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Africa Business News of Thursday, 3 September 2020

Source: africansonchina.com

Why is Africa the largest rice export destination for China?

File photo: In 2017, China sold 781,000 tonnes of rice to African countries File photo: In 2017, China sold 781,000 tonnes of rice to African countries

Africa and rice is a match from the beginning of time. As the demand for rice in Africa continues to increase, a rice export competition has ensued among the world’s largest rice exporters. This year, China is taking the lead in that competition, but the need for Africa to produce its own rice has yet to catch up.

The Rice Export Competition Between China And India

For decades, India has been the world’s largest exporter of rice. India’s exports are now shrinking rapidly, falling at 35.78% this year. This is due to its rising and biggest competitor, China. According to the General Administration of Customs, in 2017, China sold 781,000 tonnes of rice to African countries, including Ivory Coast and Senegal. This is up from 74,000 tonnes of rice in 2016. Comparatively, this accounted for 70% of China’s total shipments versus 19% in 2016. In the later half of 2019, China released over 3 million tonnes of white rice from government-owned warehouses. A bulk of those tonnes were reportedly shipped to African countries

The amount of rice both India and China are exporting to Africa are not produced for Africa. It actually is part of both India and China’s stockpile inventory. According to the Agricultural & Processed Food Products Exports Development Authority (APEDA), China is offloading it’s old stock of rice in the Africa market. Chinese eat fresh sticky rice. The flavor of that rice changes, thus, in China there is a high demand for fresh rice. As a result, the old stock of rice is being exported to African countries.

In 2018, China had around 94 million tonnes of rice stockpiles, two-thirds of the world’s excess inventory. Apparently, this would be enough to feed India for a year. China did begin an overhaul of the subsidy program by cutting minimum prices for rice and wheat that same year. According to industry reports, the Chinese state agency COFCO is targeting new markets in Africa to liquidate old stocks of 3-4 million tonnes. COFCO is focusing on markets in Egypt, Benin, Sengal, Cote d’Ivoire, Somalia, and Liberia.

Africa’s Rice Demand

Africa accounts for 20-30% of the total global imports of rice. In 2017, Ivory Coast took over South Korea as the top destination for China’s rice, with a total purchase of 309,200 tonnes. The growth in the demand for rice in Africa is faster than anywhere in the world. Thus, Africa is highly import-dependent for rice. The rice market in Africa is ripe for opportunity to become a financial benefit for Africa.

Rice has been cultivated for more than 3000 years in certain parts of Africa. It is the most predominant dietary energy source in West Africa and is the second most important source of calories in all of Africa. This is why AfricaRice continues to provide locally-tailored rice research for development. Officially beginning operations in 1971 under the name “West Africa Rice Development Association (WARDA)”, it is an intergovernmental association of African member countries and is one of 15 international agricultural research centers of CGIAR, a global research partnership for a food-secure future.

Headquartered in Abidjan, Côte D’Ivoire, it receives funding from governments, foundations, international financial institutions, development banks, private sector, and the CGIAR trust fund. Today, AfricaRice hosts 28 African country members, including Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Democratic Republic of Congo, Egypt, Ethiopia, Gabon, the Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Liberia, Madagascar, Mali, Mauritania, Mozambique, Niger, Nigeria, Republic of Congo, Rwanda, Senegal, Sierra Leone, Togo and Uganda.

Finally, Africa is becoming the largest export destination for rice in the world. The export competition between China and India is based more on price as both China and India continue to feed Africa’s demand. Due to China’s largest stockpile inventory, it is inevitable that Africa is the largest rice export destination for China. Africa is a big player in the international trade for rice, which is why the ongoing efforts to produce, cultivate, and export rice from Africa is still important.