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2008 witnessed large increases in the price of rice owing to a number of global factors, including food price inflation, poor crop yield and general shortages, which subsequently led to much higher prices at a retail level. In 2008/2009, world rice production increased by 3.4%, while consumption rose just 0.1%, thus ending the deficit displayed in the 2006/2007 and 2007/2008 growing seasons, which formed the base of the 2008 price hikes in the rice market. According to Ethnic Foods, a new Market Report Plus from market intelligence provider Key Note, good production forecasts and an increase in stocks held will mean a reduction in the value of rice. In line with this, Key Note forecasts that the total UK ethnic foods and rice market will show minimal growth of around 0.7% in 2011.
The EU is expected to produce the largest amount of rice it has produced for several years, which will also limit demand for imports of rice into the EU. Rice is a staple part of the diet in many Asian countries; in 2008/2009, more than two-thirds (68.8%) of the world's top 16 rice-producing companies were Asian. The EU-27 countries were the world's fifth largest importers of rice by volume in 2008/2009, importing 1.35 million metric tons; the Philippines imported the largest amount of rice. Rice will continue to be a valuable commodity in the coming years, and it is estimated that the number of people who feature rice as part of their staple diet will increase as the population rises. From 2012, this could put demand on stocks and create a situation where demand could potentially near supply.
Key Note estimates that the value of the total UK market for ethnic foods and rice was around £1.64bn in 2009, representing an increase of 10.4% on the 2008 value of £1.49bn. This increase is attributable to a large rise in the cost of rice (a predicted 47.6% jump to £369m); the estimated total growth for the ethnic foods market without rice was a much more modest 2.8%, rising to £1.27bn in 2009.
Chinese and Indian foods are the largest of the ethnic foods sectors, and typically dominate the market, with 2009 being no exception. However, the market has seen rapid growth in other sectors, such as Caribbean foods and Polish foods. The dominant Indian and Chinese sectors lost a small amount of market share as the maturity of their markets limits the potential for such rapid growth. Due to the highly competitive nature of the market, ethnic food suppliers and manufacturers perpetually have to reinvent products and innovate to maintain customer interest and loyalty.
Key Note believes that the total UK ethnic foods and rice market experienced further growth in 2010 and forecasts that this will continue in 2011, with continuing demand for original and authentic ethnic foods leading suppliers to produce new products to attract further revenue. The ethnic foods industry must also look to new sectors to fuel their growth; an increasing ethnic population and demand for new product development, are projected to push up sales of ethnic foods by 11.8% over the period from 2011 to 2015. This will be largely as a result of the burgeoning 'other' foods category, and is likely to occur despite the decrease in the price of rice.
The report warns that global warming must also be considered as a factor in the increasing cost of rice - with sea levels predicted to rise in the coming years, less land in low-lying areas of South-East Asia will be available for rice production, limiting supply as countries increasingly consume more of their rice domestically rather than exporting. While advances in genetically modified (GM) crops could help to alleviate this problem, public backlash against GM foods is likely to mean that rice cultivated in this way would not necessarily represent an attractive option to consumers.
Press enquiries: Lisa Ivey at Key Note at email@example.com or 0845-504 0452. Press/review copies of the report are available on request.
Key Note's 2011 Market Report Plus, Ethnic Foods, examines the UK market for ethnic foods focusing mostly on a range of products marketed as coming from or influenced by Asia, the Far East and the Americas. The report covers the retail market for ethnic foods through the major multiple retailers, the activities of major manufacturers and distributors of these products, consumer trends and the effects of the macroeconomic environment on sales. For the purposes of the report, the ethnic foods market is split into two sectors: ethnic foods and rice. The ethnic foods subsector is then divided into the following sectors: Indian, Chinese, Mexican/Tex Mex, Thai, Caribbean and Other.
Key Note Ltd has been providing commercially relevant market information to libraries, academia and businesses for almost 30 years. With over 1,000 titles available across 30 market sectors, and new or updated titles published every week, Key Note is one of the UK's most prolific and respected business information providers. Within the range, some reports are written in response to particular market conditions, whereas other reports will be produced regularly year on year.