South America Rice Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The rice market in South America is estimated to record a CAGR of 3.5% during the forecast period (2021-2026).

The covid-19 has led to the increased demand for rice purchase in the region. As a result, there is a significant increase in rice prices. Therefore, to minimize these effects, governments in the region allowed free tariff rates on importing rice. For instance, Brazil has provided duty-free access for up to 400,000 tons of paddy and milled rice from all origins from December 2020.

Rice is grown as a major staple crop in most countries of South America. The crop is cultivated in the wet soils common in the lowlands of the region. The lowland rice expansion in the vast wetlands of Brazil (with a potential of 24 million hectares), the Andean countries (Bolivia, Ecuador, Peru, and Venezuela), and the River Plate Basin (Argentina, Paraguay, and Uruguay) would greatly influence the regional production of rice in the future. The tropical countries of the region account for the majority of demand. Rice consumption is income elastic in the region, as consumers tend to increase consumption as their incomes rise. The average yield in the region varies between 3.9 ton per hectare to 5 metric ton per hectare. Direct seeding and purchased inputs are used for cultivation across the region. Uruguay has gained the third-highest rice productivity in the world with an average of 8 metric ton per hectare of dry paddy rice in the last 5 years.

Scope of the report

Rice is cultivated as the major staple crop and has economic importance in the region. Compared to the other rice-growing regions in the world, rice cultivation on larger farms in tropical South America is predominantly mechanized. Countries like Brazil, Argentina, and Uruguay have increased their trade relationship with key African countries. Rice production (Volume), consumption (Value & Volume), trade (export-import) scenario (Value & Volume), and price trend analysis is also involved in the report. The value chain and seasonality of the crop and future of the rice market are considered.

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Key Market Trends

Analysis of Rice Production in the Region.

In South America, Brazil accounted for the leading producer of rice with 10,368 thousand metric ton, followed by Peru and Colombia. with the production of 3188 thousand metric ton and 3012 thousand metric tons in 2019. In Brazil, Peru, Colombia, Argentina, and Uruguay, rice is the majorly consumed crop as it provides 20% more calories than any other crop. Rice acts as a leading source of protein for the poorest of the tropical population, which accounts for 25% in the South American region. Therefore, these reasons have triggered the increasingly efficient rice production in the region with the adoption of modern varieties that are more resistant to climate change. Furthermore, as per FAO data, the yield of rice is increased from 5.50 metric ton per hectare in 2016 to 6.10 metric ton per hectare in 2018, it has enhanced the rice production in the region. However, due to bad weather conditions, rice production is decreased by 7.9% in 2019 over the previous year.

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