51 26.06 27.13

Jan1991 to Dec00 13.02 12.89 28.71 18.12 17.95

Jan2001 to Dec11 36.65 36.30 39.42 41.93 50.15

100

Table‐3.20 provides detailed value of co‐efficient variation of monthly

free market prices and international prices base year 2000=100. Monthly free

market prices selected for primary commodities all food accounted for 8.64 per

cent to comparative slightly increase in rice prices i.e, 18.61 in during period Jan

1960 and Dec 1970 respectively. But food tropical beverage accounted for 32.90

to rice price i, e., 40.28 comparative decline, the vegetable oils is 31.42 , per cent

from Jan 1971 to Dec 1980. Since mid Jan 1980s all food commodities prices

declined to 15.25 per cent, vegetable oils accounted for 26.06 coefficient variation

but rice price rose to recording 27.13 slight changed respectively. From Jan 1991

and Dec 2000’s this trend tropical beverage i., e. 28.71 (C.V), slowly It got declined

compared to international rice price i., e, 17.95 coefficient variation during this

decade. Recent trend showed upward for international prices for all food i., e.

36.65 to 41.93 for vegetable oils, rice prices slightly increased from Jan 2007 to

Dec2011. Compared to earlier period establishment of WTO in the year 1995, it

was expected that agriculture prices will increase and the volatility of agricultural

prices will be reduced (Gulati and Sharma 1998).

Figure‐3.1 Monthly Free Market Prices and Price Indices of Selected Primary Commodities

101

0100200300400500600700800900

100011001200

Jan-

-200

7

Mar

--20

07

Ma y

--20

07

Jul y

--20

07

Se p

t--2

007

Nov

--20

07

Jan-

-200

8

Mar

--20

08

Ma y

--20

08

Jul y

--20

08

Se p

t--2

008

Nov

--20

08

Jan-

-200

9

Mar

--20

09

Ma y

--20

09

Jul y

--20

09

Se p

t--2

009

Nov

--20

09

Jan-

-201

0

Mar

--20

10

Ma y

--20

10

Jul y

--20

10

Se p

t--2

010

Nov

--20

10

Jan-

-201

1

Mar

--20

11

Ma y

--20

11

Jul y

--20

11

Se p

t--2

011

Nov

--20

11

Figure-9 Monthly Free Market Prices and Price Indices of Selected Primary Commodities

ALL FOOD FOOD _ TB Tropical _ B VEG_ OILS Rice

Source: www. UNCTAD commodity online price data

3.5. IMPACT OF TRADE LIBERALIZATION EXPORT AND IMPORT PRICES OF RICE AND ITS TRADE

FLOWS:

Table‐3.21 Monthly International Rice Export price (US$/t free on board) of Thai rice 5%

brokens‐1991‐2010

Year/

Month Jan Feb March April May June July Aug Sept October Nov Dec

1991 324 343 337 312 305 309 315 315 315 305 304 294

1992 290 290 290 291 292 294 295 293 287 276 275 276

1993 280 279 266 251 229 227 230 230 234 284 353 370

1994 435 448 423 413 391 345 315 315 305 300 300 300

1995 284 284 286 282 288 326 346 340 360 383 341 342

1996 369 368 360 327 332 342 358 336 328 313 315 319

1997 356 347 323 304 324 323 320 285 271 267 252 270

1998 288 297 296 312 318 326 324 321 321 299 270 278

102

1999 300 280 256 236 244 254 259 245 229 217 228 234

2000 241 241 226 215 199 196 189 187 179 188 185 184

2001 184 185 175 164 164 168 169 168 173 171 174 179

2002 192 195 189 190 198 203 200 190 187 186 187 186

2003 201 199 197 195 198 203 199 195 198 196 193 197

2004 213 213 238 241 232 229 231 239 235 244 259 278

2005 287 290 293 297 294 285 277 283 285 286 278 281

2006 291 302 304 302 308 313 315 313 309 301 296 305

2007 313 315 323 317 318 323 329 328 325 329 342 361

2008 376 465 594 907 902 757 732 694 684 609 552 532

2009 580 591 588 550 533 575 572 445 439 413 397 399

2010 478 528 591 729 717 666 652 569 562 511 474 465

Avg

1991‐00 316.70 317.70 306.30 294.30 292.20 294.20 295.10 286.70 282.90 283.20 282.30 286.70

Avg

2001‐10 311.50 328.30 349.20 389.20 386.40 372.20 367.60 342.40 339.70 324.60 315.20 318.30

Source: Rice Committee Board of Trade of Thailand‐1961‐94, Market Report, World Bank online‐ 1995‐2009

Note: Data refer to Thai 100B% FOB (free on board).

Table‐3.21 provides the details of share of monthly international rice

export price of Thailand rice. There is a declining trend of average monthly

international rice export price of Thailand rice (5% broken) during the decade

from 1991‐00. The average price (FOB) of this variety of rice varied between US$

316.70 in January to US$ 286.70 in December 1991. The average maximum price

during this period was US$ 317.70 in February and average minimum price was

US$ 282.30 in November 1991. The average export price of this variety of

Thailand rice during 2001‐10 varied between US$ 311.50 in January and US$

318.30 in December. Reflecting a strong pace of shipments in the first quarter,

FAO has slightly raised its forecasts of world rice trade in calendar 2011 to 31.8

103

million tonnes. At this level, the volume of exchange would be about 400 000

tonnes, or 1 per cent above the 2010 level, and only some 200 00. The maximum

average price during this period was US$ 389.20 in April and the average

minimum price was US$ 311.50 in November. On the export side, Thailand is still

expected to account for much of the expansion, but volumes delivered by Brazil,

Cambodia, China, India, Uruguay and, especially Vietnam are also foreseen to

rise, offsetting reduced exports from Pakistan and the United States.

Table-3.22 Exports of different varieties of rice of major rice exporting countries (quotas in rice)

Country/Region

Long grain

Paddy

Medium/Short

TRQ

(tons)

Milled

Brown Milled Brown Non‐

fragrant

Fragrant

Brazil 15.0 15.0 13.0 13.0 15.0 13.0

China 1.0 1.0 1.0 1.0 1.0 1.0 5,320,000

India 70.0 70.0 80.0 80.0 70.0 80.0

Indonesia 21.0 16.1 25.0 35.0 14.3 15.6

Japan (yen/kg) 34 341 341 341 34 341 682,000

Malaysia 0.0 0.0 0.0 0.0 0.0 0.0

Other Asia 0.0 0.0 0.0 0.0 0.0 0.0

Philippines 50.0 50.0 50.0 50.0 50.0 50.0

United States ($/ton) 14 14 21 18 14 21

Sources: AMAD (Agricultural Market Access Database), USDA, FAS GAIN reports.

Table‐3.22 provides the details of percentage share of rice of major exporting

countries in world. Maximum 70 per cent of India’s long‐grain variety of non‐

fragrant and fragrant rice, and 80 per cent of brown rice accounts for its exports

104

in world market. Further 80 per cent medium/short paddy 80 per cent, 70 per

cent of milled rice and 80 per cent of brown rice is accounted for in export

market. It is found that 50 per cent each of long‐grain fragrant, non‐fragrant

milled rice, and 50 per cent of brown rice of Philippines is accounted for in export

market. Similarly, medium/short variety of paddy (50%), milled (50%) and brown

(50%) are accounted for in world export. Other major exporters of these varieties

of rice are Indonesia and Brazil.

Table‐3.23 Rice flow model on the basis of rice trade liberalization

Rice Type Baseline Free Trade % Change

Long Grain High Quality (Paddy)

Quantity (MT) 1,035,320 1,081,254 4.4%

Export Price (USD/MT) 149.21 154.67 3.7%

Import Price (USD/MT) 185.51 166.89 ‐10.0%

Brown

Quantity (MT) 856,798 916,721 7.0%

Export Price (USD/MT) 223.75 219.25 ‐2.0%


105

Milled

Quantity (MT) 7,495,594 7,704,482 2.8%

Export Price (USD/MT) 225.97 225.58 ‐0.2%


LOW QUALITY (Milled)

Quantity (MT) 8,084,093 9,149,728 13.2%



Fragrant (Milled)

Quantity (MT) 2,449,711 2,467,502 0.7%



All Long Grain

Quantity (MT) 19,921,516 21,319,687 7.0%



Medium/Short Grain (Brown)

Quantity (MT) 483,063 1,162,478 140.6%



Milled

Quantity (MT) 2,487,760 3,946,170 58.6%



All Medium/Short Grain

Quantity (MT) 2,970,823 5,108,648 72.0%

106

Source: University of Arkansas, RICEFLOW Model. 2003.

Table‐3.23 provides the details of percentage change in rice trade

liberalization from RICEFLOW model during 2000. The details of the trade

volume quantity, export price and import price of rice of different varieties

during the trade liberalization RICEFLOW model during 2000 are presented in

the table (Long‐Grain in High Quality). There has been a positive change

(increase) in the quantity of trade of long‐grain high quality rice by 4.4 per cent

subsequent to rice trade liberalization from RICEFLOW model during 2000.

Export price of rice rose by 3.70 per cent. While import price declined by ‐10.0

per cent during 2000. (Brown Rice) The quantity of brown rice traded during the

period rose by 7.0 per cent. While export price of this variety of rice declined by

‐2.0 per cent and import price declined steeply by ‐10.0 per cent (Milled Rice).

The quantity of milled rice traded subsequent to liberalization went up by 7.0

per cent, export price declined by ‐0.2 per cent and import price went down by ‐

3.8 per cent. (Low Quality (Milled) Rice). Trade in low quality (milled) rice

increased by 13.2 per cent and export price of this variety of rice rose by 6.6 per

cent, import price declined by 14.1 per cent. (Fragrant (Milled). Trade in fragrant

(milled) rice rose marginally by 0.7 per cent and export price too increased by

0.7per cent import price declined substantially by ‐41.5 per cent (All Long

Grain). Trade volume rose by 7.0 per cent and export price increased by 1.8 per

cent, import price declined by ‐17.7 per cent. Medium/Short Grain (Brown).



All Rice

Quantity (MT) 22,892,339 26,428,335 15.4%



107

There has been a substantial increase in the volume of trade (quantity) of

medium/short grain (Brown) variety of rice by 140.6 per cent export price went

up substantially by 199.7 per cent, import price declined by ‐41.4 per cent

(Milled). Trade volume of milled rice increased by 58.6 per cent and export price

rose by 71.0 per cent. The decline in import price was ‐24.6 per cent (All

Medium/Short Grain). There was a substantial increase in the trade volume of

this variety of rice by 72 per cent. While export price rose by 90.6 per cent

import price declined by ‐27.4 per cent. (All rice), All variety of rice registered

an increase of 15.4 per cent in their trade volume (quantity), export price rose

by 32.8 per cent but import price declined by ‐13.5 per cent.

Table‐3.24 provides the details of country wise imports and exports after

global rice policy reform during 2000. There has been a decline (‐7) in imports of

high quality long grain brown rice by Cote d’Ivoire in 2009, but its imports of low

quality milled rice stood at 2396600 worth of USD imports of high quality long

grain milled rice by other Asian countries was 895000, USD, medium grain milled

rice imports by 18489000 USD and it imports of low quality milled rice went

down to ‐1928000 USD, Philippines imports of low quality milled rice (long grain)

was 72331000 USD, Russia imported 660000 USD worth of long grain high

quality milled rice and medium milled rice went down by ‐470000 USD and ‐

11517000 USD, Saudi Arabia imports of high quality milled rice and fragrant

milled rice went down by ‐2875000 USD and ‐73000 USD respectively. Sri Lanka

imported long grain low quality, milled rice worth 11600,000 USD. UAE’s imports

of high quality milled rice and fragrant milled rice went down by ‐1661000 USD

and ‐27000 USD of the total imports. Long‐grain fragrant milled rice are higher

compared to other varieties by major importing countries, the change from the

baseline indicates positive net welfare and consumer surplus and negative

producer surplus in 2009. A also provides details of major exporting countries i.,

e, long grain high quality milled rice (long‐grain), maximum exports have taken

place from Thailand and minimum exports have taken place from China. High

108

quality brown rice and paddy have taken place from USA. In the variety low

quality milled rice is from Vietnam and Myanmar who accounted accounted for

maximum and minimum exports in 2009. USA and India accounted for maximum

and minimum exports of fragrant milled rice respectively in 2009. In the medium

grain category milled and brown rice were exported from China and USA only

change from baseline in terms of ‘net welfare’ and producer surplus. China and

United States were the top exporters of rice in 2009. All major exporting

countries indicated negative (‐) consumer surplus indicated through change

from baseline.

109

Table‐3.24 Impact of Global Rice Policy on Economic Welfare of Major rice exporting and importing Countries

(‘000 USD)

Major Importing Countries

Country/Region

Long‐ grain Change from Baseline

High Quality Low Quality Fragrant Medium ‐Grain Net Producer Consumer

Milled Brown Paddy Milled Milled Milled Brown Welfare Surplus Surplus

Cote d’Ivoire ‐7 23,966 23,959 ‐32,023 55,982

Other Asia ‐895 ‐1,928 ‐18,489 ‐21,313 29,543 ‐50,856

Philippines 72,331 72,331 ‐628,991 701,323

Russia 660 ‐470 ‐11,517 ‐11,328 648 ‐11,976

Saudi Arabia ‐2,875 ‐73 ‐2,948 0 ‐2,948

Sri Lanka 1,160 1,160 ‐109,104 110,264

U.A. Emirates ‐1,661 ‐27 ‐1,689 0 ‐1,689

Total Importers 40,879 132,264 22,352 315,259 546,982 3,440,022 1,033,463 5,531,222 ‐27,225,538 32,756,760

Major Exporting Countries

Country/Region Long Grain Medium grain Change from Baseline

High Quality Low Quality Fragrant Net Producer Consumer

110

Milled Brown Paddy Milled Milled Milled Brown Welfare Surplus Surplus

China 2,232 11,593 625 479,914 154,951 649,315 64,206,673 ‐63,557,358

India 3,510 1,961 570 6,041 972,850 ‐966,810

Myanmar 884 884 128,494 ‐127,610

Pakistan 4,521 10,422 1,118 16,061 39,040 ‐22,979

Thailand 11,072 9,817 1,132 22,021 123,327 ‐101,306

United States 3,597 4,613 1,989 2,578 2,492 85,639 224,822 325,729 2,184,697 ‐1,858,968

Vietnam 2,652 15,894 18,546 229,127 ‐210,581

Total Exporters 28,274 ‐8,125 2,356 51,659 5,937 905,212 449,094 1,434,408 70,247,441 ‐68,813,033

Total Welfare 69,153 124,139 24,709 366,918 552,919 4,345,234 1,482,557 6,965,629 43,021,903 ‐36,056,274

Source: www.USDA.com

111

3.6. CONCLUSION:

Government policies that interfere with the rice sector are a continuous

phenomena. Such policies are imposed due to political, social and economic

reasons. The increase in the import bill would have an adverse effect on the

trade balance. This is consistent with expectations, given that policies towards

rice exports and imports are not symmetric, and India has tended to have

domestic prices lower than international prices in recent years. Deformations in

rice trade occur throughout the world. State trading enterprises are pervasive in

rice trade, most notably in China, Indonesia, India, Japan, Vietnam, and USA.

State trading trends result in lack of transparency in pricing and trade

competitiveness. India is all set to export basmati rice to China as the two sides

have been able to sort out regulatory issues blocking the export. Liberalization

will have important ramifications in terms of the redistribution of the benefits

from rice production within countries. Thailand is a clear exception, as rice trade

is managed by a very competitive group of export companies. Policy reforms to

reduce protection in the global rice economy are estimated to boost economic

welfare by more than $7.4 billion per year. The prospects for the success of the

Doha Round of the WTO midpoint to a great extent on continuing the expansion

of market access, reduction of tariffs, and limits on export subsidies required to

achieve the benefits estimated here from global trade liberalisation. Price

competitiveness of rice production in India, as well as its policy determinants,

during the recent period of price liberalization and other economic reform are

satisfactory. Our measure of price competitiveness incorporates both the

product (rice) price. Because of serious instability in both financial markets and

the world rice market, price stabilization will remain an important issue in the

Asian rice economy for many years to come. This is not to argue that all

governments stabilize prices in a cost‐effective manner. Instead of insisting on

complete adherence to the free trade paradigm, however, economists can make

an important contribution by helping to design policies that stabilize rice prices

112

in a transparent, market‐friendly, cost‐effective manner. Thus, there is an urgent

need to reform the rules governing interstate commerce in food‐grains and to

overhaul the attendant state government tax policies and regulations. In case of

rice producing countries such as Vietnam, Pakistan, and Thailand, higher

producer prices will lead to improvements in income of households that are net

rice suppliers. The same reasoning but in opposite direction applies to the

Philippines and Malaysia, where the lower producer prices might lead to

reductions in income of net‐rice suppliers and, thus, a counter effect on food

security. There is an urgent need to reform price policy relating to producer,

wholesaler and consumer price. The decomposition framework used in the

present study can provide a useful aid to policy analysis and formulation. The

observed dominance of adverse consequences of macroeconomic policies

adopted during the period strongly suggests that there is need for a macro

economic perspective in analysing the changes in price competitiveness of rice in

India.

References:

Aksoy M.Ataman and Beghin.J.C (2005), “Global Agricultural Trade and Developing

Countries”, Publisher World Bank, Washington, DC, ISBN 0‐8213‐5863‐4, pp.1‐350.

Chand, R. (1998), “Removal of Import Restriction and India’s Agriculture:

The challenges and Strategies”, Economic and Political Weekly.

Gulati, Ashok and Sudha Narayanan (2002), “Rice Trade Liberalization

and Poverty”, MSSD Discussion Paper no. 51. Washington, DC: IFPRI.

Gulati.A and Sharma.K.P (1990), “Prices, Procurement and Production: An Analysis of

Wheat and Rice”, Economic and Political Weekly, Mumbai. Vol. 25, No. 13 (Mar.

31, 1990), pp. A36‐A47.

Del Ninno, C. and Dorosh, P.A., (2001), “Averting a food crisis: private

imports and public targeted distribution in Bangladesh after the 1998

flood”. India Journal of Agricultural Economics, 25 (2/3), 337‐346.

113

Dawe.D (1998), “Reenergizing the Green Revolution in Rice”, American Journal of

Agricultural Economics, Oxford University Press, Vol.80, N.5, pp.948‐953.

Landes, R. and Gulati, A., (2004), “Farm sector performance and reform

agenda”, Economic and Political Weekly, 39 (32), 3611‐3619.

Food and Agriculture Organization (2009), “The FAO rice price update —

September 2009”, Rome: Food and Agriculture Organization of the

United Nations. http://www.fao.org/es/ ESC/en/15/70/highlight_533,

html (accessed October 16, 2009).

Food and Agriculture Organization (2010), “FAOstat, Rome”, available at www.fao.org

http://www.fao.org/corp/statistics/en/, accessed on 14 March 2012.

Dawe, D. and Slayton, T., (2004), “Changing structure, conduct, and

performance of the world rice market: FAO Rice Conference”, Rome,

Italy, 12‐13 February 2004. FAO, Rome. [http://

www.fao.org/rice2004/en/pdf/dawe.pdf].

Ilyas.M, Tahir Mukhtar and Muhammad Tariq Javed (2007), “Competitiveness among

Asian Exporters in the World Rice Market”, Working Paper.

Krishnaji.N (1973), “Wheat Price Movements: An Analysis”, Economic and Political

Weekly, Mumbai. Vol. 8, No. 26 (Jun. 30), pp. A42‐A43+A45‐A47+A49+A51‐A53.

Krishna, Raj and Raychaudhuri, G. S. (1980), “Some Aspects of Wheat and Rice Price

Policy in India”, World Bank Staff Working Paper No 381, World Bank.

IRRI (International Rice Research Institute). (2008), “Background Paper:

The rice crisis: What needs to be done? Los Baños (Philippines): IRRI”.

12 p. www.irri.org.

UNCTAD (2009b), (Various years): “Commodity Trade Statistics

Database”, available at http://com-trade.un.org/db/, United Nations

Statistics Division, accessed on 15- march-2012.

Weerahewa, J., (2004), “Impacts of trade liberalization and market

reforms on the paddy/rice sector in Sri Lanka”, International Food Policy

Research Institute, Washington. MTID Discussion Paper no. 70.

[http://www.ifpri.org/divs/mtid/dp/papers/mtidp70.pdf].

GLOBAL SCENARIO OF RICEshodhganga.inflibnet.ac.in/bitstream/10603/26867/12/9...Rice milled exports from India has reached a high level during 1995 to 1998. Again from 2001-09, it showed

Documents