This document discusses trends in the global rice market and their implications for rice production in West Africa. It finds that structural changes in Asian rice producing economies are leading to decreased rice consumption and exports. Meanwhile, West Africa's rice imports are rising as production struggles to keep pace with demand. However, West Africa cannot rely on expected future high rice prices and must focus on improving competitiveness through increased productivity, lower costs, and improved quality and market segmentation. Overall, the changing structure of Asia's rice economy presents opportunities for greater rice self-sufficiency in West Africa but competitive pressures from Asia will still be important.

1. The Changing Asian Rice Economy and
its Implications for the Development of
the Rice Subsector in West Africa
Ramziath T. Adjao and John M. Staatz
Michigan State University
October 2013

2. The Importance of Asia in the Global Rice Market
Source: FAOSTAT

3. A Thin, Segmented and Volatile World Rice
Market
USD/T
700
600
500
400
300
200
100
0
1986
1991
1996
2001
2006
Thai 5% broken, f.o.b. price adjusted for inflation (2005=100)
Source: USDA & IMF data
2011

4. The Growing Importance of Rice in West Africa
1000 T
USD/ T
8000
800
7000
700
6000
600
5000
500
4000
400
3000
300
2000
200
1000
100
0
0
1985
1990
Thai 5% broken
Source: FAOSTAT, USDA & IMF data
1995
2000
WA rice imports
2005
2010
WA rice production

5. Structural Change and Emerging Trends in Asia
• Structural change
– Increased income
– Urbanization
• … leading to diversification of diets
– Decreased per capita consumption of rice
– Increased per capita consumption of fruits, vegetables and meat
• … and diversification of production into higher value crops
– Increasing competition between rice & other crops for water
and land
– Falling cereal prices relative to inputs costs
– Diminishing returns to modern varieties
– Declining TFP of rice

6. Agricultural Trends in Asia
Asia
Exporters
Myanmar
Cambodia
Traditional
exporters
India
Thailand
Vietnam
Emerging
economies
Pakistan
Importers
Potential emerging
low-cost exporters
Low-income
economies
Philippines
Indonesia
Bangladesh
China
Traditional
importers
Low-income
countries
Japan
Korea
Emerging
economies
High-income
countries
-Rice is an
“inferior good”
-Rice is still a
" normal good"
-Rice is a
“ normal good”
-Rice is an
“inferior good”
-Improving quality
of cereal exports
-Improving productivity
and quality of cereal exports
-Increased rice
imports
-Increased imports of
high quality rice
-Increased
diversification of
agricultural
production
-Less diversification of
agricultural production
-Less diversification of
agricultural production
-Increased diversification of
agricultural production

7. Perspectives of the World Rice Markets
Asia
Current
Consumption per capita
(kg/year)
West Africa
Trend
Current
80
37
Production (1000 T paddy)
650 055
13 079
Area (1000 ha)
145 543
6 365
Yield ( T/ha)
4.5
2.1
World price of rice ($/T)
576
576
Energy/input costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Source: FAOSTAT, USDA & IMF data
Trend

8. Perspectives of the World Rice Markets
Asia
Current
Consumption per capita
(kg/year)
West Africa
Trend
80
Current
37
Production (1000 T paddy)
650 055
The changing structure
Area (1000 ha)
Yield ( T/ha)
13 079
of the rice
economy in Asia suggests scope 6 365
for
145 543
greater rice production/selfsufficiency4.5 West Africa… 2.1
in
World price of rice ($/T)
576
576
Energy/input costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Trend

9. Perspectives of the World Rice Markets
Asia
Current
West Africa
80
Trend
Trend
ReductionCurrent
of consumption
and exports from emerging
37
Asian economies like China
Production (1000 T paddy)
650 055
13 079
Area (1000 ha)
145 543
6 365
Yield ( T/ha)
4.5
2.1
World price of rice ($/T)
576
576
Energy/input costs ($/T)
195
195
9 815
- 5 175
Consumption per capita
(kg/year)
Net Trade (1000 T)

10. Perspectives of the World Rice Markets
Asia
Current
Consumption per capita
(kg/year)
80
Production (1000 T paddy)
650 055
Area (1000 ha)
145 543
West Africa
Trend
Current
37
13 079
Increasing imports from low6 365
income countries like the
Philippines, Indonesia and
Bangladesh
2.1
Yield ( T/ha)
4.5
World price of rice ($/T)
576
576
Energy/input costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Trend

11. Perspectives of the World Rice Markets
Asia
Current
Consumption per capita
(kg/year)
Production (1000 T paddy)
Area (1000 ha)
80
West Africa
Trend
Current
37
650 055
Increased maritime13 079 rates
freight
145 543
between Asia and WA
6 365
Yield ( T/ha)
4.5
2.1
World price of rice ($/T)
576
576
Energy/input costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Trend

12. Perspectives of the World Rice Markets
Asia
Current
Consumption per capita
(kg/year)
Production (1000 T paddy)
Area (1000 ha)
West Africa
Trend
Current
80
37
650 055
13 079
… BUT there145 543 be important
still will
6 365
competitive pressures from Asia.
Yield ( T/ha)
4.5
2.1
World price of rice ($/T)
576
576
Energy/input costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Trend

13. Perspectives of the World Rice Markets
Asia
Current
Consumption per capita
(kg/year)
80
Production (1000 T paddy)
650 055
Area (1000 ha)
145 543
West Africa
Trend
Current
37
Expansion of output from
13 079
potential low-cost
producers (Myanmar and
6 365
Cambodia)
Yield ( T/ha)
4.5
2.1
World price of rice ($/T)
576
576
Energy/input costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Trend

14. Perspectives of the World Rice Markets
Asia
Current
West Africa
Trend
Current
Consumption per capita
Decreased relative80
price of rice to input 37
(kg/year)
cost likely to:
Production (1000 T paddy) higher650 055 intensification 13 079
1) spur
costs of
2) restrain regional trade (fuel costs)
Area (1000 ha)
145 543
6 365
Yield ( T/ha)
4.5
2.1
World price of rice ($/T)
576
576
Fuel and energy costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Trend

15. Perspectives of the World Rice Markets
Asia
Current
Consumption per capita
(kg/year)
80
West Africa
Trend
Current
37
Production (1000 T paddy)
Thus,
Area (1000 ha)
Yield ( T/ha)
13
WA650 055 just rely on 079
cannot
expected future high world rice prices
145 543
6 365
BUT rather focus on improving
4.5
2.1
competitiveness
World price of rice ($/T)
576
576
Energy/Input costs ($/T)
195
195
9 815
- 5 175
Net Trade (1000 T)
Trend

16. Implications for the Future Competitiveness of
West Africa
• Increasing farm-level productivity
– Scope for productivity increase vary across ecologies (irrigated,
lowland, and upland) – TFP vs yield
– Improving lowlands would offer a favorable environment for
expansion of rice production
• Decreasing per-unit costs throughout the value chain
– Off-farm transaction costs and transports costs in WA remain among
the highest in the world
– Need to increase consistent supply of paddy to medium & large scale
millers by improving contractual linkages between farmers and millers
• Improving product quality and market segmentation
– Higher quality locally produced rice fetches a premium (up to 20%)
over imported rice in some countries
– Need to improve post-harvest operations by improving contractual
linkages between smallholders and processors as well as wholesaling
functions

17. THANK YOU !!!
MERCI !!!