Production:

There is no domestic rice production in Saudi Arabia. The country depends fully on imports to meet its rice consumption demand.

Consumption:

In 2014, the Saudi population was estimated at 30.8 million and grows by about 3 percent annually. Rice is a staple food in Saudi Arabia that is served for lunch and dinner. The traditional dish called "Kabsah" is widely used in Saudi homes. The majority of Saudis include rice as a major part of their daily diet. Most of the 10 million expatriates living in Saudi Arabia (from the Indian subcontinent and other Far East countries) are large consumers of rice. In MY2013/14, rice consumption in Saudi Arabian was estimated at about 1.33 million MT, with a per capita consumption of 43 kg per year. The demand for rice will continue to grow between three to five percent annually in the coming years due to population growth and increased number of foreign visitors to Makkah for making Hajj and Umrah rituals. In recent years, the total number of visitors who came to Saudi Arabia to perform Hajj and Umrah has been close to eight million pilgrims annually, about 26 percent of the Saudi total population in 2014. The pilgrims stay at least two weeks during their visits in the vicinity of the two holy cities of Makkah and Madina.

Basmati (aromatic rice from the Indian subcontinent) is the most popular rice variety in the Saudi market. The American long parboiled and medium grain Calrose rice varieties are well known. The U.S. long parboiled rice accounts for more than 80 percent of the U.S. rice varieties consumed in Saudi Arabia, however, Saudi consumers' preference for this variety shifts depending on its price competitiveness mostly to basmati rice varieties. The demand for U.S. calrose fluctuates based on its price competitiveness compared to Australian and Egyptian varieties. While Indian basmati rice is mostly consumed in the eastern, central, northern and western regions of Saudi Arabia, the American rice is most popular in the southern region of the Kingdom.

Trade:

In MY 2013/14, Saudi Arabia imported about 1.4 million MT of rice. India remained the dominant rice supplier to the Saudi market, with its exports rising by about 9.5 percent last year, to 972,701 MT and controlling 69.3 percent market share. In MY2013, Basmati rice varieties accounted for about 85 percent of Indian's total rice exports to the Saudi market and the remaining were non-Basmati varieties, mainly Parmal rice variety.

Saudi rice imports are projected to growth by 7 percent in MY2014/15, to 1.5 million MT. This growth is mostly due to increased supplies of Indian rice. Traditionally, Iran imported a third of Indian high quality Basmati. A recent ban on rice imports by Iran, to protect its rice producers, has made Indian rice cheaper and readily available for the Saudi market. The Iranian has also caused rice stocks in Pakistan to rise and thus pushed down export prices as well. The Saudi rice market is very price-sensitive. Demand for U.S. rice is expected to decline significantly this year due to more price-competitive export offers from Indian, Pakistan and Thailand, which also has excess exporter rice stocks.

Pakistan was the second largest rice exporter to Saudi Arabia in MY2013/14, with a 14.6 percent market share, followed by the U.S. with 7.2 percent and Thailand with 5.4 percent. Saudi rice imports from the U.S. declined 26 percent in MY2013/14, compared to last year. U.S. rice exports to Saudi Arabia fluctuate depending on their price competitiveness with other varieties, especially Indian parboiled Basmati rice. Saudi rice importers tend to switch from U.S. parboiled to Indian sella (parboiled) Basmati rice when prices become advantageous to them. Last year, the long grain parboiled rice accounted for about 81 percent of the total U.S. rice exports to Saudi Arabia, and the remaining 19 percent was medium grain rice. Lower price competiveness was the main reason for the huge decline in U.S. rice exports to the Saudi market. The average FOB price for U.S. rice increased by about 4 percent for long grain parboiled rice, and increased by about 26 percent for the short grain Calrose rice. Rice importers attributed the huge increase in the U.S. Calrose rice price last year to a tighter rice supply in California.

Saudi Rice Imports in MT

MY2012/13 (Jan-Dec 2013)

MY2013/14 (Jan-Dec 2014)

Origin

Quantity

Market Share

Quantity

Market Share

India

888,427

66.1%

1,021,000

72.7%

Pakistan

201,530

15.0%

162,000

11.5%

U.S.

136,734

10.2%

101,253

7.2%

Thailand

67,324

5.0%

75,371

5.4%

Other Countries

50,000

3.7%

45,000

3.2%

Total

1,344,015

100%

1,404,624

100%

Source: GTA and Trade Source

Saudi Arabia re-exports limited quantities of rice to nearby countries. According to our trade contacts, an amount roughly estimated at 20,000 MT of rice is re-exported from Arabia annually, mostly to Yemen by trucks and to some African countries such as Djibouti, Somalia and Sudan.

Marketing:

Prices

Rice prices at the Saudi retail food outlets vary significantly, depending on the rice varieties, brand names and quality. In February 2015, the retail prices of several Indian rice varieties declined between 10 and 15 percent compared to the same period last year. In the third week of February 2015, a major supermarket chain in Riyadh was selling 10 kg sack of Indian long grain white basmati rice at prices ranging from $17.05 to $21.32, while the prices for the Indian long grain sella basmati were between $14.14 and $19.43 per 10 kg/sack. The prices for U.S. long grain parboiled rice ranged between $11.45 and $13.33 per 10 kg depending on its brand name, unchanged compared to prices reported in February 2014.

The main factors that have kept the Indian dominance in the Saudi rice market are its capabilities to supply various varieties and grades of rice that are affordable to consumers of all income levels. The Indian long grain white basmati rice is the most expensive rice that is consumed by the middle and upper income consumers; the Indian Parmal rice is affordable to the low income. In February 2015, a 10 kg of Parmal rice was selling at $6.2 per 10 kg sack, the most competitive rice varieties sold in the Kingdom.

Competitors Activities

Many of the Saudi rice companies that import Indian rice allocate a significant part of their marketing budgets in promoting their own brand names in newspapers, radio and billboard advertising. Indian and Pakistani rice exporters often participate in domestic food shows which are held annually in Jeddah and Riyadh, where they provide buyers with point-of-sale materials. Promotions coupled with product tasting are also organized occasionally in local supermarkets. Promotional activities of the U.S. rice industry are mostly targeted at rice importers and are focused on trade servicing.

Production, Supply and Demand Data Statistics:

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Jan 2014

Jan 2015

Jan 2016

Saudi Arabia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

0

0

0

0

0

0

Beginning Stocks

260

239

285

273

0

344

Milled Production

0

0

0

0

0

0

Rough Production

0

0

0

0

0

0

Milling Rate (.9999)

0

0

0

0

0

0

MY Imports

1,450

1,404

1,325

1,500

0

1,540

TY Imports

1,450

1,404

1,325

1,500

0

1,540

TY Imp. from U.S.

0

101

0

80

0

120

Total Supply

1,710

1,643

1,610

1,773

0

1,884

MY Exports

0

20

0

20

0

20

TY Exports

0

20

0

20

0

20

Consumption and Residual

1,425

1,350

1,350

1,410

0

1,470

Ending Stocks

285

273

260

344

0

394

Total Distribution

1,710

1,643

1,610

1,774

0

1,884

1000 HA, 1000 MT, MT/HA