The Asia-Pacific rice market is projected to register a CAGR of 1.2% during the forecast period (2020-2025). Rice is the staple food of Asia and part of the Pacific. Over 90% of the world’s rice is produced and consumed in the Asia-Pacific Region. With fast-paced urbanization, per capita, rice consumption has started declining in the middle and high-income Asian countries like the Republic of Korea and Japan. According to a report by FAO, nearly a fourth of the Asian population is still poor and has a considerable unmet demand for rice. According to FAO, rice is presently grown on 146 million hectares throughout the Asia-Pacific region, with China and India dominating with over half of the total area harvested.
Key Market Trends
Increasing Population in the Region
A large number of the Asian population is still poor and the demand for rice is increasing by the day. It is in these countries that rice consumption will grow faster. In Asia itself, population growth is about 1.2% per annum. The Asia-Pacific Region, where more than 60% of the world’s population lives, adds millions of rice consumers annually. The growth in rice production with stability has been a matter of concern to achieve food security, especially in developing countries of the region and as a poor person’s food, an increase in rice production, availability and price are crucial for the whole economy. Along with the increasing population, per capita consumption also increased by about 40% from 1960 to 2010. Population surges, thus will drive strong demand for rice production and increase rice consumption in the region.
China Dominates Production and Consumption
According to FAO, China produced around 214 million metric tons of rice in 2018 with area harvested being 30.4 million hectares. The country has dominated production over the ages and continues to do so. All rice cultivation is highly labor-intensive. Rice is generally grown as a wetland crop in fields flooded to supply water during the growing season, China's climate is highly favorable for paddy cultivation, hence, the widespread production. Rice farms are mainly located in Central China (in the provinces of Jiangsu, Anhui, Hubei, and Sichuan along the Yangtze River Valley), and it accounts for about 49 % of total Chinese rice production (National Bureau of Statistics of China). Apart from meeting its huge domestic demand, China also exports a significant quantity of rice across the world. Major importers of Chinese rice are Egypt, Korea, Turkey, Ivory Coast and Japan. Production is likely to remain high during the forecast period, given the high local consumption and export global demands.
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