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UAE global topper in rice re-exports

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

The study, which was conducted by Abdel Hameed Radwan, an economics specialist at the ministry's Analysis and Information Department, and supervised by Dr Mohammed Mattar, the department's director, revealed that 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. The UAE has attained the top spot due to its geographical positioning in a pivotal point between the production, export, and consumption areas in South East Asia and the rest of the world. The competitiveness of the UAE's logistical services and the ease of customs procedures are the major 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 food 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 through making the UAE, with its superior re-export logistical capabilities, a pivotal transit point between producing and consuming regions.

The study highlighted the UAE's efforts to attain an advanced position among global commercial logistics hubs in non-oil trade through investing vast financial resources -- around $52 billion -- over the past 10 years on the transportation, storage and communications sectors. The UAE is now considered by international organisations as one of the five countries with very low export procedural costs, with the current average cost of exporting one container at $593 in comparison with the global average of $1383, making exporting from the UAE 133 per cent cheaper than the global average.

The study also revealed that the value of re-exported rice from the UAE increased from $120 million in 2005 (84 per cent of the overall global rice re-exports) to $112 million in 2006 (68 per cent), $180 million in 2007 (78 per cent). The export value witnessed a big leap in 2008, reaching $515 million (86.3 per cent) and increased even further in 2009 to $519 million, which constituted 93 per cent of the overall amount of global rice re-exports of 607,000 tonnes valued at $555 million.

The US came in second place in 2009 with $11.5 million 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 $11 million, constituting two per cent of the global sum.

The value of re-exported rice in these three countries reached approximately $541 million and constituted 97 per cent of the overall value of the global re-exports in 2009.

The study added that although the quantity of rice imports to the UAE reached 1.238 million tonnes in 2009, slightly down by four 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 the 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.

Imports

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 $1.248 billion, constituting 8.8 per cent of all global imports of the commodity.

In terms of volume, the amount of imported rice grew by five per cent in 2009, reaching 8.8 million tonnes in 2009 compared to 8.4 million tonnes in 2008. According to the 2009 statistics, the UAE relies on three main countries for 99 per cent of its rice imports, with India in the lead at 72 per cent, Pakistan at 21 per cent and Thailand at six 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.

Global exports

The value of global rice exports reached $15.267 billion 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 23 million tonnes mostly from Thailand and India.

The value of global rice imports reached $15.820 billion in 2009, registering a 12 per cent decrease in comparison with 2008.

© Khaleej Times 2010