The Effect of Trade Barriers on World Rice Market

Introduction:
The international market for rice is segmented by type and quality. Soil and climate conditions determine which types are economically viable in a given region. According to Siamwalla and Haykin there are possibilities of substitution in production. In terms of consumption, Childs and Bur-dett argue that there is only very little substitution due to strong preferences for specific types and qualities, and so world rice prices tend to be more volatile than other grain prices.

There are four types of rice that are traded internationally: indica, japonica, aromatic, and glutinous rice.

Indica rice accounts for 80% of world rice trade. These grains are long and slender, and remain separated when cooked. Indica rice is grown in tropical and sub-tropical climates. Japonica rice accounts for 10% of world trade and is grown in temperate climates. These grains are short and round, and tend to become slightly sticky when cooked. Aromatic, or fragrant, rices account for just ...