UAE's 2020 milled rice imports set to jump 17.6% year-on-year: USDA

London — The UAE's 2020 milled rice imports are forecast to rise 17.6% year-on-year to 1 million mt, according to the USDA.

The UAE does not produce rice due to limited water resources and unfavorable weather conditions. Imports in 2021 are forecast to rise further to 1.2 million mt (+20%) due to increased consumption and government stock building. Around 98% of this volume is expected to comprise milled and semi-milled rice. Imports in 2019 were mainly sourced from India at 470,000 mt (-24.4%), followed by Thailand (28,862 mt, -64.8%) and Brazil (16,925 mt, +6,865%). While rice imports are not subject to a customs tariff, they are subject to a 5% value added tax.

Volumes which are imported into the UAE and then re-exported are being recorded as re-exports. Other volumes are sold by local traders after the imported rice has officially entered the UAE and are included as exports; sometimes these volumes are processed further and/or repackaged. Exports in 2020 are forecast to rise from zero to 10,000 mt (milled equivalent), although the government is expected to limit exports to ensure food security during the coronavirus pandemic. Exports in 2021 are forecast to rise to 100,000 mt (+900%); the majority of this volume is expected to be exported to Iran and African destinations.

Consumption in 2020 is forecast to decline to 740,000 mt (-12.9%) due to a decline in tourism amid the pandemic. The pandemic has resulted in a 30% - 50% decline in sales from food service distributors, which have switched from supplying restaurants and hotels to retailers. Consumption in 2021 is then forecast to increase to 1.05 million mt (+41.9%) as demand from the tourism and food industries improves. Consumption typically comprises Basmati and fragrant rice.

Ending stocks in 2020 and 2021 are forecast to rise to 250,000 mt (milled equivalent, from zero) and 300,000 mt (+20%) respectively, all of which are expected to be held by the government. The government currently has silos able to hold approximately 300,000 mt of food stocks including rice; the government plans to construct more silos to increase its total storage capacity to 900,000 mt. Under its food subsidy and price support program, the government distributes four types of rice to around 54,000 people; Basmati is sold at a subsidized price of AED 120 per 40kg (US $817/mt).