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Trends in the rice market with a forecast for 2014

An overview of the rice market since about 2002 with a forecast for where it will be in 5 years time.
by

Boykie Mackay

on 10 December 2009

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Transcript of Trends in the rice market with a forecast for 2014

Consumer and production trends which will impact on the market for rice and rice based products over the next 5 years with a forecast for 2014
impressed with how brands have re-colonised what was once a commodity sector with effective marketing that they claim the rice market 'offers an FMCG master class in how to grow value through astute reading of trends'.
Global hunger has not been due to food shortages. It is a result of bad distribution. 850 million people in the world are under-nourished but 2 billion are overweight!
Rising levels of affluence

With rising incomes, diets in emerging economies are expected to shift from starchy staples to livestock products.

One kilo of beef requires about 7 kilos of cereals, pushing the price of grains up. At the same time, economic growth is accompanied by urbanization meaning less farmers, and land being converted for non-agricultural purposes.
Senior commodity analysts place the share of biofuels’ contribution to the run-up in grain prices since mid-2007 at between 60% (Collins, the former chief economist for the United States Department of Agriculture, analysing only corn) and 75% (Mitchell 2008, the senior commodity economist at the World Bank, analysing all grain markets).
High oil prices result in food crops being diverted for use as fuel (pushing up the price of cereals such as rice), Japan is to produce ethanol from Japanese rice to mix with gasoline and 20% of the United States corn crop goes into ethanol production, likely to rise to 32 per cent by 2016.

Planting of corn led to reductions in soybean acreage in 2007 in the US, resulting in demand for palm oil in Asia. China turned to Asian-produced palm oil to meet its growing demand for vegetable oils (Naylor et al. 2007) and encouraged palm oil plantations instead of rice paddies.
Factors leading to price increases (thereby influencing trends)
Population increase
Rising levels of affluence
Oil prices
Environmental factors
Stock market & Exchange rates
Government policy
OREC
Technological Advances
Consumer trends
Predications for 2014
Why rice?
Rice is the staple food for 2.5 billion people
Largest single use of arable land (9%)
85% of rice produced is for direct human consumption
Provides 21% global human per capita energy and 15% of per capita protein
Strategic commodity being the single most important element in the diet of the poor
Mintel forecasts that the UK rice market will grow by an estimated 24% over the period 2007-12. In real terms, with inflation for food products taken into consideration, this represents a 14% rate of growth.
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