Last year, former US Secretary of State Condoleezza Rice created a huge rice controversy involving America, China and India. Rice’s comments then that growing Indian and Chinese appetite was contributing to the global food crisis was probably taken out of context and attacked by commentators and politicians in India and China.
China and India felt Rice was suggesting that the two countries with the world’s largest population were eating all the rice that is produced and thus creating the global food crisis. Technically, the US Secretary of State was correct since both India and China dominate the world food consumption. But many felt she was morally, socially and politically wrong.
An year after the controversy, growing rice consumption, plunging production and spiraling food and energy prices are very much in the news these days.
While production of several agricultural produces in countries like India and China have actually increased, they are not sufficient to meet the rising appetite for food. India, in fact, blames a poorly managed international financial system and the US Federal Reserve for spiraling food and energy prices in the world. Many analysts also blame US for its increasing bio-fuel consumption from food grains, as one of the many reasons.
Are Indians and Chinese eating more rice and thus creating a food shortage in the world?
I quote an article from New York Times here:
Rice prices have increased for many reasons, but unlike most other commodities, fast-growing Chinese and Indian demand is not one of them. With incomes rising in the two countries, in which a third of the world's population consumes about half of the world's rice, more people are eating protein-rich meat and dairy products, or sampling new foods like pasta, leaving less room on the plate for rice.
If Chinese rice demand follows the trend seen in wealthy Japan, it could fall by half in the coming decades, bringing relief to world consumers who have seen benchmark Asian rice prices nearly triple this year.
Last year, lagging rice prices moved swiftly to catch up with other grain markets, fueled largely by decisions by Vietnam, India and even China to clamp down on exports in order to keep prices low at home.
That rally also revived fears about the long-term supply outlook for Asia's staple at a time when industrial development is encroaching on arable land, rising costs are putting strains on farmers, and weather is threatening crops.
The industrialization of Japan, South Korea and Taiwan highlights the scale of a trend that is already under way. Per capita rice consumption in China, the world's top rice consumer and producer, fell by 10 percent from 2001 to 2007, according to data compiled by Kyushu University in Japan.
And despite population increases, total annual consumption in China at the end of last year had fallen to 127 million tons from 135.5 million in 2001.
In India, per capita rice consumption has already fallen by 7 percent over the past 10 years, and quickening development threatens to speed up the shift, industry officials say.
According to the Food and Agricultural Organization (FAM), the 2008-09 rice market is likely to remain tight even with projected record global production of 432 million tons1 (milled rice)—a 1% increase over last year’s 428 million tons. Production in 2007-08, nearly 2% higher than the 2006-07 level of 420 million tons, was also a record. The projected increase in global production is based primarily on increased area with average projected yield nearly unchanged from the previous year.
Another data from the United States Department of Agriculture (USDA) says rice area is projected to increase by almost 1 million hectares from 154.4 million hectares in 2007-08 to 155.3 million hectares in 2008-09. India will account for more than half of the total increase.
The point is, yes, Indians and Chinese are basically rice eating population. Rice consumption in these countries is going up because of substitution away from more expensive food such as fruits, vegetables, and livestock products. Global rice consumption in 2008-09 was around 426 million tons, an increase of around 1% from the previous year.
Here is more on rice consumption and production from the International Rice Research Institute:
After reaching a record low of 73 million tons in 2004-05, global rice stocks have been steadily rising and are projected to reach 82 million tons in 2008-09, compared with 78.5 million tons in 2007-08.
Despite expectations that global stocks will continue to increase in the coming year, prices are likely to remain high partly in response to export restrictions imposed by key rice-producing countries. Making matters worse, already depleted stocks in the U.S.—one of the few countries that resisted imposing export restrictions during the recent crisis—are projected to decline further, further destabilizing the market in the coming months.
Despite some reassuring supply numbers for 2008-09, there are huge uncertainties regarding the source of future growth in global rice production. The annual rice yield growth rate has dropped to less than 1% in recent years, compared with 2–3% during the Green Revolution period of 1967-90.
Declining investments in all areas of rice research and infrastructure development (including irrigation) have been largely responsible for such dramatic slowing in yield growth. The same is not true for many other field crops such as maize, soybeans, and cotton, for which increased investment in the development of improved varieties and infrastructure has resulted in impressive yield growth.
Increasing rice production through area expansion is also unlikely in most parts of the world because of water scarcity and competition for land from nonagricultural uses such as industrialization and urbanization. World rice area has fluctuated between 145 and 155 million hectares over the past two decades, with the current level very close to the historic high. It would be prudent to assume that world rice area will remain in or even fall below this range in the next 10 to 15 years.
Global rice consumption remains strong, driven by both population and economic growth in many Asian and African countries. This is particularly true for most countries in sub-Saharan Africa (SSA), where high population growth combined with changing consumer preferences is causing rapid expansion in rice consumption.
However, global average per-capita rice consumption has been flat for the last 5 years, with declining per-capita consumption in some countries (China, Thailand, South Korea, Japan, and Taiwan) offset by rising per-capita consumption in others (the United States, India, Vietnam, Myanmar, the Philippines, Bangladesh, and SSA countries).
In rapidly growing developing countries, income growth, urbanization, and other long-term social and economic transformations mean that consumer demand patterns are likely to move toward the consumption patterns of developed countries. A recent analysis by the International Rice Research Institute (IRRI) projects that, as the standard of living in the developing countries rises in the future, overall per-capita consumption will decline slightly from 64 kilograms in 2007 to 63.2 kilograms in 2020.
Among major rice consuming countries, both Chinese and Indian per-capita consumption during this period is projected to decline by 4.2 and 3.5 kilograms, respectively. Nevertheless, even with such a decline in per-capita rice consumption, total consumption in these two countries is projected to increase by 18 million tons because of population growth.
Overall, China’s and India’s share in total world consumption is projected to fall from 52% in 2007 to 49% in 2020. The decline in per-capita consumption is also projected to continue in Japan, South Korea, Thailand, and Taiwan. For many other countries, including the Philippines, Myanmar, Bangladesh, Malaysia, Saudi Arabia, and many African nations, percapita consumption is projected to increase over the same period. An increase in per-capita consumption is also projected for many developed countries in North America and the European Union because of immigration and food diversification.
Overall, 59 million tons of additional milled rice—equivalent to around 89 million tons of paddy (unmilled) rice—will be needed by 2020 above the 2007 consumption of 422 million tons. However, 2020 consumption projections may go even higher if prices of other food items (livestock products, fruits, and vegetables) remain high, causing slow progress in diet diversification in developing countries.
So, the point to be noted here is the fact that it is not just Indians or Chinese who are eating all the rice. There is growing rice consumption from across the developing countries, especially the Asian and Middle East nations.
Walter Donald, an expert on global food security, writes for Commodity Online. You can contact him at email@example.com
28 Jul 15
28 Jul 15
28 Jul 15
27 Jul 15
27 Jul 15
27 Jul 15
27 Jul 15
27 Jul 15
27 Jul 15
27 Jul 15
27 Jul 15
26 Jul 15
25 Jul 15
24 Jul 15