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Exporters vie for supremacy in Saudi rice market
Jeddah,5th Apr 2001

  The Saudi rice market has become a battle ground with exporters fighting to dominate a market worth SR2.5 billion according to last year’s estimates.

The battle has intensified since the entry of high quality Australian and Pakistani rice into a market traditionally dominated by Indians who controlled 65 percent of the business.

The price war has led to the adulteration of high quality Indian Basmati with low quality varieties which is then sold at a low price, according to a market source.

The sales promotion manager at the Al-Muhaideb Food Company, Muhammad Abdul Rahman, said the highest quality Basmati rice was hardly found in Saudi Arabia now because of its high price.

The price makes it uneconomic to compete with adulterated rice sold at a much lower price.

It is further alleged that rice exporters send their products to the Gulf with little regard for quality as long as the commodity is in demand.

The Saudi market is particularly attractive to exporters because of the country’s economic stability and facilities for transportation and credit which use the latest techniques.

According to another market source, exporters from India, the United States, Egypt, Australia, Pakistan, Thailand, Iran and others are making every effort to dominate the largest market in the Gulf region. 

An Indian grain-exporting company, L.T. Overseas, attributed higher oil prices to the increasing demand for top quality rice such as Punjabi Amber and Basmati in the Gulf.

Saudi Arabia is the largest importer of Indian Basmati — 400,000 tons last year.  In addition to domestic consumption, Saudi Arabian traders also re-export the rice.  Indian Basmati sold at SR2,800 a ton encounters stiff competition from Pakistani Basmati priced at SR1,875.

Saudi Arabia is expected to consume 1.3 million tons of imported rice by the year 2005. The expected increase in the number of pilgrims because of new Umrah regulations is also an additional reason for increased rice consumption in the Kingdom.

India is the largest rice exporter to the Kingdom with 65 percent of the market. The US holds second place with 12 percent followed by Pakistan with 11.3 percent, Thailand with 8.3 percent and Australia with 2.4 percent. 

Source: ArabNews©

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05 April 2001 06:53:00 PM

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