JEDDAH: A price war is likely to break out between Indian and Pakistani traders to establish their dominance on the Saudi rice market, Al-Madinah Arabic daily reported quoting market analysts.
Indian rice, which is famous for its quality, has captured 70 percent of the market in the Kingdom and other Gulf countries while Pakistani rice has been holding only 11 percent of the market. The United States, Australia and Thailand are other major stakeholders.
When India partially stopped rice exports six months ago as a result of an unprecedented demand in the domestic market, Saudi rice importers started looking for other sources.
They later reached deals with producers in Pakistan, especially with those who produce high quality rice. The commercial attaché at the Pakistani Consulate, who requested anonymity, said a meeting between Saudi importers and Pakistani rice producers and traders would be held on March 22 to sign the accords.
He said the move was not aimed at dominating the market. “The issue centers around demand and supply.” Asked why Saudi traders are now focusing on Pakistan, he said: “Everybody is seeking to gain profit, especially after the financial crisis had shaken world markets.” The Saudi-Pak trade exchange rose last year to more than $5.4 billion, he pointed out.
Indian consul for commercial affairs, Cyril Tigga, said India has resumed the export of rice after a temporary ban. “Things have now returned to normal,” he said, adding that Saudi Arabia and other Gulf countries are the major importers of Indian rice in the Middle East.
Tigga downplayed the effect of Saudi-Pak trade deals on Indian rice exporters, saying, “The market is open to all.” He added that trade exchange between Saudi Arabia and India crossed $23 billion in 2008, which is 34 percent more than the previous year.
He said the landmark visit of Custodian of the Two Holy Mosques King Abdullah to New Delhi in January 2006 heralded a new era in Saudi-Indian relations. “We look forward to further strengthening of these ties,” he added.
