UAE is top global rice re-exporter by far

A recent study by the Ministry of Foreign Trade has revealed that the UAE has been the top global re-exporter of rice over the past five years (2005 - 2009).

The study said the UAE's share of global rice re-exports stood at 93 per cent, underlining the country's strategic importance in the global rice trade - due to it being situated in a pivotal point between global production, export, and consumption areas in South East Asia and the rest of the world - and further underscoring the competitiveness of the UAE's logistical services and the ease of customs procedures as factors that have helped the UAE attain this significant position in the rice trade.

The study revealed that the UAE's economic policy, which is based on free market principles, has aimed at benefiting from the international commodities market in many ways, such as securing the acquisition of strategic food items to guarantee domestic economic security goals, and to achieve a food surplus for the stability of local markets.

The policy also added a new dimension to the equation by making the UAE a pivotal transit point between producing and consuming regions.

The study highlighted the UAE's drive to attain an advanced position amongst global commercial logistics hubs in non-oil trade through investing vast financial resources ($52 billion) over the past ten years on the transportation, storage and communications sectors alone, to the extent that the UAE is now considered by international organisations as one of the lowest five countries, globally, in export procedures costs with a current average cost of exporting one container at $593 in comparison with the $1,383 global average, making exporting in the UAE 133 per cent cheaper than the global average.

The study also revealed that the value of rice re-exported from the UAE increased from $122 million in 2005 (84 per cent of overall global rice re-exports) to $519m in 2009, which constituted 93 per cent of the overall amount of global rice re-exports of 607,000 tons that were valued at $555m.

The United States  came in second in 2009 with $11.5m in rice re-exports, constituting 2.1 per cent of the overall global re-export of the commodity, followed by Hong Kong with a value of $11m , constituting 2 per cent of the global sum.

The value of re-exported rice in all three countries reached approximately $541m in 2009.

The study added that although the quantity of rice imports to the UAE reached 1.238 million tons in 2009, slightly down - by 4 per cent - in comparison with 2008, 49 per cent of the imported quantity was re-exported, thus explaining the UAE's advanced position as the most important global importer of rice, in addition to it conducting over 90 per cent of global rice re-exports.

The study stressed on the need to constantly search for new markets for rice re-exports in order to maintain the lead in the re-export of this commodity globally, and to develop current markets.

The UAE is considered as one of the top five global importers of rice during the period between 2005-2009. Even though 18 per cent less than the year before, it came in second place in 2009 with rice imports reaching $1.248bn , constituting 8.8 per cent of all global imports of the commodity.

In terms of volume, the amount of imported rice grew by 5 per cent in 2009, reaching 8.8m tons in 2009 compared to 8.4m tons in 2008.

According to 2009 statistics, the UAE relies on three main countries for 99  of its rice imports, with India in the lead at 72 per cent, Pakistan at 21 per cent and Thailand at 6 per cent. These countries are also considered the leading global exporters of rice.

The study stressed on the importance of avoiding the risks of relying on India for most of the rice imports and suggested increasing Thailand's share, pointing out that there is a steady growth in the reliance on Indian rice at the expense of Pakistani rice while Thailand's share remained the same.

The value of global rice exports reached $15.267bn in 2009, registering a 27 per cent decrease in comparison with 2008, moving in parallel with a 29 per cent decrease in the amount of exported rice of 23m tons mostly from Thailand and India.

The value of global rice imports reached $15.82bn in 2009, registering a 12 per cent decrease in comparison with 2008, while the reduction in the amount of imported rice was more than half, at 51 per cent, as the year 2009 witnessed an 80 per cent increase in the average prices of imported rice due to the increase in the price/kg from $0.4 to $0.72. It can thus be deduced that the recent global financial crisis led to a reduction in the global consumer surplus of rice, the report said.

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