Major Saudi importers of rice said that the Tsunami which hit the countries of South East Asia did not have any impact on the import of rice from these regions, and countries like India, to the Kingdom. This is mainly because of the fact that the major rice producing regions in the western and northern parts of India were not affected by Tsunami. These regions are regarded as the major rice producing areas in the world from where Saudi Arabia is importing rice.
Muhammad Al Dawood, manager of the rice section at Ajwaa Food Manufacturing Co., said that the calamity had not affected the Saudi rice market considerably. The main reason for this is that the paddy fields are far away from the Tsunami-hit regions. Moreover, the Kandla Port from which most of the rice is exported to various countries is safe from the catastrophe.
Referring to the rise in prices of rice, Muhammad Al Dawood attributed this to the fall in the quantity of production and increase in demand. There is a great demand for rice especially from the European markets.
There has been stiff competition among importers of rice in Saudi Arabia also. There are around 180 rice importing companies in the Kingdom. Three of these companies, namely Al Muhaidib, Babakar and Al Shaalan account for nearly 80% of the volume of rice imports. According to figures, Saudi Arabia's annual consumption of rice reaches over 700,000 tons, representing 4.3% of the total global consumption during the year 2003. The total value of consumption in 2003 reached nearly SR 3 billion as compared with that of SR 750 million in 1989. It is expected that the consumption would register an increase in 2005 due to an increase in the number of Haj pilgrims.
The prices of rice for each bag of 40 kilograms in the Saudi market range between SR 125 and 160. The figures released by the Ministry of Planning showed that the average individual consumption of rice by Saudis reaches 43 kilogram per annum. The ministry also noted that nearly 40% of Saudi citizens are children below the age of 14 and they are not consuming rice on a daily basis. The figures stressed that Saudi citizens prefer Indian rice to rice products imported from Pakistan, USA, Thailand, Egypt, Australia and Vietnam. Saudi Arabia imports about 400,000 tons of Indian rice annually. The import of rice from India constitutes 65% of the total imports while the percentages of import from other countries were: 12% from America, 11.3% from Pakistan, 8.3% from Thailand, 2.4% from Australia and 2% from Egypt.
© Saudi Economic Survey 2005
