Why Sub-Saharan Africa Is Set To Be The Global Leader In Rice Imports

Rice is a crucial food staple for numerous communities across the continents. It is part of the everyday diet of more than 3.5 billion people, especially in Asian, Latin American, and African populations. The latter is expected to dominate international trade demand in the coming years, with sub-Saharan Africa (SSA) set to lead rice imports worldwide.

Substantial demand

Even though rice is a popular asset, intensive and climate-sensitive procedures are required to grow the crop. Thus, only certain regions can efficiently cultivate the commodity and meet global demand. As a result, SSA heavily relies on foreign production.

Altogether, rice consumption across Africa is forecasted to reach 34.9 million tons by the middle of this decade. Rice imports have already grown significantly in recent years. SSA imports were over 14.31 million in 2019/2020, with the figure rising to over 16.0 million in 2020/2021. 2021/2022's imports were at least over 16.4 million.

The rise will continue this decade, with Research and Markets anticipating the African rice market’s compound annual growth rate (CAGR) to increase by 3.2% between 2021 and 2026. Moreover, the United States Department of Agriculture (USDA) projected that SSA rice imports will grow from 2.3 million tons in 2017 to 15.4 million by 2026.

Breaking down the numbers

A growing economy and high standard of living across large SSA nations are expected to contribute to this increase in imports. As the USDA stated:

“Economic growth in SSA is projected to average 3.6% per year in 2017-26. Although below the 4.0% average gain during 2008-17, it is higher than the long-term historical trend of roughly 3.0% growth (1980-2015). Nigeria and South Africa are the region’s two largest economies, accounting for more than 50% of the total SSA economy… Economic growth in SSA is expected to continue, raising the standard of living, bringing more people into the middle class, and decreasing the poverty rate.”

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India is a major player in this field. The non-basmati rice from India to West Africa rose from $4.7 billion in 2020/2021 to $6.11 billion in 2021/2022. Thailand is also a key exporter. However, since 2019, India has gained a considerable share of the market at the expense of Thailand amid the latter's drought challenges. Other notable exporters to Africa include Pakistan, Vietnam, Burma, and China.

Balancing reliance

Nonetheless, despite the import boost, significant progress is being made to optimise local opportunities and cater to growing demand. For instance, the rice compact of Technologies for African Agricultural Transformation (TAAT) is utilizing a creative and environmentally friendly parboiling system called GEM (Grain quality enhancer, Energy-efficient and durable Material).

In contrast with standard technology, GEM produces rice of high quality that can sell for a higher price locally. Overall,?TAAT’s goal is to improve the African agriculture business by increasing productivity, mitigating risks, and promoting diversification.

Before the pandemic, there were 57 operating rice mills with semi-industrial or industrial technologies in West Africa. This amounts to an aggregate capacity of 315 tons per hour. Modern technology such as GEM will help this number grow in this next chapter, but there is a long way to go.

A study shared by Science Direct expresses:

“Although contract farming was carried out in eight countries, and millers integrated rice growing in five countries, contract farming reached at best 9% of the national populations of rice growers and vertical integration covered at most 2% of the national rice areas. The latter suggests that these institutional innovations face several challenges and, as a result, are only emerging slowly in response to the competitive pressure experienced by rice VC (value chain) actors.”

All in all, SSA accounts for a third of global rice imports. Although local activity has risen, it still relies heavily on rice imports. The strong relationship with foreign producers will remain integral in the coming years. The Economic Times noted at the end of last year that Africa is struggling to reduce dependency on imported rice from India. Yet, there will be greater self-reliance on specific segments of the value chain.

TORQ Commodities specialises in the export of Indian parboiled rice to various countries in West Africa such as Togo, Benin, Ivory Coast, and Senegal. This initiative aims to address the demand-supply gap for rice in these countries and strengthen their food security.

To meet the demand for rice in West Africa, TORQ Commodities procures high-quality parboiled rice from India, which is then transported to the region through a well-established supply chain network. We also ensure that the rice meets the regulatory standards of the importing countries and provides the necessary documentation to facilitate customs clearance.

By importing Indian parboiled rice, TORQ is not only bridging the supply gap but also providing a high-quality staple to the population in West Africa. This, in turn, contributes to strengthening the food security of the region and supporting the local economy by creating employment opportunities along the supply chain

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Sources: AgFax; Research and Markets; Statista; ReliefWeb; USDA; The Economic Times; Science Direct