The Emerging International Rice Market - A Case of Diversification, Consumer Preferences and Protection

Abstract: This study evaluate the emerging international rice market by looking at supply and demand, price formation and development, and the extensive protection provided for rice on both national, bilateral and multilateral levels. The findings of this study are that rice is seen as a political good in many Asian countries due to its big impact on economy, society and political stability. Rice production is highly diversified and there are strong consumer preferences and a low degree of substitutability in both production and consumption. Further, even though rice trade has increased since the implementation of the Uruguay Round Agreement on Agriculture, trade in rice is still very limited. Heavy protection and intervention still prevail and result in depressed prices on the world rice market. The thinness of trade results in fluctuating prices which causes instability and is harmful to countries dependent on the international rice market.