DUBAI, UNITED ARAB EMIRATES – Last March, the United Arab Emirates (UAE) took a unique route in response to the COVID-19 driven food supply crisis, implementing a new federal law: Organizing the Strategic Stock of Commodities (USA Rice Daily, May 5, 2020
). The law provides the UAE Ministry of Economy flexibility to ensure the country maintains a baseline level of commodity stocks in the event of another crisis, as well as helps limit domestic inflation of food prices.
Over the last year, the ministry worked proactively with private industry and established a database to register and classify food suppliers and traders, and has been granted authority to enforce penalties, such as imprisonment and fines, for domestic entities that do not comply with the rules. Not only does the law require a minimum of three to six months’ worth of stocks be kept, but also that they are supplied to the government for distribution upon request.
UAE rice imports are forecast to increase by 15 percent in marketing year 2021/22 to 1.15 million MT. About 93 percent of the UAE’s rice imports come from India, given the preferences of the high number of South Asian expats living here.
In the last decade, U.S. rice exports to the UAE have fluctuated between 3,800 and 11,000 MT. While not a significant export market, it is certainly a target market for value-added, premium product. In 2018, U.S. rice shipments were less than 4,000 MT, in 2019 this increased to about 7,500 MT, and in the very challenging year, 2020, this climbed to 9,300 MT. The U.S. Department of Agriculture’s most recent export sales data shows more than 5,500 MT already in the accumulated export sales column with more sales expected.
“We have definitely seen an uptick in this market over the last year, some of which could be driven by the new minimum stockholding laws that incentivize the UAE suppliers to import the rice they need,” said Eszter Somogyi, USA Rice director for Europe, Middle East, and Africa. “We continue to work building demand in the UAE through regional trade servicing and always participate at the Gulfood trade show, held in Dubai. Because of the climate in the UAE, it is not well-suited for growing rice domestically, so all of the rice must be imported.”
The UAE is a unique market for U.S. rice exports because it’s a regional trading hub and a very transient nation, meaning customers have a diverse set of rice varietal preferences. The U.S., for many years, has predominantly shipped a mix of japonica rice from California and parboiled long grain from the southern growing regions along with several other rice types.