INTERVIEW: Rising packaged rice imports from Asia poses threat to EU rice sector: Italian rice association director

The influx of rice cultivated, processed, and packaged in Asian countries for direct sale to European consumers poses a significant threat to the EU rice industry. Against this backdrop, Platts talked to Pietro Milani, Director of the Association of Italian Rice Industries to gain his insights.

Rice prices in Europe are rising amid unfavorable weather during the last season which affected the harvest. Indica and Arborio white rice prices in Italy surged by 5% and 42%, respectively, year over year. Platts, part of S&P Global Commodity Insights, assessed Indica 5% white rice at Eur845/mt and Arborio 5% WR at Eur1,699/mt, bulk ex-works on March 14.

Following is a Q&A lightly edited for clarity.

Platts: Which countries are importing rice from Italy, and what specific varieties are they bringing in?

Pietro Milani: Italy is the largest rice exporter in the EU to non-EU countries, exporting 109,000 mt in the 2023-24 season. Most of this rice is milled, with 56% risotto rice, 30% round grain rice, and the rest Indica rice. Key importing countries include the UK, Switzerland, Jordan, Turkey, the US, and Brazil.

In total, Italy sold about 850,000 mt in the EU and exported around 100,000 mt to non-EU markets. EU rice consumption for the 2023-24 season reached 2.45 million mt, with Italian mills supplying one-third of that amount.

Platts: Given that rice prices surged for most varieties last year, do you think this caused a decline in demand for Italian rice?

Pietro Milani: Demand has decreased compared to earlier marketing seasons, especially from the countries that prefer to source rice for secondary processing or aromatic varieties from alternative markets. However, the demand for risotto rice remains consistent, recognized globally for its high quality.

Platts: With rising prices across nearly all rice varieties and the EU's significant imports from Southeast Asian countries, do you consider this a threat to the Italian rice industry?

Pietro Milani: The import of packaged rice is a significant concern, accounting for 30% of all EU rice imports and 20% of total consumption. In the 2023-24 season, about 470,000 mt of packaged rice were imported, potentially replacing the rice consumption of an entire EU member state, as Italy consumed approximately 400,000 mt.

Despite a decline in overall EU rice imports, packaged rice imports are increasing. Packaged rice is subject to the same tariffs as bulk rice, lacking duties that account for its added value.

This trend may lead to:

• medium-term contraction of the European rice industry
• Long-term substitution of domestic production with pre-packaged rice from Cambodia, India, Thailand, Pakistan, and Vietnam, known for popular varieties like Basmati and Fragrant rice.

Platts: Do you think the current rice stock is adequate to meet Europe's needs, and are there any supply challenges?

Pietro Milani: There are no significant supply issues, and an increase in cultivated areas is promising for the EU's self-sufficiency. However, in the 2023-24 season, EU rice production met only 48% of demand, with 38% of domestic consumption satisfied by locally produced rice due to nearly 300,000 mt exported to non-EU countries. It is vital for our association to promote the expansion of rice cultivation in the EU to boost self-sufficiency.

Platts: How frequently do prices in Vercelli fluctuate, and what factors influence these price changes?

Pietro Milani: Rice prices in Italy are subject to volatility and can change within a few months due to several factors. Some of the key factors that can lead to price fluctuations include:

• Quality concerns impacting specific varieties during the marketing season.
• Pessimistic forecasts for the upcoming season resulting from climatic conditions.
• Geopolitical events, such as export bans or container shortages.

Platts: Within Europe, which rice origin or variety is the most commonly consumed?

Pietro Milani: Italian millers produce about 30% of total EU rice consumption. Key rice-importing countries for Europe include Pakistan, Cambodia, Myanmar, India, and Thailand, with consumers increasingly favoring Basmati and aromatic rice varieties.

Platts: Is there a need for an additional reference price for EU rice or for imported rice prices?

Pietro Milani: I believe it will be beneficial to have a CIF/CFR assessment.

Platts: Do you hold regular meetings with millers, and do you publish any periodic newsletters?

Pietro Milani: We actively engage in our association's activities, organizing meetings with millers and stakeholders, and participating in the European Federation of Rice Millers (FERM) and rice-related working groups in Italy and Europe. Some of the initiatives that the association has taken are as follows:

• Weekly import-export statistical reports.
• Monitoring major Chambers of Commerce price lists.
• Weekly updates on paddy rice transfer certificates from farmers to millers, recorded by the Ente Nazionale Risi.
• Annual economic report on the previous season's market trends.