potential markets for malawi rice in zambia, zimbabwe and ......rice available in the informal...

Potential Markets for Malawi Rice in Zambia, Zimbabwe and South Africa

Final Version

15 June 2016

Contents

Executive Summary ................................................................................................................................. 1

Zambia ........................................................................................................................................................ 1

Zimbabwe .................................................................................................................................................. 2

South Africa ............................................................................................................................................... 4

Zambia

1.0 Size of the Market.............................................................................................................................. 7

1.1 Imports .......................................................................................................................................... 7

1.2 Exports ......................................................................................................................................... 8

1.3 Informal Trade ............................................................................................................................. 9

1.4 Local Production .......................................................................................................................... 9

1.5 Consumption ............................................................................................................................... 10

2.0 Assessment of Competition in the Formal Retail Sector .............................................................. 12

3.0 Investigation of the Market for Loose Rice.................................................................................... 16

3.1 Distribution ................................................................................................................................. 16

3.2 Pricing of Loose Rice .................................................................................................................. 17

3.3 Consumer Preferences and Buying Habits ................................................................................ 18

4.0 Distribution Channels ..................................................................................................................... 19

5.0 Requirements of Rice Buyers ........................................................................................................ 20

5.1 Current sources of supply .......................................................................................................... 20

5.2 Price points on imports ............................................................................................................. 20

5.3 Commercial practices ................................................................................................................ 20

5.4 Knowledge and perception of rice from Malawi ....................................................................... 21

5.5 Import Regulations and Customs Clearance ............................................................................. 21

6.0 Opportunities and Challenges in Marketing Malawian Rice ....................................................... 23

7.0 Recommendations ......................................................................................................................... 25

Zimbabwe

1.0 Size of the Market............................................................................................................................ 27

1.1 Imports ........................................................................................................................................ 27

1.2 Exports ....................................................................................................................................... 28

1.3 Informal Trade ........................................................................................................................... 28

1.4 Local Production ........................................................................................................................ 28

1.5 Consumption .............................................................................................................................. 29

2.0 Assessment of Competition in the Formal Retail Sector ............................................................. 30

3.0 Investigation of the Market for Loose Rice................................................................................... 35

3.1 Distribution ................................................................................................................................ 35

3.2 Pricing of Loose Rice ................................................................................................................. 35

3.3 Consumer Preferences and Buying Habits ................................................................................ 37

4.0 Distribution Channels .................................................................................................................... 38





5.4 Knowledge and perception of rice from Malawi ...................................................................... 42

5.5 Import Regulations and Customs Clearance ............................................................................ 42


7.0 Recommendations ..........................................................................................................................47

South Africa

1.0 Size of the Market........................................................................................................................... 50

1.1 Imports ....................................................................................................................................... 50

1.2 Exports ....................................................................................................................................... 52

1.3 Local Production ........................................................................................................................ 54

1.4 Consumption .............................................................................................................................. 54

1.5 Informal Trade ............................................................................................................................ 55

2.0 Assessment of Competition in the Formal Retail Sector ............................................................. 56

3.0 Investigation of the Market for Loose Rice................................................................................... 60

4.0 Distribution Channels ..................................................................................................................... 61





5.4 Knowledge and perception of rice from Malawi ...................................................................... 66

5.5 Import Regulations and Customs Clearance ............................................................................ 66


7.0 Recommendations .......................................................................................................................... 71

Overall Recommendations for Malawian Exporters ................................................................................. 72

Annexure 1: COMESA Standard for Rice ................................................................................................... 73

Annexure 2: Regulations Relating to the Grading, Packing and Marking of Rice Intended for Sale in the Republic of South Africa ...................................................................................................................... 82

1 | Regional Markets for Malawi Rice June 16

Executive Summary

Zambia

Annual consumption of rice in Zambia is between 60,000 and 65,000 tonnes. The country produces between 40,000 and 45,000 tonnes of rice per annum leaving a shortfall of around 15,000 tonnes which is made up through imports. The deficit in the 2015/2016 marketing year is expected to be far higher with the Central Statistics Organisation’s latest Crop Forecasting Survey reflecting a 35,000 tonnes deficit as a result of a poor local crop. The government has various policies in place aimed at self-sufficiency in rice and the country has recently released a National Rice Development Strategy which aims to facilitate growth and development of the rice sub-sector. Realistically, the Zambian rice sector faces a number of challenges and it will take a number of years before the country is self-sufficient. Until this time, the requirement for rice imports will remain.

The rice market is clearly split between the formal retail and wholesale sector and the informal market. The formal retail sector is competitive and the research identified a total of 23 brands of rice available through formal retail channels in Lusaka. The majority of rice available through these channels is from Asian sources namely Thailand, Pakistan and India. Zambian consumers have a preference for aromatic rice and there are a few local rice’s available such as Chama Rice, Mongu Rice and Nakonde Rice for which consumers will pay a premium. The market leader is a locally packed rice under the brand name of Mother’s Pride.

An estimated 5,000 to 10,000 tonnes of imported rice finds its way into the informal market annually. The rice prevalent in the informal markets is the Mbeya/Nakonde rice from Tanzania which is enjoyed for its aromatic qualities. Some of the informal traders are selling Thai and Pakistani rice which they purchase from wholesale traders in and around Lusaka. The informal traders purchase large sacks of rice which are opened and the rice is sold by a unit known as a Meda which is available in numerous sizes ranging from 5kg through to 200g.

All companies and traders interviewed in Zambia were unanimous in their conclusion that the rice from Malawi would be well accepted in Zambia as it appears to be very similar to the Nakonde rice from Tanzania which is in demand. The Kilombero rice specifically was well received both in terms of the apparent quality of the product and the fact that it is an aromatic rice. The Faya rice was not as well received and attention should be paid to the required Zambian specification for 5% broken rice which is reasonably white in colour.

There are various ways of approaching the market in terms of distribution channels: through a grain trader, through a wholesale distributor or directly to a packer. The grain trader’s deal with a number of down packers and this would be an easy route to sell through and the traders are confident that they could boost sales if guaranteed volumes were available from Malawi. Price pressure through this channel would be greater as the trader would need to ensure a margin on sales to the packers. Selling to the wholesale distributors would be a second option however the commitment in terms of packaging and promotion would be far larger through this channel. Given the competitive nature of the formal retail sector, a company considering entering the market with a stand-alone Malawi brand needs to carefully consider the financial and time implications of launching a brand in Zambia. An opportunity through this channel would be to pack house brands as most of the large


wholesalers have a house brand. Although the packaging requirements and the need to market would still be applicable to a house brand, the familiarity with an existing brand would make the process simpler. The third option is to sell directly to a local packer. The packers would import in 50kg bags and would repack under their own labels at their facilities in Lusaka. Regardless of the channel, Malawian producers will need to provide a firm commitment around dedicated volumes and consistent supply so that Zambian partners can sell with confidence and commit to marketing and positioning Malawi rice.

There is undoubtedly demand for aromatic rice from Malawi in Zambia and there are a number of companies interested in exploring opportunities. Price will however be the key determinant of success for rice from Malawi in Zambia. An indicative price provided on where Malawi would need to price rice to be competitive is between US$ 0.50 to 0.70 per kg. This is the price currently being paid for Thai rice. Malawi would be able to charge a slight premium for aromatic rice as in both the informal and formal sector there is a marked difference in price between Thai rice and Nakonde/Mongu rice as illustrated in the table below.

Formal Informal

2kg pack/meda

Nakonde US$3.30 to US$3.50 US$2.65 to US$4.40

Thai white US$2,65 US$1.75

2.5kg pack/meda

Nakonde

US$3.50 to US$4.40

Thai white US$2.60 to US$3.40 US$2.65

Mongu (Zambia) US$3.40 to US$3.60 Source: Retail outlets and informal traders in Lusaka, February 2016

Zimbabwe

Zimbabwe produces no rice locally and demand is met through imports. In 2015, imports and therefore commercial consumption of rice was 255,750 tonnes or 16.42kg per capita. The overall level of imports is higher at just over 300,000 tonnes but around 15% of this volume was imported by NGOs and falls outside the commercial market for rice. Rice consumption in Zimbabwe is increasing steadily although availability of rice is still dependant on the availability of foreign exchange in an economy that is experiencing economic turmoil. Asian suppliers completely dominate the supply of rice into Zimbabwe with Thailand being the leading supplier accounting for 34% of total import volumes in 2015. The primary reason for imports from Asia is price coupled with availability and consistency of supply. In 2015, imports from Malawi amounted to 2,630 tonnes. Unlike Zambia, there does not appear to a large informal trade in rice into Zimbabwe with a report published by a COMESA agency in 2013 suggesting that Zimbabwe’s informal trade in rice is in the region of 1,250 tonnes per annum.

The rice market in the formal retail sector in Zimbabwe is extremely competitive and recent years have seen a number of news brands entering the retail space as local packers take advantage of increasing demand. The market leaders in terms of rice brands are Mariana, a Thai rice from Ayan Trading packaged in Mozambique and Ma-Hat-Ma, a Thai rice packed


locally by National Foods. A number of the stakeholders interviewed voiced concern that there are currently too many brands available and that not all of them can be sustainable. Despite the number of brands available and the fact that all rice requirements are imported, there are very few imported brands available and those that are tend to be premium varietals such as basmati where the limited size of the local market would not make it viable to pack locally. Rice is generally imported in bulk and packed at local packaging facilities in Zimbabwe. The main reason for this is that packaged rice attracts a tariff of 15% and bulk rice enters the country duty free. This meets government objectives as the import of rice in bulk has created numerous jobs along the value chain from packaging and printing through to packing and distribution.

The informal markets in and around Harare do a steady trade in rice. The estimates on the percentage of the population supplied through informal sector range from 10% to 25%. The rice available in the informal markets is from Thailand, India and Pakistan. This is because this is the rice that is available from the wholesalers supplying the informal traders. Malawi rice, specifically Kilombero rice used to be sold extensively in the markets and the quality and aromatic nature of this rice is fondly remembered. The traders report that despite the fact that it is such a good and flavourful rice, the price was simply too high vis-à-vis the rice from Asia. At this end of the market price is extremely important given the fact that unofficial unemployment figures point to over 80% of the population being unemployed.

The fact that so many Zimbabweans recall the Kilombero rice and that they have a good opinion of it gives Malawian rice a competitive advantage and a positive linkage into the market. Mount Mulanje rice is being packed in Zimbabwe although the pricing of this product on supermarket shelves is 40% higher than the next most expensive white rice and retailers report it is therefore a slow mover. Faya rice is not well known and the perception is that the rice has a high percentage of broken which would make it unsuitable for mainstream retail. The Zimbabwean market is however segmented in terms of quality and 10 to 15% broken rice is imported at a lower price and sold in 50kg packs to wholesalers for the informal markets.

Given the highly competitive nature of the Zimbabwean rice market it is suggested that Malawian producers enter into a relationship with a packer that is prepared to create a sub-brand for Kilombero under an existing brand. So for example, Brand X selling a white rice and a parboiled rice would add a Kilombero rice to the stable. The advantages of this approach are numerous and a Malawian producer would not have to be concerned with packaging and the cost of launching a new retail brand. Allied to this option would be selling to packers doing house brands. There are numerous house brands in the market from the wholesalers and there is potential to launch a Malawi rice as a house brand if the price is competitive. It is recommended that Malawian producers approach the down packers directly as supplying this channel via traders simply adds to the final cost of the product. Dealing directly with producers will also provide the packers with a level of confidence around sustainability of supply. The opportunity for the more broken rice from Malawi is to package the product in 50kg sacks for sale to the wholesalers supplying the informal markets.

Malawian rice is well known in Zimbabwe but given that outside of the Mount Mulanje rice being packed by Victoria Foods, there are no other regional aromatic rice’s available in Zimbabwe, Malawi rice would be competing directly with the Asian rice’s being packaged and branded in Zimbabwe. Price will be the decider in purchasing decisions currently traders and packers are purchasing rice at an average price of US$550 per tonne with a low of


US$500 and a high of US$560. Malawian exporters would need to come close to US0.55 per kilogramme to compete in the Zimbabwean market. It will be difficult for Malawi rice to compete with Asia on price and therefore the unique qualities of Malawi rice coupled with the existing reputation will need to be strongly promoted to differentiate the product and create the selling point.

South Africa

South Africa is a very large market for rice. The country has no local rice production and all requirements are imported. In 2015 imports amount to a little over 1 million tonnes. Virtually all rice is imported in bulk and packaged at local packaging facilities. Although there is no local South African rice, the packaged product is exported regionally through South Africa’s retail footprint and in 2015 some 130,000 tonnes of rice was exported to the region. The resulted in consumption of 923,000 tonnes or 16.8kg per capita per annum putting the country on a par with Zimbabwe in terms of per capita consumption. Consumption of rice is increasing steadily in South Africa with industry stakeholders forecasting a 10% increase in consumption in 2016. Thailand and India are South Africa’s key suppliers of rice accounting for a massive 92% of the volume of rice imports. The reason given by buyers for the reliance on Thailand and India is a combination of competitive pricing, a product that matches the South African taste profile and the fact that these two countries are the global leaders in the supply of rice which makes it easy to establish contact and which provides confidence in terms of consistent delivery of a high quality product. South African buyers are happy with the product they are getting from these two suppliers and have little incentive to change the source of supply.

Compared to Zambia and Zimbabwe, there are relatively few brands of rice available in the

formal retail outlets in South Africa. There are a couple of big brands that tend to dominate

such as Tastic and Spekko and more recently Allsome. In addition, each of the large retail

chains has a range of rice’s packaged under their house-brand that competes directly with

branded product. Outside of the large packers, there are numerous regional packers who

pack own brands for their provincial markets. There are very few imported brands available

and those that are tend to be premium rice varietals such as basmati where the local market

is limited and it would not be cost-effective to package locally. There is virtually no trade

through informal channels in South Africa and industry players estimate that 99% of all rice

sold in South Africa is sold through formal channels.

South Africa maintains a specific regulation relating to the grading, packing and marking of

rice intended for sale. The regulation is very specific in terms of grading and detail that

needs to appear of packages and labels. Before placing an order or entering into a

negotiation, South African buyers will need a sample accompanies by a specification sheet

which will be analyses for compliance with specification and adherence to the regulation.

There are no tariff barriers on rice imported into South Africa and Malawi therefore does not

enjoy any tariff preferences vis-à-vis Asian suppliers.

The primary market for rice in South Africa is for parboiled rice and this is where the bulk of

demand lies and the market for white rice, and therefore rice from Malawi, as a percentage

of the total rice market is small. At a retail level white rice is sold at up to a 70% premium


over parboiled rice indicating that white rice is targeted at the upper end of the market where

consumers are less price sensitive. Regardless of the premium paid for white rice, price is

extremely important and will ultimately be the deciding factor. Indications received from

buyers on current prices are at around US$540 per tonne for Thai rice.

There is very little knowledge of Malawian rice in South Africa. Most of the companies and

individuals interviewed did not even know that Malawi grew rice. The first challenge for

Malawi in the South African market is going to be educating buyers brand owners, retailers

and packers on the rice varietals available from Malawi and the unique characteristics of the

rice.

The recommended route to market is to enter into a relationship with a packer that is

prepared to offer a Malawian varietal such as Kilombero or Faya or Mount Mulanje within an

existing brand. This would include the retailer’s house brands. The fact that this is an African

rice would be an important message in positioning the rice and would differentiate the

product from anything else available on South African supermarket shelves. If Malawi could

present a range of varietals this would be advantageous. For a South African packer or

brand owner to make the decision to enter into an arrangement to import and sell Malawian

rice they would need assurances around the sustainability of supply and consistency of

quality. The South African company would need to spend a great deal on marketing and

positioning the product and there is a concern around the commitment of small-holders in

Malawi to growing rice.

An interesting opportunity also exists to supply branded Malawian rice through the numerous

“African” food shops in South Africa that service the African diaspora living in South Africa.

There is a trading company that services this market who would be interested in pursuing

this opportunity.

A number of South African buyers have shown genuine curiosity about the rice available

from Malawi and have indicated a willingness to engage with producers to bring the product

into South Africa provided a sustainable source of supply can be guaranteed, that the

product is of a good quality that consistently meets specification and that the price is

competitive. Whilst buyers would pay a slight premium for a quality product with unique

characteristics, the rice from Malawi would need to be competitive against the white rice

currently being imported from Uruguay, Argentina and Thailand.


Zambia


1.0 Size of the Market

1.1 Imports

In 2014, Zambia’s total official rice imports amounted to 10,146 tonnes. Over the five year period 2010 through to 2014, rice imports have declined by 12% overall. As illustrated in Figure 1, some 64% of imports in 2014 were of broken rice and a further 32% of semi-milled or wholly-milled rice. From the Malawian perspective, it is the 3,288 tonnes of semi-milled or wholly milled rice that best represents the potential market through official channels.

Table 1: Zambia’s Imports of rice, 2010 to 2014 (MT)

Year

HS Code

Total 100610 100620 100630 100640

Rice In The Husk (Paddy Or

Rough)

Husked (Brown) Rice

Semi-Milled Or Wholly Milled

Rice Broken Rice

2010 80 10 4,873 6,509 11,472

2011 164 87 1,259 4,908 6,418

2012 212 0 2,671 14,745 17,627

2013 930 15 3,650 13,871 18,466

2014 304 55 3,288 6,498 10,146

Source: COMTRADE DATA

Figure 1: Composition of Zambia’s Rice Imports, 2014

Source: Based on COMTRADE data


South Africa and Pakistan are Zambia’s key suppliers of semi-milled and wholly milled rice accounting for over half of the volume of rice imports in 2014. Malawi is in third position accounting for a further 17% of the volume of imports or 500 tonnes. Mauritius is a new supplier in fourth position supplying rice from one of the new boutique rice producers on the island. . India is in fourth position accounting for a further 10% of supply.

Interestingly Tanzania has fallen away as a supplier through formal channels. The country is however an important supplier to the informal sector.

Table 2: Top Ten Sources of imports of Semi-Milled or Wholly Milled Rice (HS100630)

Rank Origin Import Volume (MT) Percentage

of total Growth 2011

to 2015 2011 2015

1 South Africa 277 1,209 37% 336%

2 Pakistan 388 561 17% 45%

3 Malawi 452 499 15% 11%

4 Mauritius - 390 12%

5 India 23 316 10% 1280%

6 Hong Kong - 125 4%

7 Mozambique 30 60 2% 98%

8 Viet Nam 70 55 2% -21%

9 Thailand 5 46 1% 817%

10 United Arab Emirates

2,375 21 1% -99%

Grand Total 4,873 3,288 100% -33%

Source: Based on COMTRADE data

1.2 Exports

Zambia exports small volumes of rice almost exclusively to the DR Congo. Rice is primarily exported in the husk.


Table 3: Zambia’s Exports of rice, 2010 to 2014(MT)

Year

HS Code

Total 100610 100620 100630 100640

Rice In The Husk (Paddy Or

Rough)

Husked (Brown) Rice

Semi-Milled Or Wholly Milled

Rice Broken Rice

2010 14 - 12 18 44

2011 0 0 28 3 32

2012 1,319 5 297 240 1,860

2013 9 4 - 98 110

2014 285 - 19 45 349

Source: COMTRADE data

1.3 Informal Trade

Informal trade in rice in Zambia is extremely prevalent. The largest input into this sector is Mbeya/Nakonde rice from Tanzania (although there is some disagreement on the source with the Rice Association maintaining that this rice is actually frown in Zambia and then taken to Mbeya in Tanzania for processing).

Given that the trade is informal it is difficult to quantify although estimates point to some 60,000 MT of Nakonde rice entering Zambia annually through informal channels. Not all of this rice is consumed in Zambia. A large portion of the rice transits Zambia on its way to Angola and the DR Congo. The rice is reportedly kept in warehouses at Jembe and Kasumbalesa from where it is transported by informal traders into these two countries. An estimated 8,000 tonnes of rice is brought in through these channels from Malawi.

According to the Zambia Rice Federation, there is an estimated 15,000 MT rice deficit in Zambia annually Given that official imports are in the region of 10,000MT, once can assume that informal trade amounts to between 5,000 and 10,000MT per annum.

1.4 Local Production

Rice is grown in Zambia predominantly by small-scale farmers under rain-fed conditions. Rice is grown in all the ten provinces of the country with Western, Muchinga, Northern, Eastern and Luapula provinces being the major production areas. Zambian consumers have a preference for aromatic rice and the major varietals grown are therefore Mongu, Nakonde and Chama rice. In 2014/2015 season, there were 42,984 hectares of rice under cultivation in Zambia with expected production at 25,514. This is 50% of the production achieved in previous years and Ministry of Agriculture has attributed the reduction to the late onset of rains which led to the late planting of crops and the poor distribution of rainfall. Overall yields per hectare in Zambia are relatively low at an average of 1.37 MT/ha over the last five years.


Table 4: Rice: Area planted, Area Expected to be Harvested, Expected production, Yield Rate, Expected Sales and Fertilizer Applied

Area planted

(ha)

Area expected

to be harvested

(ha)

Expected production

(MT)

Yield (MT)

Expected total sales (MT)

Quantity of basal fert used

(MT)

Quantity of top

fert used (MT)

2014 / 2015 42,984 17,907 25,514 1 12,728 243 211

2013 / 2014 40,974 33,207 49,640 1 29,751 104 82

2012 / 2013 38,520 31,621 44,747 1 21,432 128 67

2011 / 2012 31,388 26,265 45,321 1 22,999 79 75

2010 / 2011 33,995 27,496 49,410 2 26,797 72 86

Source: Central Statistics Organisation

1.5 Consumption

According to JICA’s figures, consumption of rice in Zambia is between 60,000 and 65,000 tonnes per annum. Local production always falls short of meeting this demand and the annual shortfall of around 15,000MT is imported. As illustrated in Table 5, the deficit in the 2015/2016 marketing year is far higher at 35,000 tonnes as a result of the poor local crop.

The government has various policies that are aimed at self-sufficiency and increased production such as subsidies on inputs and purchases through the Food Reserve Agency but these have some way to go before they are realised. Since 2002, local demand has never been met through local production.

Zambia has recently completed a National Rice Development Strategy that was due to be launched at the end of February 2016. The strategy covers the period 2016 through to 2020 and aims to facilitate growth and development of the rice sub-sector. The Strategy highlights that it will take a while for Zambia to reach self-sufficiency and that the gap between supply and demand is actually increasing due to a number of factors including:

An increasing population

Growth in the Middle class

A shift in middle income consumption from maize to rice

The resultant increase in per capita consumption

This is reflected in consumption figures Between 2005/6 and 2014/15 rice consumption increased from 24,673 tonnes to 59,728 tonnes, an increase of 91% in per capita consumption. Figure 2 illustrates this trend and reflects a peak consumption in 2011/12 of 64,164 MT or 4.76kg per capita.


Table 5: National Food Balance, Paddy Rice, for the 2015/2016 Agricultural Marketing Season

Value: Metric Tonnes

A: Availability Opening Stocks (1st May 2015) 2,239

Total Production (2014/2015) 25,514

Total Availability 27,753

B: Requirements: Staple food requirements: Human consumption 58,477

Strategic reserve stocks -

Industrial Requirements: 3,000

Losses 1,276

Structural cross-border trade -

Existing export commitments -

Total requirements 62,753

Surplus/Deficit -35,000

Source: Central Statistics Organisation, Based on the 2014/15 MAL/CSO Crop Forecasting Survey and

MAL/CSO/Private Sector utilisation estimates

Figure 2: Estimated per Capita Rice Consumption

Source: MAL Food Balance Sheets


2.0 Assessment of Competition in the Formal Retail Sector

A total of 23 brands of rice have been identified in formal retail channels in Lusaka. The majority of rice available is from Asian sources namely Thailand, Pakistan and India. There are a few local rice’s available such as Chama Rice, Mongu Rice and Nakonde Rice. From a Malawian perspective the Kilombero rice would compete directly with the Nakonde rice which is retailing at US$4.60 for 2kg in formal channels Basmati rice is enjoyed by the Asian population but genuine basmati is extremely expensive and sales are thus limited Most brands are presented in a variety of pack sizes namely 1kg, 2kg, 5kg and 10kg. Pack sizes of less than 1kg are not very popular. Most rice is packaged in plastic packs.

The clear market leader is Mother’s Pride. This is the brand of the National Milling Company, a local packer that purchases imported rice via traders and packs for the retail sector in Zambia. The product is well promoted and competitively priced. The Mariana Thai rice packed in Mozambique is also very competitively price and is gaining in popularity.

The competition in the rice market at the formal retail level is tough. There are numerous brands on the market competing for a limited market. As a result differentiating an offering is important and importers and retailers expect promotional support on brands.

On differentiating aspects for example, on wholesaler who only imports and stocks Tastic rice does so because this rice is slightly different to other rice’s available on the market and is parboiled. Dealing in a parboiled brand which is priced on the high side for the average Zambian consumer further gives them an entrée into the hospitality sector which consumes a great deal of rice and is not too price sensitive. Tastic is further seen as a brand with a long history of reliable supply that lives up to its by-line: “Cooks perfectly every time”. An additional bonus with this brand is the Tastic 10kg pack is robust and has a solid handle that allows it to be used as a shopper once the rice is finished.

All suppliers into retail channels must participate in in marketing and promotion of the rice through flyers, leaflets, billboard advertising and radio adverts. Generally the cost of this promotion is split between the local importer and the foreign supplier.

There are definite consumption peaks for rice in the Zambian market. These peaks are over Christmas and Ramadan. Demand over this period is for the smaller 1kg and 2kg packs which are included in the gift hampers that the retailers put together over these periods. Over these periods promotional campaigns are particularly important. Both retailers and suppliers find that free promotional give-aways are very effective. For example, if someone buys a 50kg bag of rice they get 2kg free or if they buy any 2 bags of rice they get 1 kg free.

Total retail mark-ups in Zambia are anywhere between 30% and 35%. The wholesale to retail mark-up is around 20%.


Table 6: Pricing of Rice in Formal Retail Outlets in Zambia

Brand Name Type of rice Country of

Origin

Name of

manufacturer/

packer

Pack Size Nature of

pack

Retail price

(ZMK)

Retail

price US$

Allsome Long grain Thailand Willowton Group,

South Africa

10kg Plastic K149.99 13.15

5kg Plastic K74.99 6.58



500g Plastic K7.99 0.7

Chama Rice Wild Zambia Conservation

Trading Centre

5kg Plastic K57.10 to

K98.99

5.01 to 8.68


K41.99

1.84 to 3.68


K11.30

1.84 to 0.99

Delicious Nakonde rice Zambia/

Tanzania

Mlodia

Enterprises

Limited

5kg Plastic K95 8.33


Diamond Basmati Pakistan 5kg Sack bag K120 10.52

D'lite Long grain/

Parboiled

Thailand/India/

Pakistan/Brazil

Willowton Group,

South Africa



K116,50

6.52 to

10.22


K30

3.99 to 2.63


K16

1.20 to 1.40

Eatwell Long

grain/White

rice

Zambia Zambian 1kg Plastic K10 0.88

Excella Thai

rice/Parboile

d

Thailand Surface/Wilmar,

Zimbabwe


Food Lovers Long grain/

Parboiled

Thailand/India Packed for Food

Lover's South

Africa


Long grain/

Parboiled/

Thailand/India 1kg Plastic K19.9 1.75

Grandhi's Basmati . Lusaka 2kg Plastic K78.0 6.84

Kahinoor Basmati India Kohinoor Foods

Limited


K259.90

16.74 to

22.79

Katunjilas Thai rice Thailand Propak

Distributions &

Logistics Limited



Mariana Parboiled Thai from

Zimbabwe

office of Ayan

Ayan Trading

Limited,

Mozambique



White rice 2kg Plastic K30 2.63





Origin

Name of

manufacturer/

packer

Pack Size Nature of

pack

Retail price

(ZMK)

Retail

price US$

Mealile White

rice/Long

grain

. Superior Milling 5kg Plastic K71.3 6.25

Mongu Rice Mongu rice Zambia Chibert General

Trading


Mothers'

Pride

Jasmine Thai National Milling

2.5kg Plastic K80.90 to

K59.50

7.09 to 5.22

Mongu rice Zambia 2.5kg Plastic K38.99 to

K41

3.42 to 3.60

Parboiled/

Brown



K65.90

3.85 to 5.78


K96

5.60 to 8.42

Super Brown . 5kg Plastic K78.75 6.91

10kg Plastic K143.75 12.61

White rice 5kg Plastic K66.95 5.87


K38.78

2.66 to 3.40

Nakonde Pure

Nakonde

Zambia Skyluck

Enterprise


Platinum Parboiled/Ba

smati

India Platinum Projects

India


Quality Mongu rice Zambia National Milling 5kg Plastic K130 11.4

Riscossa

Superfino

Long grain India Shakti Bhog

Foods Limited


Sali Nakonde rice Zambia/

Tanzania

1kg Plastic K19 to K22 1.67 to 1.93


K40

3.29 to 3.51

Shakti Bhog Long grain India Shakti Bhog

Foods Limited


Plastic K29.7 2.6

Spekko Long

grain/Parboil

ed

Thailand Sasko Grain,

South Africa



Tastic Basmati India Tiger Consumer

Brands, South

Africa



Bonet/White

rice

USA 2kg Plastic K38.99 3.42

Brown Thailand 1kg Plastic K23.90 to

K55.9

2.10 to 4.90


K47.90

3.33 to 4.20

Brown &

White

Thailand 1kg Plastic K20.55 to

K29.99

1.80 to 2.63



Origin

Name of

manufacturer/

packer

Pack Size Nature of

pack

Retail price

(ZMK)

Retail

price US$

Brown/Wild Thailand 1kg Plastic K28.69 to

K35.56

2.52 to 3.12

Long grain Thailand 200g Box K26.1 2.29

Long grain/

Parboiled

Thailand 10kg Plastic K272.2 23.87

Long grain/

Parboiled


K14.99

2.01 to 1.31

Long grain/

Parboiled

Thailand 5kg Plastic K130 to

K82.40

11.40 to

7.23

Long grain/

Parboiled


K29.99

2.98 to 2.63

Long grain/

Parboiled

Thailand 500g Plastic K8.3 0.73

Source: Survey of eight retail outlets in Lusaka


3.0 Investigation of the Market for Loose Rice

3.1 Distribution

Lusaka has an active informal sector through the two main markets in the city: Soweto Market and City Market. The rice sold in the informal markets reaches traders through two channels: through traders dealing in rice traded informally across the border with Tanzania and through wholesalers located in Lusaka who are importing rice directly.

The traders dealing in Tanzanian rice will take a truck to the Tanzanian border where they will purchase bags of Nakonde rice. This rice is brought into the country through informal channels. This is transported to Lusaka and the traders will park their trucks outside Soweto market where the market traders will come to purchase their requirements. The Nakonde traders generally sell the rice in 200kg bags which are then broken and sold in smaller quantities to consumers. Some of the City Market traders buy directly from the Nakonde traders and others who cannot afford the 200kg bag will purchase 50kg bags from the Soweto Market traders. In the informal markets rice is sold by the “meda” a measure of either a tin can or a plastic container equivalent to around 5kg. In reality there are numerous sizes of “meda’s” ranging from the 5kg through to a 200g measure.

The second wholesale channel supplies Zambian rice and imported Thai and Pakistani rice. The traders in Soweto and City markets order directly from these wholesalers who are located in town close to the markets. Wholesalers servicing the market include Nyimba Investments Ltd, Rahman Rawuf Wholesalers Ltd, Tanish Enterprises Limited, and African Kayonde Wholesalers Ltd. In addition to individual brands such as White Fish which one wholesaler imports from Pakistan, the wholesalers all sell Mariana: Thai rice from Mozambique. The Mariana rice is a good quality rice sold at relatively low prices.

Figure 3: Distribution into the Informal Sector in Lusaka

Nakonde Border (informal)

Zambian Traders

Soweto Market traders

City Market traders

Wholesalers who import directly

End consumers


It proved to be difficult to conduct interviews with the small wholesalers as they were reluctant to answer research questions, the general response to the potential for imported rice from Malawi was however the same. Having looked at the rice samples, the wholesalers predicted Kilombero rice would be good for Zambian tastes and preferences and would thus receive a good market response. They all indicated that a competitive price would need to be taken into account.

This sentiment is echoed by the traders in the Soweto and City markets who, without exception, indicated that Kilombero rice would do well in Zambia because it seems to be like Nakonde rice. They further indicated that the route to market would be through one of the wholesalers supplying the traders in the informal markets.

As an indication on a competitive price, one wholesaler imports White Fish rice from Pakistan. It sells for Kw415 (US$36) for the 50kg bag. The Mariana rice in the photograph sells at Kw380 (US$33) for the 50kg bag. Indications are that Malawi rice lands at around 3Kw more per kilogram than the Thai rice which makes it too expensive.

The City and Soweto market traders differ in their frequency of purchases from the wholesalers with some reporting that they purchase 1 tonne per week and others buying 600kg every 4 days. The most common frequency of purchase is 200kg every 2 days.

3.2 Pricing of Loose Rice

A 200kg bag of Nakonde rice from the Tanzanian traders is available for K2,600 (US$230).

This is equivalent to 40 meda’s (The large 5kg measure indicated in the photos below). This

amounts to Kw13 per kilogram and the traders sell this for between Kw15 and Kw18 per

kilogramme, a mark-up of between 15% and 38%. In June and July rice prices drop

dramatically as the Zambian harvest begins. Prices then rise back to normal levels from

August.

As shown in Table 6, there is a marked price differential between Nakonde and Mongu rice

and Thai or Pakistani rice. This reflects the better quality of the regional rice and the

consumption preference.


Various containers in City Market Rice repacked in small plastic bags

Table 7: Pricing of Loose Rice in Soweto and City Markets, Lusaka

Weight (Meda)

Nakonde/Mongu Thai Nakonde/Mongu Thai

Kwacha USD

5kg 90 80 75 50 7.89 7.02 6.58 4.39

4.5kg 70

6.14 - - -

4kg 80 60

7.02 5.26 - -

3.5kg 50

4.39 - - -

2.5kg 50 45 40 30 4.39 3.95 3.51 2.63

2kg 50 30

20 4.39 2.63 - 1.75

1.5kg 30

2.63 - - -

1kg 25 10

2.19 0.88 - -

500g 15

1.32 - - -

200g 10

0.88 - - -

Packet of indeterminate weight 5

0.44 - - -

Source: Traders in Soweto and City Markets

3.3 Consumer Preferences and Buying Habits

The preference amongst consumers at the informal markets is for an aromatic rice at an

affordable price. For this reason the main demand is for the Nakonde rice from Tanzania and

the Mongu and Chama rice from Zambia. Some of the traders in the informal market sell

Thai or Pakistani rice because it is cheaper than the other rice’s. The taste of Thai rice is

however not considered as good with one trader saying it tastes like water.

The most commonly purchased volumes are 5kg and 2kg. There appears to be no pattern in

frequency of purchase with some consumers planning in advance and purchasing for the

week, others purchasing every third day and some buying a small quantity on a daily basis.


4.0 Distribution Channels

Given the competitive nature of the rice market in Zambia, distribution channels are relatively short and direct.

There are two grain traders based in Lusaka that are involved in the import of rice: Zdenakie and ETG. Both companies have extensive warehousing in Lusaka where the rice is stored. Both companies import rice packaged in50kg bags which are on-sold to smaller traders servicing the informal markets or down packers. The latter are small entities that pack for retail stores. They generally do not have the infrastructure to get involved in imports and therefore utilise the services of a trader. Imports through this channel amount to around 4,000MT per annum. From a Malawian perspective, both of these companies have offices in Malawi through which imports could be channelled.

The main packers namely National Milling and Superior Milling generally import their requirements directly. The packers will buy some local rice and then import from Thailand and Vietnam. The packers also utilise the services of traders based in Beira.

The wholesalers are an important link in the distribution chain. There are a few large wholesalers based in Lusaka that service the formal retail sector and the hospitality sector. GATBRO is a large wholesale distributor working in both the formal and informal sectors. The company has two large warehouses in Lusaka – one for formal retail and one for informal retail. In the formal sector their key clients are Pick ‘n Pay, Food Lovers and Shoprite and they keep stock for these retailers and dispatch directly to stores as and when required. The second warehouse supplies directly to traders, wholesalers, smaller retail operators and mini-markets. Some of the smaller wholesalers such as PAZA Trading servicing the small retailers in the formal market and traders in the informal market are also importing rice directly. They import packed rice in 50kg bags which are on sold to retailers and traders.

L&A Distributors are another of the large wholesalers based in Lusaka. They import most of their requirements from South Africa and supply into both the formal retail sector, the small independent retailers and the hospitality sector. In the rice market they are particularly strong in supplying the hospitality sector.

The formal retail sector is supplied extensively by the local wholesalers and packers and, in the case of South African retailers, they are also supplied directly from their Central Distribution Centres in South Africa. The outlets would stock a Malawian rice but would not be involved in the import of the product preferring to deal with a local entity.


5.0 Requirements of Rice Buyers

5.1 Current sources of supply

The predominant sources of supply on imported rice are Pakistan, India, Vietnam and Thailand. Rice imports from these countries are channelled through the Port of Beira and then trucked into Lusaka. The primary reason for importing from these countries is price. Other reasons cited for choice of supplier included ease of access to companies and existing relationships. It appears as though the rice traders based in Beira play an important role in servicing the Zambian market. These traders make it very easy for Zambian importers to access product from a regional source.

5.2 Price points on imports

Companies are generally reluctant to divulge price information for a survey of this nature. Price is however the decider and Malawian exporters would need to be able to compete on price with Asian suppliers. One importer was prepared to provide an indication and maintains that Malawian suppliers would need to look at a price between Kw6 and Kw8 (US$ 0.50 to 0.70) per kg to be competitive. They are currently paying Kw8.2/kg on rice from Thailand.

5.3 Commercial practices

The commercial specification for rice in Zambia is 5% broken and reasonably white in colour. The importers, wholesalers, packers and retailers have all indicated that a good quality product is essential .The rice needs to look clean and uniform in size and shape. Order sizes vary and are anywhere between 120 tonnes per month to 500 tonnes every three months to 1000 tonnes every six months to 2000 tonnes per month.

Rice is imported packed in 50kg bags for wholesalers and packers, 25kg bags for “lower

modern retail” or small independents, and 1kg, 2kg, 2.5kg, 5kg and 10kg packs for the

formal retail sector. Not all brands are available in all sizes and an initial 50kg, 2kg and 1kg

pack sizes would suffice. Packaging is in plastic bags except for the 50kg bags which are

woven. Package labelling needs to be in English and needs to include: Manufacturers name,

expiry date and nutritional information.

Suppliers are expected to provide support to building the brand in the Zambian market. This would involve an agreement on promotional give-aways and a cost-share on billboards, radio advertising, flyers and gondola ends in retail outlets.


5.4 Knowledge and perception of rice from Malawi

The mainstream importers, packers and wholesalers have not imported rice from Malawi for a number of years. Imports reportedly stopped due to shortages in supply. Companies are however very open to relooking at a Malawian source of supply if certain considerations are taken into account.

The Zambian preference is for an aromatic rice and the general opinion is that Kilombero rice would match the Zambian taste preference perfectly. The feedback on the sample of Kilombero rice is that the colour is very good (white) and that it looks to be of a high quality. The feedback on the Faya rice was not as positive with companies commenting that the Faya rice looks dirty and should be properly cleaned before packaging and that it appears to have a high percentage of broken rice – higher than the required 5%.

The current retail packaging as shown by the samples was not well received. Generally the feedback was that the quality and strength of the bag, quality of the print, and the colours on the pack are poor. The packaging was not seen to be eye catching and the colour combinations were thought to be dull. The expiry date on one pack was rubbing off which should not be the case. The packaging would need to be improved to make it attractive to customers in Zambia.

The perception is that rice from Malawi is very expensive and that it would not be competitive in the Zambian market. A couple of companies have looked at Malawian rice recently but found the price too high compared to what is available from Asia. Concern was also expressed about consistent and reliable supply. There is a perception that supply from Malawi can be inconsistent.

5.5 Import Regulations and Customs Clearance

Zambia has adopted the ASYCUDA WORLD system for customs clearance which has created a number of delays in clearance largely because the system is often off-line. This has not been improved by the extensive load shedding taking place. The new system works on three Central Processing Centres (CPC): Ndola, Lusaka and Kabwe. When the goods arrive at the border the forwarding agent submits the documents electronically to the relevant CPC. Each submission is assigned to either:

Green: the goods can be immediately assessed and cleared

Yellow: the goods are placed on standby as there is a query with the documents

or contents

Red: the goods need to be physically inspected at the border. This inspection is

triggered by the ASCUDA system and the order to inspect can take up to a day to

come through. Grocery items such as rice are always assigned red.


When the system, works and there are no issues with the documentation, clearance is quick. If the system is down or the goods require inspection, the delays can be lengthy. Having the correct documentation is extremely important as incorrect documentation can delay a shipment for weeks as everything will stop until the error is corrected. This includes the SADC/ COMESA Certificate of Origin which will grant goods of Malawian origin duty free status. It is advisable to send the forwarder a pre-alert so that the documents can be checked before the truck leaves the exporters premises.

All rice imports into Zambia require an import permit. The initial approach by the importer is to the Mount Makulu Research Station who will issue a plant import permit. In order to issue this permit they require a phytosanitary certificate and detail on tonnages being imported, intended routing and a copy of an export certificate from Malawi if this is required. Once the plant import permit is issued it needs to be taken to the permit office at the Department of Agriculture. They will issue an import permit within 24 hours.

There is a COMESA Standard that is used for rice. A copy of the standard is provided in Annexure 1:


6.0 Opportunities and Challenges in Marketing Malawian Rice

There is a clear opportunity for Malawian rice suppliers in Zambia. The Kilombero rice specifically was well received both in terms of the apparent quality of the product and the fact that it is an aromatic rice which matches the Zambian consumer preference. The most popular rice in Zambia is the Nakonde rice which is perceived to be similar to the Kilombero rice. The Faya rice was not as well received and attention should be paid to the required Zambian specification for 5% broken rice which is reasonably white in colour.

There are various ways of approaching the market in terms of distribution channels: through a grain trader, through a wholesale distributor or directly to a packer. The volumes currently moving through the grain trader channel are relatively small at 4000MT per annum. There has however been an indication that if there was an established supplier of Kilombero rice, the trader would be able to drive sales and demand and build a network of off-takers in Zambia thereby growing the annual volumes. The Zambian company would need a firm commitment from the Malawian supplier around volumes and consistent supply so that they can sell with confidence. The requirement by the traders would be for 50kg woven bags.

Selling to the wholesale distributors is a second option. The volumes moving through these channels are far higher (between 800MT and 2,000MT per month for one company) and the commitment in terms of packaging and promotion would be far larger. This channel would provide access to the formal and informal sectors in addition to the hospitality sector. This channel further provides an opportunity for a house brand. One of the largest wholesalers have their own house brand and would be very interested in looking at Kilombero rice packed under their label. A less obvious positive about an involvement in a house brand is that it will provide the perception of the product being local. The foreign retailers are under a great deal of pressure to stock local products and Shoprite has indicated directly that they will give preference to Zambian rice as this is where their priority lies at present. It is for this reason that Shoprite stocks predominantly National Milling brands.

Whether it is a house brand or a Malawi brand sold through these channels, the rice needs to be of a good quality and needs to be competitively priced. It should be available initially in 50kg, 2kg and 1kg packs. A 5kg and a 10kg pack would complete the range. Success in the formal retail sector will require creating an awareness around the brand and the special qualities of Kilombero rice. Whilst the wholesalers will provide this service, the Malawian supplier will be expected to support the campaign through provision of marketing collateral and an agreement on cost-sharing.

The third option of channel is directly to a local packer namely National Milling and Superior Milling. Volumes through this channel are in the region of 4,500MT per annum. These companies would import in 50kg bags and would repack under their own labels at their facilities in Lusaka.

The Zambian rice market is extremely competitive. As indicated in a previous section, there are numerous brands available through retail and informal channels and it will require a great effort to launch and support a new consumer brand in Zambia. The brand leader, Mothers Pride is packaged locally by National Milling and offers a good quality rice at a competitive price Mother’s pride white rice retails at US$2.66 to US$3.40 for a 2.5kg pack and the local Mongu rice packaged under the brand sells at US$3.42 to US$3.60 for a 2.5kg pack. At an estimated retail mark-up of 30%, this would indicate that the retailers are buying


at around US$ 0.90 per kilogramme. The other real competitors would be the Mariana Thai rice packed in Mozambique and the Nakonde rice’s. The Mariana white rice sells at US$2.63 for a 2kg pack and the Nakonde rice sells at US$ 3.29 to US$4.60 for a 2kg pack. Assuming a 30% mark-up, this would place the Mariana rice at the same price level as the Mother’s Pride at US$0.90 per kilogramme and the Nakonde rice at between US$1.15 and US$1,60 per kilogramme. This suggests that there is a margin paid for better quality aromatic rice such as Nakonde rice. This is borne out by prices in the informal markets where there is a marked price differential between the Nakonde rice and the Thai rice – a 2kg measure of Nakonde rice sells for US$2.63 against US$1.75 for the Thai rice.

The logistics and regulatory environment in Zambia are relatively simple. Both Zambia and Malawi are members of SADC and COMESA and therefore enjoy preferential market access. The general customs tariff on rice in Zambia is 15% and rice of Malawi origin would enter duty free. In addition, Malawian traders can make use of the COMESA Simplified Trade Regime designed to allow smaller traders to claim trade preferences. All rice imports require an import permit although this appears to be relatively easy to obtain. Goods from Zambia entering Malawi will be cleared at the Chipata border post. The road from Chipata to Lusaka is very good and takes about half a day to drive.


7.0 Recommendations

The Kilombero rice from Malawi would be positioned alongside the Nakonde rice in the minds of the Zambian consumers. Nakonde rice is considered a premium product that is in great demand due to its aromatic flavour and high quality. Consumers reportedly prefer the Nakonde rice to the Asian rice’s as it has a strong aroma. The Malawian rice would need to be sold on the same premise – aromatic, good quality and differentiated from other rice’s on the basis that it is a unique varietal. The positioning of the product would be the same whether it is sold in informal markets, through formal retail outlets, as a sub-brand within a house brand or as a varietal to the packers to allow them to diversify their brand (Mother’s Pride Kilombero).

As indicated above, the market for packed rice in Zambia is extremely competitive and entering the Zambian market as a stand-alone Malawian brand would only be recommended if a company was prepared to put a great deal of time and monetary resources into building and promoting the brand in Zambia. The attractive options for entering the Zambian market appear to be supplying in 50kg bags to traders and packers who would then rebrand and repack whilst maintaining the unique “Kilombero” brand or getting involved in packaging Kilombero under a house brand for a wholesaler.

Supplying in 50kg woven sacks would require little change to the existing packaging from Malawi. Packaging a house brand in Malawi would require improvements to the existing packaging. The plastic needs to be stronger and more robust. The sample used in the existing pack developed a split after the second interview suggesting that the joins are not robust. The label design and print quality needs attention to ensure an attractive and well-printed pack. Some examples of packs on the shelves are given at the end of this section.

Generally the perception of rice from Malawi in Zambia is positive and the interest in exploring the opportunity is good. A few of the key players in the market are interested and open to an approach. Before approaching these companies it is recommended that the Malawian suppliers have all the required information available such as price, specification, available volumes, packaging, transport options and delivery schedules. A direct approach is recommended and a trip to Lusaka to meet with potential customers to discuss the offering and deliver samples would be well received. A number of the buyers visit Malawi regularly and a factory visit in Malawi would be appreciated. Given that Zambian buyers require a commitment from suppliers in terms of consistent and reliable supply, a factory visit would assist in making the buyer feel secure about the product and delivery. The success of Malawian rice in the Zambian market will however come down to price and whether or not Malawian suppliers are able to offer a competitive price.


Zimbabwe



1.1 Imports

In 2015, Zimbabwe’s total official rice imports amounted to 302,435 tonnes. Rice imports in 2015 increased by 58% over the 2014 level of 190,979 tonnes. As illustrated in Figure 1, rice imports fluctuate on a monthly basis with peak demand in August, October, December and February. It is important to note that some of the annual import volume is through NGO’s such as Miriro Children Care Network. Imports by NGO’s amounted to 46,000tonnes in 2015 meaning that imports of rice for commercial purposes amounted to 255,750 tonnes.

Figure 4: Volume of Zimbabwe’s Rice Imports, 2014 and 2015

Source: Ministry of Agriculture Statistics

Asian suppliers dominate rice supply into Zimbabwe. In 2015, Thailand was the leading source of supply accounting for 34% of the total volume of imports. South Africa was in second position accounting for a further 17% of volume. Given that South Africa does not produce any rice it can be assumed that this is rice of Asian origin. It is also most likely parboiled rice which is gaining in popularity in Zimbabwe. India and Pakistan fall into third and fourth position accounting for 16% and 15% of volume respectively. In 2015, imports from Malawi amounted to 2,630 tonnes. This reflects a positive increase over 2014 when 60 tonnes were recorded through official channels. Mount Mulanje rice is re-packaged in Zimbabwe by Victoria Foods and is available in most retailers.


Table 8: Origin of Zimbabwe’s Rice Imports, 2015

Origin Volume (MT) Percentage of total

Thailand 101,470 34%

South Africa 50,392 17%

India 47,945 16%

Pakistan 44,364 15%

Taiwan 40,302 13%

Italy 5,962 2%

UAE 5,425 2%

Malawi 2,630 1%

Singapore 2,130 1%

Vietnam 1,060 0%

China 404 0%

Mozambique 300 0%

Mauritius 30 0%

USA 22 0%

Source: Ministry of Agriculture Statistics

1.2 Exports

Zimbabwe does not export rice.

1.3 Informal Trade

It is difficult to get a reliable figure on informal trade in rice into Zimbabwe. A report published by a COMESA agency in 20131 suggests that Zimbabwe’s informal trade in rice is in the region of 1,250 tonnes per annum sourced from Mozambique, Malawi, South Africa and Zambia. This does not reflect a large proportion (less than 1%) of Zimbabwe’s overall rice imports and consumption.


Zimbabwe is not a rice producer although the Ministry of Agriculture has plans to start producing rice.

1 Cross Border Staple Food Trade Monitoring Bulletin, Alliance for Commodity Trade in Eastern and Southern Africa– ACTESA


1.5 Consumption

Given that Zimbabwe produces no rice locally, demand is met through imports and the level of imports therefore reflects consumption. In 2015, apparent commercial consumption of rice was 255,750 tonnes or 16.42kg per capita.

Consumption volumes of rice are increasing in Zimbabwe although maize meal is still considered the staple. Per capita consumption in 2014 was 12.8kg. Given the economic climate in Zimbabwe, rice consumption is linked to availability and operators in Zimbabwe report a number of new rice brands entering the market in 2014 and 2015. The availability of more rice would have a positive impact on consumption.



The rice market in the formal retail sector in Zimbabwe is extremely competitive. Over the last few years there has been an explosion of new brands on the shelves as local packers and wholesalers started to take advantage of the increasing demand for rice. During the process of conducting this research, a total of 32 unique brands were identified on shelves in retail outlets in Harare. A number of stakeholders interviewed indicated that there are currently too many brands on the shelves making it commercially competitive and confusing for consumers. Two of the rice importers currently packaging and selling their own rice brand indicated during interviews that they are getting out of the rice market as the competition is too stiff and the price pressure from Asian rice makes the rice business unviable.

Although all rice requirements are imported, there are very few imported brands available on retail shelves and those that are available tend to be premium rice brands such as basmati where the target consumer is less price sensitive. Most rice is imported in bulk and packaged locally as there is a tariff differential between packaged and bulk rice. This highlights the competitive nature of the market – the 15% tariff on imported rice packaged for retail sale is enough to make a brand uncompetitive. The tariff on packaged rice has created a number of rice packing enterprises in Zimbabwe with both local and regional investors such as the South African company Capital Eezi Foods investing in packaging equipment. The latter has established a packaging facility in the EPZ at Beit Bridge to pack their CAPRI brand of rice. From a government perspective the tariff has had the desired effect as bulk rice imports are creating employment and activity along the entire value chain.

The key Zimbabwe packers in the market are as follows:

Owned by Innscor Africa Ltd, National Foods have a rice packaging facility in Harare. The rice they pack is primarily from Thailand and they import via a third party trading company. Their premium brand is currently basmati. They do pack some regional Chama rice which they purchase directly from source in Zambia. The National Foods rice brands are Ma-Hat-Ma, Better Buy and Red Seal. Ma-Hat-Ma, alongside Ayan Trading’s Mariana rice, is, according to the retailers interviewed, the market leader in the Zimbabwean rice market with an estimated 23 to 24% share. National Foods also packs various house brands such as M&M which is packaged for the wholesaler Mohammed Mussa Ltd and the Choppies house brand.

Whilst not packaged in Zimbabwe, the Mariana brand of Thai rice supplied by the Mozambican trading company Ayan Trading through their office in Harare is rapidly gaining market share. As indicated by one wholesaler interviewed, the brand is taking the market by storm. Currently the market leader alongside Ma-Hat-ma brand, Mariana reportedly enjoys an estimated 24% market share. The retailers report that the brand is so successful because it is a good quality rice that is sold at a competitive price. The importers have also focused on getting distribution channels right and push product through the wholesale networks ensuring that it is consistently available.

Victoria Foods import and pack rice from Thailand, Pakistan and Malawi. The company does not import directly, preferring to utilise the services of traders who deliver directly to their depots. The company pack Thai and Pakistani rice under the Victoria brand and Malawi rice under the Mount Mulanje brand. Victoria Foods estimate that the company has a 20% share of the rice market.


The Grain Marketing Board (GMB) is a parastatal that packs rice under their own brands, SILO and Pagoda. GMB flight tenders for the supply of rice, always in bulk. The tender process looks at a range of factors – price, reputation, past relationship and quality. Price is however the most important. It is usually the big traders who tender on the GMB contracts. Silo brand reportedly enjoys a 10% share of the rice market.

Surface Wilmar is a relatively new player in rice market. Surface Investment is an established Zimbabwean company and Wilmar International recently purchased the (Industrial Development Corporation) IDC’s stake in company. The new entity, Surface Wilmar, is expanding into provision of a full range of basic foodstuffs including rice. The company currently packs their own rice under the Excella and Fiesta brands.

Probrands are down packers of various basic commodities including rice. The company packs rice under the Probrands brand label which includes white, parboiled Jasmine and Basmati. The bulk of Probrands’ rice is sourced from Thailand.

FlikNik are a relatively new player in the market in terms of their own rice brand. FlikNik used to pack the CAPRI brand for Capital Eezi Foods before the company decided to invest in a facility at Beit Bridge. FlikNik subsequently launched their own brand of rice known as YEBO. FlikNik is placing a great deal of attention on marketing the brand and sales volumes are increasing monthly as the product is made available through more and more retail outlets.

Mega Market is a wholesale and retail chain within the Meikles Group. The company import rice and pack under their own brand label – Mega. The rice is sold in Mega Market Stores and in other retail outlets.

Blue Ribbon has recently been purchased by the Tanzanian company, Bakhresa Group. They are packaging rice in Zimbabwe under the name Blue Ribbon Super Thai Rice. The company utilise the services of a local trader to import their requirements.

Table 9: Pricing of Rice in Formal Retail Outlets in Zambia


Origin

Name of

manufacturer/packer

Pack

Size

Nature of

pack

Retail

price US$

Aroma

White long

grain

India/

Pakistan Jaran 2kg plastic bags 1.45

Parboiled India/

Pakistan Jaran 2kg plastic bags 1.35

Aunt Sally's White long

grain

Thailand

Devbrands (Gatbro

Zambia) 10kg Hard plastic 16.95

Thailand

Devbrands (Gatbro

Zambia) 5kg Hard plastic 8.50

Better Buy

parboiled rice Thailand National Foods 10kg Hard plastic 7.56

long grain Thailand National Foods 2kg plastic packs 1.45 to 1.77

Thailand National Foods 5kg plastic pack 3.55

Biryana D'lite Basmati Rice India/

Pakistan Willowton Group 5kg Hard plastic 9.50

Capri Parboiled rice Thailand Flik-Nik 10kg plastic bags 8.25



Origin

Name of

manufacturer/packer

Pack

Size

Nature of

pack

Retail

price US$

Care Rice long grain Pakistan

2kg plastic bags 1.55

Choppies Parboiled rice India Choppies 2kg plastic bags 1.49

India Choppies 5kg plastic bags 4.55

d'Lite long grain

parboiled Asia Willowton Group 2kg Plastic 1.60

Excella Premium

white rice

Thailand Surface Wilmer 10*2kg plastic pack

14.10 to

16.90

Thailand Surface Wilmar 2kg Plastic pack 1.60 to 2.85

Thailand Surface Wilmer 5*5kg sack 21.10

Thailand Surface Wilmer 5kg sack 4.79

Gold

Premium Thai

White Rice Thailand Pista Enterprises 2kg Plastic pack 1.69

Long grain

parboiled Thailand Pista Enterprises 2kg plastic bags 1.60

White long

grain Thailand Pista Enterprises 10kg Sack 6.99

Parboiled Thailand Pista Enterprises 5kg sack 3.45

Mahatma

white rice

long grain

Thailand National Foods 10*2kg plastic pack 22.80

Thailand National Foods 10kg plastic bags 12.50

long grain,

low starch

Thailand National Foods 1kg plastic packs 1.25 to 2.12

Thailand National Foods 2kg plastic packs 1.75 to 4.99

Mohammed

Mussa

Parboiled India and

Pakistan Flik-Nik 10*2kg plastic bags 13.00

White rice Asia Ayan Trading 5 kg Plastic packs 3.30

long Grain

Parboiled

India and

Pakistan Flik-Nik 10kg Sack 6.30

Mariana

White rice

Asia/ Thailand Ayan Trading 25kg sack 14.70

Thailand Ayan Trading 10*1kg plastic packs 7.30

Asia/ Thailand Ayan Trading 10*2kg plastic packs 14.70

Thailand Ayan Trading 10kg sack 9.65

Thailand Ayan Trading 1kg plastic packs 1.29 to 1.85

Parboiled Thailand Ayan Trading 1 kg plastic packs 1.24

Thailand Ayan Trading 2 kg Plastic 1.60

Regular

White Rice Thailand Ayan Trading 2kg plastic pack 1.85 to 1.90

Mega

long grain

Thailand Mega 2kg plastic packs 1.46

Thailand Mega 10*2kg plastic pack 13.90

Thailand Mega Market 10kg sack 7.35 to 8.10

parboiled

long grain

Thailand Mega Market 10kg sack 7.90

Thailand Mega 2kg Plastic pack 1.60 to 1.70

white rice Thailand Mega Marketing 2kg plastic pack 1.35 to 1.60

Premium

Long Grain Thailand Mega 5kg Sack 3.99 to 4.60



Origin

Name of

manufacturer/packer

Pack

Size

Nature of

pack

Retail

price US$

Rice

Mesostream brown rice Zimbabwe

Mesostream

Enterprises 2kg plastic 8.70

Mt Mulanje Malawi Rice

Malawi Victoria Foods 2kg plastic bags 2.89 to 3.13

Mt Mulanje Malawi Victoria Foods 10*10kg plastic 28.45

Pagoda White rice Asia

Grain Marketing

Board 2kg Plastic pack 1.85 to 1.99

Perfecto White rice Thailand Ayan Trading 2kg plastic pack 2.10

Premier Premium

Quality Rice Asia Premier Milling 5kg plastic bags 4.50

Probrand

Premium white

long grain,

5% broken Thailand Probrand Packers 1kg plastic packs 0.98

Probrand

Value Rice

long grain,

15% broken Thailand Probrand Packers 2 kg plastic packs

1.26 to 1.59

to 1.65

Probrands

Premium rice Thailand Probrands 5kg Plastic pack 3.99 to 4.69

100% Thai

Rice Thailand Probrands 2kg Plastic pack 1.99

Basmati Thailand Probrands 2kg plastic pack 4.50 to 4.79

jasmine Thailand Probrands 2kg plastic pack 4.12

Value rice Thailand Probrands 10*2kg plastic pack 14.90

premium rice Thailand Probrands 10kg sack 7.55 to 9.10

brown rice Thailand Probrands 2kg plastic 2.35

Thailand Probrands 2kg plastic bags 2.50

Red Seal

5% Broken

long grain Thailand National Foods 2kg plastic packs 1.80

White rice,

cholesterol

free Thailand National Foods 10kg

hard plastic

packs 8.20

white rice Thailand National Foods 2kg hard plastic 1.60 to 1.65

Value rice Thailand National Foods 5kg plastic bags 4.15

Savemor Long grain

rice Thailand Savemor Packaging 2kg Plastic pack 1.39

Silo

Selected

quality Asia

Grain Marketing

Board 2kg Plastic pack 1.65 to 1.75

long grain Asia GMB 2kg plastic pack 1.55 to 1.69

parboiled Asia GMB 2kg plastic pack 1.75

long grain Asia GMB 10*2kg plastic pack 15.00

Spar Rice Premier Long

grain Thailand Savemor Packaging 2kg plastic packs 1.79

Sunrise White long

grain Pakistan Manyame Milling 2kg plastic bags 1.65

Tastic Nature's

Brown Rice Asia Tiger Brands 1kg

hard

cardboard

box 3.79

ThaiVillage white rice

long grain Thailand Hackville Enterprises 2kg sack 2.80



Origin

Name of

manufacturer/packer

Pack

Size

Nature of

pack

Retail

price US$

Valley Harvest Long grain

parboiled India/

Pakistan

Valbros Ente (SA)/

Packday Investments

(Zim) 2kg plastic bags 1.50

Victoria Premium

white rice Thailand Victoria Foods 2kg plastic 1.60 to 1.69

Victoria Spring

Harvest

Premium

Oriental Rice Thailand Victoria Foods 2kg plastic bags 2.20

Yebo

Long grain

white

Thailand Flik-Nik 5kg plastic bags 3.85

Thailand Flik-Nik 2kg plastics 1.64

Parboiled Thailand Flik-Nik 2kg plastic bags 1.54

Source: Survey of eight retail outlets in Harare



3.1 Distribution

Zimbabwe has an active informal sector centered on low income,

high density areas in the large cities. The estimates on the

percentage of the population supplied through informal sector

range from 10% to 25%. The main informal markets in Harare

are Mbare Musika, Chitungwiza and Highfields.

The distribution channels are direct. The traders in the informal

markets buy their requirements directly from wholesalers like

Mohammed Mussa, Metro Peech, Norman Richards, and Trade

Center. The rice is purchased in 25kg bags and sold loose by the

cup. The rice available in the markets is from Thailand, India and

Pakistan. The Mariana Rice (Ayan Trading) and the Super Gold

(Agricom Trade Exchange) both from Thailand were very

prevalent in the informal markets at the time of conducting

interviews.

There used to be traders that sold Malawi rice to the informal

traders but this rice is now too expensive. The market share that

Malawian rice enjoyed in the informal sector has reportedly been

taken over completely by Asian rice. The reasons provided by

the informal traders for this decline in market share included

inconsistent supply, traders failing to cope with economic

challenges, inflation and the change of currency from

Zimbabwean Dollars to US Dollars.

Credit terms are important to the informal sector. Those that

have a relationship with a wholesaler are able to purchase on

credit with payment in two to three days.

3.2 Pricing of Loose Rice

The price that traders in the informal market pay from

wholesalers varies. The average price reported by the informal

traders is US$14.50 for a 25kg sack (US$0.58 per kilogramme).

All the rice found in the informal markets is being sold by the cup

measure at $1 per 4 cups. The 4 cups translate roughly into a kilogram.

The informal traders report that although the Malawi rice is excellent, it is simply too

expensive. It sells for around US$2.00 per kg which would translate into US$50 for a 25kg

sack, almost 245% more than the Thai rice currently being purchased. Malawi rice was

found in a small kiosk next to the bus station and was being sold at US$2.30 for 1kg, 130%

more than the Thai rice available in the informal markets.

Insight into Informal Trade in Malawi Rice

Interview with a man that works for a bus company on the Lilongwe – Harare route

Mr X takes specific orders from people in Harare for Kilombero rice and then the bus drive purchases these requirements in Malawi and brings them back. In January 2016 he did about 1 tonne of Kilombero rice – 20 x 50kg sacks. He charges US$2.00 per kg with a discount of US$5 per 25kg. In Malawi the price is US$1.00 per kg for good quality rice and US$0.50 for poor quality rice. He is therefore making a good profit as he does not have to pay transport. The people that have to pay transport are still charging US$2.00 per kg but they do not discount and their profit margins are smaller.


Rice available in Mbare Market, Harare


3.3 Consumer Preferences and Buying Habits

The preference amongst consumers at the informal markets is for an aromatic rice.

Consumers also prefer rice that cooks well, has less starch and which is affordable. For this

reason, the Kilombero rice is fondly remember by traders who used to purchase the rice.

The Malawi rice was very popular because it was tasty and aromatic.

Although the main market is still for white rice, parboiled rice is becoming more popular. The

demand for parboiled has reportedly been driven by the diaspora living in South Africa. In

South Africa parboiled rice is very popular and the diaspora has developed a taste for the

rice. On returning to Zimbabwe, these individuals bring back parboiled rice.

During festive seasons and during school holidays there is greater demand for rice and

traders report a peak in volumes.

Zimbabwean consumers are well-informed and pay attention to health issues. For this

reason, consumers avoid any product that is not GMO-free. Consumers are also concerned

about the source of rice sold in informal markets and the hygiene of the traders. It is

concerning to consumers that informal traders are not regulated by the Agricultural

Marketing Authority and that there are no phytosanitary checks. The preference for the Thai

rice is that it is well packaged and labelled and looks hygienic. Given the relatively low price

of rice in formal markets in Zimbabwe at present, a number of consumers would choose to

buy through these channels where health and phytosanitary issues are guaranteed.



In 2015, there were 49 companies that imported rice into Zimbabwe. As shown in Figure 2, 49% of the volume of imports was through traders, 35% directly by packers and 16% was by NGOs. Negligible quantities are imported directly by retailers and the hospitality sector.

Figure 5: Imports of Rice by Distribution Channel, 2015

Source: Analysis based on Ministry of Agriculture data

The distribution channels are therefore relatively direct with bulk rice for commercial use being imported either by traders on behalf of packers or directly by the packers. A number of the larger packers including National Foods, Victoria Foods, Blue Ribbon Foods and FlikNik prefer to make use of the services offered by traders as this eliminates the need to obtain permits and organise transport and customs clearance. By using a trader, the rice gets delivered directly to the packer’s depot.

The wholesale channel is the link between the traders and packers and the informal markets and the smaller formal retailers such as Nyaningwe Supermarkets. The large formal retailers such as Choppies, TM Supermarkets, Spar and OK Mart are serviced directly by the packers and selected traders such as Ayan Trading. These companies are expected to deliver requirements directly to a central distribution centre in the main cities for onward distribution to individual stores. So for example, a company such as Choppies has 28 stores in Zimbabwe– 17 in Bulawayo, 2 in Gweru and 1 in Gwanda which are served through a distribution centre in Bulawayo and 6 in Harare, 1 in Bindura and 1 in Mutare which are served out of the distribution centre in Harare. Suppliers are expected to deliver directly to the two distribution centres.

The hospitality sector buys directly through packers such as National Foods and Blue Ribbon Foods. These companies generally buy in bulk. This is however reportedly not a very large market.


Figure 6: Diagram of Distribution Channels for Rice

Traders such as Ayan Trading, IETC, Bulk Commodities, Agricom

Packers such as Mega Market, Jaran Enterprises, Surface Wilmar, National Foods, FlikNik

IMPORTS

Informal Retail

Wholesalers such as JARAN Enterprises, Mohammed Mussa and Flik Nik

Formal Retail

Hospitality Sector




The predominant sources of supply into Zimbabwe are Thailand, Pakistan and India with supply from Dubai and Vietnam gaining in popularity. Rice imports from these countries are channelled through the Port of Beira and then trucked into Harare. The primary reason for imports from these sources is price. Other reasons given for importing from these countries were availability, consistency of supply and existing links and contacts in these countries.


Price is the decider in purchasing decisions around rice and Malawian exporters would need to be able to compete with existing suppliers on price. Currently traders and packers are purchasing rice at an average price of US$550 per tonne with a low of US$500 and a high of US$560. Malawian exporters would need to come close to US0.55 per kilogramme to compete in the Zimbabwean market.


In Zimbabwe, long-grain rice is preferred but there is no standard specification. There are various categories that are imported and these then impact directly on the price. Malawi could differentiate supply along these lines which are as follows:

0% broken which is a premium rice

5% broken - this is the most popular specification and this is the rice that is packaged

in Zimbabwe and found on supermarket shelves

10 to 15% broken – this is a cheaper rice and is generally sold in 50kg packs

25% broken – This is the cheapest rice and is generally sold in 50kg packs

Order sizes and frequency of orders differ from company to company with anything from 30 tonnes imported 3 times per year to 300 tonnes every 3 months to 150 tonnes twice per year.

There are distinct peaks in purchases during festive seasons such as Christmas and Easter and during school holidays when families are travelling to rural areas to visit family.

Packaging is important. If the product is imported in bulk, the packers, wholesalers and the informal sector prefer 50kg packs. Generally, the packs are woven polypropylene or thick plastic. For the retail sector, rice is packaged in 1kg, 2kg, 5kg and 10kg packs. The packs


need to be strong to minimise breakage. The most popular and fastest selling pack size is the 2kg pack. The 1kg pack is the slowest mover. The 2kg bags are packed in packs of 10 for delivery to the retail stores and distribution centres. The wholesalers sell these 10x2kg packs and 10x1kg packs.

2kg bags in packs of 10 for distribution 50kg bags waiting to be repacked

Payment terms are generally cash on delivery. Where a relationship exists between a supplier and the buyer, credit terms up to 21 days are generally negotiated.

Packers are involved in promotion of their brands both in-store and through billboards, TV and radio adverts. A rice such as Kilombero would need to be supported through promotional campaigns and the Zimbabwean partner would expect assistance in this regard.



Malawi rice is well known in Zimbabwe for its aroma and good taste. The general feedback is that companies would be interested in re-engaging with Malawian suppliers as consumers would definitely favour the product. Kilombero is the varietal that is always mentioned and there was no recollection of Faya rice except by a buyer who has been involved in the rice market for a number of years and who recalls an issue with the quality of Faya rice in that there was a high percentage of broken rice. Mount Malanje rice which is packed by Victoria Foods in Zimbabwe was also mentioned and it is thought to be of good quality and popular in Zimbabwe. Whilst the Mount Malanje brand may be popular, the local retailer Choppies reports that this is their slowest moving brand of rice due to the high price relative to other white rice.

There are however a few issues that would need to be addressed prior to any meaningful orders being placed for Malawi rice. A number of executives interviewed recall a problem with the consistency of supply from Malawi. Malawian suppliers need to ensure that rice is available in required volumes and that delivery will be timeous Closely linked to this is continuity in quality – the product delivered needs to be the same quality with each delivery. Once executive recalls specifically that there were issues with poor processing equipment and storage. Given that rice takes it aroma from its environment, poor storage of rice and contamination during storage impact directly on quality.

A further concern is that of sustainability. If a Zimbabwean company was going to invest in branding and distributing rice from Malawi, they would need assurances around guaranteed supply. There is a concern around whether smallholders are tied into rice contracts or whether they could simply decide to plant something else shorting the market.

The packaging of the Malawian rice at a retail level would need improvement. The current pack is not strong and the quality of the plastic needs to improve. The same would apply to bulk bags which need to be strong to minimise breakages.

There is a very strong perception that the price of the Malawi rice will make it uncompetitive in the Zimbabwean market. Given the economic climate in Zimbabwe and the competitive nature of the rice sector, prices have to be competitive. One buyer recalls that the company used to import Malawi rice but stopped because it was no longer moving in the market due to high prices.


The Agricultural Marketing Authority (AMA) is the regulatory authority for the agricultural sector in Zimbabwe. Regulation is primarily aimed at production but the AMA does require that any merchant wanting to trade in agricultural commodities has to register with the

“At a household level, people who have

travelled and who have tasted Kilombero

rice will always have a taste for it.”

Executive involved in the rice sector in

Zimbabwe


Authority once a year. This applies to all grain and oilseed merchants including rice merchants. Registration lasts 12 months and runs from 1 April through to 31 March the following year. To register as a merchant one has to be a tax registered company, have a tax clearance certificate and an office location.

Rice imports are controlled by phytosanitary and sanitary requirements. The phytosanitary certificate is issued by Plant Quarantine Services within the Ministry of Agriculture. An import permit from the Ministry of Agriculture is also required. Zimbabwe is a non-GMO country and does not allow the import of GMO products. A GMO-free certificate would be required.

The COMESA Simplified Trade Regime facilitates and formalises small-scale trade between Zimbabwe and Malawi and allows traders to bring in rice valued at US$ 1, 000 or below duty free and without a certificate of origin.

There are no specific standards for rice and the COMESA standards would suffice.

The import tariffs on rice are provided in Table 3. It is important to note that imports from

fellow COMESA members would be exempt from duty giving Malawi a clear preference over

rice from Asia and South Africa.

Table 10: Import Tariffs on Rice

HS code Description Tariff VAT

1006.10.10 Rice in bulk zero zero

1006.10.90 Rice in packs less than 25kg

15% zero

Source: Meeting at ZIMRA

Zimbabwe does have food labelling regulations and rice packaged for retail sale would need to adhere to these regulations.

As illustrated in the pack shot to the left, required information is as follows:

Contents

Nutritional information

Best before date

Weight

Country of Origin

Importer/packer in Zimbabwe

Most retail packs also include detailed cooking and serving instructions.



Rice from Malawi in general has a good reputation in Zimbabwe. The Kilombero rice is considered the premium product available from Malawi and the name is well recognised and its aromatic nature well-remembered. This already gives Malawian rice a competitive advantage and a positive linkage into the market. The Mount Mulanje rice is already available on retail shelves and the current packer in Zimbabwe would like to increase the range if the company was able to negotiate a direct line of supply with producers in Malawi. At present the supply is via traders which increases the cost of the product. The Faya rice is not well known and the perception is that the rice has a high percentage of broken which would make it unsuitable for mainstream retail. The Zimbabwean market is however segmented in terms of quality and 10 to 15% broken rice is imported at a lower price and sold in 50kg packs to wholesalers for the informal markets. This would be an opportunity for Faya rice.

The choice of distribution into Zimbabwe is important as illustrated by the success of Mariana rice. Aside from the fact that Mariana is a good quality product that is competitively priced, the distribution of the product is effective and as a result, the product is always available. The importer, Ayan Trading bring the product in directly and sell in bulk packs to the packers and in retail packs to the wholesalers and deliver directly to the retailers. As one retailer commented, they have mastered consistent supply.

Given that there is a glut of rice brands in the Zimbabwean market, it is not recommended that Malawian suppliers launch their own pre-packed brands into the market to compete with existing supply. Such a launch would require a great deal of effort to develop and maintain the market and the Malawian producer would need to offer strong merchandising, competitive pricing, high quality packaging and extensive promotion. Developing a premium brand would also be difficult. To pay a premium price, consumers would require a distinctive product of high quality in good packaging being sold in premium stores. Given the current economic climate in Zimbabwe, volumes of sales at this end of the market would be limited for the required effort. This is borne out by the fact that retailers report difficulty with premium brands such as Basmati. These brands are kept at minimal stocking levels and only allocated 10% of the shelf space dedicated to rice.

There appear to be three routes to market for Malawi rice. Firstly, as discussed above, given that the market is segmented on quality, a rice such as Faya with a higher percentage of broken rice could be packed in 50kg sacks and sold through the traders into the wholesale sector. This business would be based primarily on competitive pricing and ease of accessing product from a regional market. The traders would require some commitment around sustainability and consistent supply.

The second option is to enter into a relationship with a packer that is prepared to create a sub-brand for Kilombero under an existing brand. Mulanje rice is currently doing this with Victoria Foods although the relationship between the supplier and the packer is not direct. The company FlikNik has expressed an interest in this opportunity. This company are a wholesaler with their own rice brand, Yebo, which they pack at their own facilities in Harare. This is a new brand and the company are marketing it aggressively. They have appointed a brand ambassador who has her own TV Show and they are actively involved in promotions in stores and at events and fairs.


Yebo branded truck showing the brand Ambassador, Mai

Yebo have various sub brands – the blue pack is white rice, the red pack is parboiled and the yellow is “Mai’s best” (Mai is the brand ambassador). There is an opportunity to add a fourth colour pack to the brand known as Yebo Kilombero. The advantages of this approach are that the brand is already known in Zimbabwe and it has already been listed in numerous retail outlets. The marketing that would need to take place would therefore not be about the brand but about the uniqueness and aroma of Kilombero. The disadvantage is lack of control over a brand and the risk that the brand is not sustainable in the long-term.

The third option is to sell to packers doing house brands. There are numerous house brands in the market from the wholesalers such as Jaran (Aroma) and Mohammed Mussa (M&M) to Choppies, Spar (Savemor), OK Mart and Nyaningwe Supermarkets (Excite). All of these companies have indicated that if the price were right, they would look at doing Malawi rice as a house brand.

The market leaders in terms of rice brands are Mariana, the Thai rice from Ayan Trading and Ma-Hat-Ma, a Thai rice packed locally by National Foods. Both of these brands are good quality and the products are reasonably priced, although they are not the cheapest available. These are the products that Malawi rice would compete against as, other than the existing Mount Mulanje rice available in Zimbabwe, there is no African aromatic rice being marketed. Price is however the key issue and although consumers would be prepared to pay a small premium for Kilombero rice, the price would need to remain competitive. As shown in Table 2, a shopper at OK Mart in Harare would be faced with a range of brands and price levels when looking for a 2kg pack of white rice. The Mount Mulange rice would be the most expensive by some margin with the Mariana rice and the Ma-Hat-Ma retailing in the US$1.90 to US$2.25 price bracket. To be competitive, the Malawi rice would need to retail in this bracket or slightly higher.


Table 11: Pricing of 2kg White Rice at OK Mart, February 2016

Brand Packer Price (US$

Better Buy National Foods 1.45

Probrands Probrands 1.59

Silo Grain Marketing Board 1.65

Victoria Victoria Foods 1.69

Mariana Ayan Trading 1.90

Shopper’s Choice OK Mart House Brand 1.99

Ma-Hat-Ma National Foods 2.25

Mount Mulange Victoria Foods 3.13

The logistics and regulatory environment in Zimbabwe is relatively uncomplicated. Both Zimbabwe and Malawi are members of SADC and COMESA and therefore enjoy preferential market access. In addition Zimbabwe and Malawi have a bilateral trade agreement which was signed in 1995 and which provides duty free access for Malawian goods into Zimbabwe. Zimbabwe/Malawi Trade Agreement 1995The general customs tariff on packaged rice under 25kg is 15% and rice of Malawi origin would enter duty free. In addition, Malawian traders can make use of the COMESA Simplified Trade Regime designed to allow smaller traders to claim trade preferences. All rice imports require an import permit although this appears to be relatively easy to obtain. One regulatory issue to keep track of is a rumour that ZIMRA will be placing a 15% tariff on bulk rice imports. This has not been confirmed by ZIMRA but it is enough of a warning for one rice packer to cease all rice imports until clarification is obtained. Goods from Malawi entering Zimbabwe will be cleared at the Nyamapanda Border Post with Mozambique. The trip takes between 2 to 3 days on a good road.


7.0 Recommendations

Malawian rice is well known in Zimbabwe and the perceptions around the product are generally positive with the quality and the aromatic nature of the rice held in high regard by both consumers and buyers. Given that there are no other regional aromatic rice’s available in Zimbabwe, Malawi rice would be competing with the Asian rice’s being packaged and branded the country. The market for a premium stand-alone brand would be limited and difficult to develop as the retailers generally only want to deal with brands that are known and supported locally. Therefore, at a retail level, positioning Malawi rice within an existing brand would be beneficial. This would be either as a sub-brand of an existing brand or as a house brand varietal. With either route, the unique qualities of Kilombero coupled with its existing reputation would be the differentiator and the selling point.

It is however recommended that Malawian producers start approaching the down packer market directly. At present, the rice coming into Malawi for packaging is being imported by traders. This means that the packer does not have a direct relationship with the source making negotiations around volumes and price difficult and giving the Malawian producer no control over how the product is marketed and positioned in Zimbabwe. The packers would welcome a more direct approach as it would cut the cost of the rice and allow for greater brand development.

At a retail level, given that Kilombero has been absent from the market for more than six years, the product would need aggressive promotion. Whilst the packer and brand owner would take responsibility, there would be an expectation for assistance in marketing the “Kilombero” brand. This would likely be on a cost share basis. Promotions for rice focus on in-store promotions such as holiday specials, supermarket gondola ends (see photos below), competitions and general promotion through billboards and TV and radio adverts.

Gondola ends at various retail outlets in Harare, February 2016


Supplying to the wholesale sector or to packers in 50kg woven sacks would require little change to the existing packaging from Malawi. The only requirement would be to ensure that the packaging is strong and will withstand handling.

Generally, the perception of rice from Malawi is positive and the interest in exploring the opportunity is good. A few of the key players in the market are interested and open to an approach provided the price is competitive. Before approaching these companies, it is recommended that the Malawian suppliers have all the required information available such as price, specification, available volumes, packaging, transport options and delivery schedules. As indicated previously, a direct approach to packers is recommended and a trip to Harare to meet with potential customers to discuss the offering and deliver samples would be well received. The success of Malawian rice in the Zimbabwean market will however come down to whether or not Malawian suppliers are able to offer a competitive price.


South Africa



1.1 Imports

In 2015, South Africa’s total rice imports amounted to just over 1 million tonnes. Over the five year period 2011 through to 2015, rice imports have increased by 14% although this figure is perhaps misleading given the variable levels of imports and the fact that imports in 2015 were 20% less than imports in 2013. As illustrated in Figure 1, some 98% of imports in 2015 were of semi-milled or wholly-milled rice. Generally rice is imported in bulk and packaged at local facilities.

Table 12: South Africa’s Imports of rice, 2010 to 2015 (MT)

Year

HS Code

Total 100610 100620 100630 100640

Rice In The Husk (Paddy Or Rough)

Husked (Brown) Rice

Semi-Milled Or Wholly Milled Rice

Broken Rice

2010 982 272 769,641 11,190 782,085

2011 1,544 403 874,523 9,401 885,871

2012 6,946 326 1,212,682 8,893 1,228,847

2013 4,952 399 1,234,862 27,620 1,267,832

2014 4,225 944 885,692 19,562 910,424

2015 2,007 662 987,338 18,603 1,008,609 Source: South African Revenue Services


Figure 7: Composition of South Africa’s Rice Imports, 2015

Source: Based on data supplied by South African Revenue Services

An analysis of South Africa’s rice imports by month does not show any clear trend and imports appear to peak during different months over different years as illustrated by the chart below. There is however a definite peak towards the end of the year as importers gear up for the festive season and the annual December holidays.

Figure 8: South Africa’s Rice Imports by Month January 2010 to December 2015



Thailand and India are South Africa’s key suppliers of rice accounting for a massive 92% of the volume of rice imports in 2015. Vietnam, Pakistan, Brazil and the United Arab Emirates accounted for a further 7% of the volume of imports. Outside of these countries, small volumes are imported from a number of countries with very little consistency in this trade. Trade with Malawi is minimal with the only recorded trade being 26MT recorded in 2011.

Interestingly South Africa’s rice imports from Thailand have stagnated over the last five years with India taking an ever more important supply position. Thailand’s market share has shrunk from 71% to 62% while imports from India have increased by 150% and the countries market share has increased from 13% to 30%.

Table 13: Top Fifteen Sources of imports of Semi-Milled or Wholly Milled Rice (HS100630)

Rank Origin Import Volume (MT) Percentage


to 2015 2011 2015

1 Thailand 619,876 614,958 62% -1%

2 India 117,780 294,806 30% 150%

3 Viet Nam 8,949 43,127 4% 382%

4 Brazil 81,605 10,100 1% -88%

5 Pakistan 31,271 7,572 1% -76%

6 United Arab Emirates 2,387 6,388 1% 168%

7 Singapore 501 2,351 0% 369%

8 Australia 622 2,040 0% 228%

9 Namibia - 1,429 0% 10 China 2,742 1,042 0% -62%

11 Taiwan 432 855 0% 98%

12 Uruguay 2,719 826 0% -70%

13 Iran - 500 0% 14 United States 1,475 355 0% -76%

15 Hong Kong 151 288 0% 91%

Grand Total 874,523 987,338 100% 13%


1.2 Exports

South Africa exports small volumes of rice predominantly through South Africa’s retail footprint in the southern African region. Broken rice is also exported as a by-product of the local rice packing market. In 2015, exports amounted to 132,588 tonnes of which 48% was semi-milled or wholly-milled rice and 38% was broken rice.


Table 14: South Africa’s Exports of rice, 2010 to 2015 (MT)

Year

HS Code

Total 100610 100620 100630 100640

Rice In The Husk (Paddy Or Rough)

Husked (Brown) Rice

Semi-Milled Or Wholly Milled Rice

Broken Rice

2010 156,114 496 53,291 25,353 235,254

2011 2,116,916 1,397 74,313 25,979 2,218,605

2012 627,116 4,576 83,277 34,341 749,311

2013 20,364 2,548 64,667 34,757 122,336

2014 10,095 9,740 57,172 40,973 117,980

2015 16,900 1,752 64,204 49,732 132,588

Source: South African Revenue Services

Zimbabwe is the primary destination for South African rice. Some of this is rice packed ready for retail sale and some is bulk exports with a company such as Cape Town based Capital EeziFoods exporting rice in bulk to their Zimbabwean facility in the EPZ at Beit Bridge where they pack their CAPRI Rice Brand. This allows the company to avoid the 15% tariff on packaged rice entering Zimbabwe. Zimbabwe also takes a high percentage of South Africa’s broken rice and in 2015, some 52% of the export volume to Zimbabwe was broken rice (HS100640).

Swaziland, Botswana, Lesotho and Namibia are in positions two through to five. Given that these four countries are members of the Southern Africa Customs Union (SACU) and that the South African retailers have a very strong footprint in these countries, this is likely to be stocks for South African retail outlets.

Table 15: Top Fifteen Export Destinations for Rice (HS1006)

Rank Destination Export Value MT Percentage


to 2015 2011 2015

1 Zimbabwe 20,470 43,628 33% 113%

2 Swaziland 24,917 33,508 25% 34%

3 Botswana 2,145,374 32,245 24% -98%

4 Lesotho 5,934 9,860 7% 66%

5 Namibia 11,005 5,974 5% -46%

6 Zambia 806 3,093 2% 284%

7 DR Congo 8,821 2,206 2% -75%

8 Mozambique 719 521 0% -28%

9 Malawi 58 354 0% 510%

10 Angola 317 334 0% 5%


Rank Destination Export Value MT Percentage


to 2015 2011 2015

11 Yemen - 231 0% 12 United States 13 122 0% 819%

13 India 0 101 0% 3300586%

14 Somalia - 99 0% 15 Saint Helena 67 80 0% Source: Based on data supplied by South African Revenue Services


South Africa relies entirely on imports to meet demand for rice as there is no local production of the crop.

1.4 Consumption

Given that South Africa produces no rice locally, import volumes less the small quantities exported, reflect consumption. In 2015, apparent consumption of rice was 923,133 tonnes or 16.8kg per capita.

Consumption has grown steadily at 13% across the five year period 2011 through to 2015. The population of South Africa has grown by 7% over the five year period and this would account for some of the increase in consumption however, more importantly, the middle class with access to greater disposable income has shown extremely strong growth. According to research conducted by the UCT Unilever Institute of Strategic Marketing, South Africa’s black middle class has more than doubled, from 1.7-million in 2004, to an estimated 4.2-million in 2012. A report from the South African Institute of Race Relations (IRR) published in August 2015 stated that at most two in 10 South Africans could lay claim to a middle class standard of living, although one in 10 was probably a more comfortable figure. This would put South Africa’s middle class at somewhere between 5.5 and 11 million people.

Table 16: Apparent Consumption of Semi-Milled or Wholly Milled Rice (HS100630)

2011 2015 Change 2011 to 2015

Local Production (MT) - - Imports (MT) 874,523 987,338 13%

Exports (MT) 74,313 64,204 -14%

Apparent Consumption (MT) 800,210 923,133 15%

Consumption per capita (kg) 15.46 16.80 9%

Source: Calculations based on trade data supplied by South African Revenue Services and population data

supplied by StatsSa


Insight Survey compiles an annual Carbohydrate Landscape Report. In the latest version it is stated that in the 2015/16 marketing year, rice consumption will increase by 10% driven by the increasing maize price as a result of the drought in southern Africa which will make rice a cheaper alternative to maize.

1.5 Informal Trade

There is very little informal trade in rice in South Africa.



The formal rice market in South Africa is dominated by a handful of brands. These are all well-established household names such as Tastic and Spekko. Each of the large retail chains has a rice house-brand that competes directly with branded product. These sometimes come in a number of varietals such as the Pick ‘n Pay house brand or as a single varietal such as First Value from Massmart.

Although all rice requirements are imported, the standard parboiled rice tends to be imported in bulk and packed in South Africa at local facilities. The imported brands available on retail shelves tend to be premium rice varietals such as basmati where the local market is limited and it would not be cost-effective to package locally.

The key packers in the market are as follows:

Tiger Brands: Tiger Brands cleans and packs Tastic rice. Tastic is the clear market leader in South Africa having been a household name since 1961. The brand has a strong and well-recognised by-line: “Cooks perfectly every time”. The anchor product in the range is parboiled Thai rice. Other varietals are Bonnet rice (a white rice from the Southern states of America), Basmati, Jasmine, brown rice, wild rice, risotto and sushi.

Pioneer Foods: Pioneers Foods are a large player in the South African food processing industry. The clean and pack rice under the Spekko and Select Rice brands. Select Rice is a good quality long grain par-boiled rice imported from India, Vietnam, Thailand and Brazil. Spekko Rice markets 5 rice variants: Long Grain Parboiled Rice, India Gate Basmati Rice, Saman Brown Rice, Royal Umbrella Jasmine Rice and Saman White Rice.

Willowton Group: This is the newest entrant to the South African rice market. Willowton is an established food processing company based in KwaZulu Natal. In 2013, the company formed a joint venture with a commodity trader, Louis Dreyfus to pack rice under the D’Lite and Allsome brands The JVs new rice cleaning and packing facility is located in Pietermaritzburg as has the capacity to produce 10 000 tons of rice a month on a five day work week. Both brands are 100% Thai, long grain, parboiled rice.

In addition to these large players, there are numerous regional packers such as Jumbo Prepacks, Magic Rice, Sunnyfield Packaging, PB Packaging, Solpak and Goldkeys International. These packers generally have their own house brand and also pack house brands for the larger retail and wholesale sectors. The brands packed by these companies tend to be regional so for example, the Golden Penny rice packed by Jumbo Prepackers is found in retail and wholesale outlets in KwaZulu Natal Province.


Table 17: Pricing of Rice in Formal Retail Outlets in South Africa

Brand Name Type of

rice

Country of

Origin

Manufacturer/

packer Pack Size

Nature of

pack

Retail

price

(ZAR)

Retail

price

(US$))

Allsome

Parboiled Thailand

Willowton

Group

1 Kg Plastic Bag 18.5 1.23

Parboiled Thailand 2 Kg Plastic Bag 21.99 1.47

Parboiled Thailand 5 Kg Plastic Bag

49.99 to

52.99

3.33 to

3.53

Parboiled Thailand 10 Kg Plastic

82.90 to

89.95

5.53 to

6.00

Amber Paily Basmati India 5 Kg Plastic Bag 159 10.60

Checkers Parboiled Thailand

Checker 2 Kg Plastic Bag 21.99 1.47


First Value

Parboiled Pakistan Massmart

Holdings


Parboiled Pakistan 5 Kg Plastic Bag 38.5 2.57

Parboiled Pakistan 10 Kg Plastic Bag 76.5 5.10

Food Lovers Parboiled

Thailand/

India Food Lovers


Parboiled

Thailand/

India 2 Kg Plastic Bag 19.99 1.33

Golden Pride

Long Grain

Parboiled India Golden Keys

International


Long Grain

Parboiled India 5 Kg Plastic Bag 38.99 2.60

Jugnu

Yarona Long Grain Pakistan

Hundal Rice

Mills, Pakistan 5 Kg Plastic Bag 72.99 4.87

Light and

Right

Long Grain

Parboiled India Goldkeys

International


Long Grain

Parboiled India 5 Kg Plastic Bag 39.95 2.66

Nur Jahan Basmati India

KBBL Limited 1 Kg Plastic Bag

35.99 to

41.99

2.40 to

2.80

Pick 'n' Pay

Brown Rice Thailand

P 'n' P

1 Kg Plastic 21.99 1.47

Brown Rice Thailand 2 Kg Plastic 32.99 2.20

Jasmine Thailand 1 Kg Plastic 23.99 1.60

Long Grain

Parboiled Thailand 1 Kg Plastic 10.59 0.71

Long Grain

Basmati India 2 Kg Plastic 64.99 4.33

Long Grain

Parboiled Thailand 5 Kg Plastic 59.99 4.00

No Name

Parboiled India 1 Kg Plastic 9.49 0.63

White Rice Thailand 1 Kg Plastic 21.99 1.47

White Rice Thailand 2 Kg Plastic 34.99 2.33

Princess Long Grain

Parboiled India

Royal Rice

Co. (Pty) Ltd 10 Kg Plastic Bag 75.95 5.06


Brand Name Type of

rice

Country of

Origin

Manufacturer/

packer Pack Size

Nature of

pack

Retail

price

(ZAR)

Retail

price

(US$))

Sana

Premium Basmati Pakistan

Hundal Rice

Mills 5 Kg Plastic Bag 84.99 5.67

Sasko Select Parboiled

Thailand,

Vietnam,

India or

Brazil

Sasko/Pioneer

5 Kg

Plastic Bag 43.5 2.90

Shakti Bhog

Gold Basmati India

Shakti Bhog

Foods India 5 Kg Plastic Bag 125 8.33

Sadiya Basmati India Sadiya 5kg Woven bag 129.99 8.67

Spar Brand Parboiled

rice

Thailand,

India,

Brazil,

Pakistan,

Uruguay.

2 KG

Plastic Bag 18.99 1.27

Spekko

Jasmine Thailand

Pioneer Foods

1 KG Plastic Bag 23.99 1.60

Basmati India 1 KG Plastic Bag 36.99 2.47

Brown Uruguay 1 KG Plastic Bag 19.49 1.30

White Long Uruguay 1 KG Plastic Bag

18.49 to

19.99

1.23 to

1.33

Parboiled Thailand 500g Plastic 7.49 0.50

Parboiled Thailand 1 KG Plastic Bag

10.90 to

12.99

0.73 to

0.87


21.95 to

25.99

1.46 to

1.73


54.95 to

63.99

3.66 to

4.27

Parboiled Thailand 10 Kg Plastic Bag 109 7.27

Long Grain


Long Grain

Parboiled Thailand 10 Kg Plastic Bag 90 6.00

Splendid Long Grain

Parboiled

South

Africa Citron Trading


Tastic

Basmati India

Tiger Brands

1 Kg Plastic Bag

36.99 to

44.99

2.47 to

3.00

Basmati India 2 Kg Plastic Bag 87.99 5.87

Bonnet Thailand 1 Kg Plastic Bag

20.99 to

21.99

1.40 to

1.47

Bonnet Thailand 2 Kg Plastic Bag

33.95 to

41.99

2.26 to

2.80

Brown

Basmati India 1 KG Plastic Bag 31.99 2.13

Brown Rice Canada 1 Kg Plastic Bag 29.99 2.00

Brown Wild 1 KG Plastic Bag 31.99 2.13

Jasmine Argentina 1 KG Plastic Bag 25.99 1.73

Jasmine Thailand 2 Kg Plastic Bag 49.99 3.33


Brand Name Type of

rice

Country of

Origin

Manufacturer/

packer Pack Size

Nature of

pack

Retail

price

(ZAR)

Retail

price

(US$))

Long Grain


Natures

Brown Canada 1 Kg Plastic Bag

29.99 to

34.95

2.00 to

2.33

Parboiled Thailand 500g Plastic Bag 7.99 0.53


12,50 to

14.99

0,83 to

1.00


25.99 to

26.99

1.73 to

1.80


54.99 to

69.99

3.67 to

4.67


Risotto Italy I Kg Plastic Bag 49.99 3.33

Sushi Thailand 1 Kg Plastic Bag

49.99 to

52.99

3.33 to

3.53

Woolworths

Jasmine Thailand

Packaged in

USA


Brown Argentina 500g Plastic Bag 45.95 3.06

White Argentina 500g Plastic Bag 32.95 2.20

Basmati India 500g Plastic Bag 45.95 3.06

Source: Visits to 8 retail outlets in Johannesburg



Stakeholders estimate that 99% of all rice sold in South Africa is sold through formal channels. The only rice that is sold loose is from a few Chinese supermarkets, shops selling Indian cuisine and a few local markets that cater for the African diaspora. This is primarily basmati rice.



Distribution channels for rice in South Africa are relatively direct. The large rice packers generally prefer to import their requirements directly as this cuts out the middle man and gives them more control over their supply chain. With the packers that belong to one of the large groups such as Tastic which is part of the Tigerbrands Group, procurement is done through a centralized procurement division responsible for procurement of inputs for all divisions within the group. Willowton/Allsome have gone one step further and the packing venture is a joint venture with the commodity trader Louis Dreyfus who sources rice for the packaging facility. The smaller regional packers also prefer to import directly but do utilise the services of traders as required. The commodity traders do not only purchase for the South African market but purchase rice for sale into southern Africa.

Figure 9: Diagram of Distribution Channels for Rice

Rice Packers

Tastic

Pioneer Foods

Willowton/Allsome

Goldkeys

Magic Rice

Etc

Commodity Traders

Louis Dreyfus

Industrial Commodities

ETG

IMPORTS

Retail

Large such as Shoprite, Pick n Pay

Small mini-markets

Spaza shops

Wholesale / Cash n Carry

Africa Cash n Carry

Makro

Food service industry suppliers

Bidvest Food Services

DCL Foods

Restaurants, caterers, hotels

Speciality rice importers e.g.: Rieses who import branded Arborio rice from Italy


The majority of rice sales volumes are channelled through the retail (45%) and wholesale (45%) sectors. The remaining 10% is made up by the hospitality and food services sector. The four major food retailers, namely Pick n Pay, Shoprite, Spar and Woolworths dominate the food retail landscape. Given their size and control in the market, they are all able to dictate their buying terms to suppliers who are expected to deliver products to central distribution centres from where the products are then distributed to stores. The supermarkets further dictate terms to suppliers in stores in terms of merchandising, shelf space and position.

A number of the large South African food manufacturers utilise the services of third party distribution companies. These companies have strong and established relationships with the major retailers and wholesalers and will take care of distribution for a company for a percentage of sales. The added benefit of dealing through agents and distributors is that they would also be supplying into a wider trade network, including wholesalers (which in turn supply the informal / street vendor market). Most often goods represented by agents have brand value either internationally or at least in the country of origin and it will be difficult to find an agent willing to take on a relatively unknown brand from Malawi.

Pick ‘n Pay has buying teams which are divided according to 4 regions (Inland, Eastern Cape, KwaZulu-Natal, Western Cape) and who are then responsible for purchases for that particular region. Typically, the supplier would approach the Pick ‘n Pay buyer directly to negotiate a listing, based on price and volumes. Once this has been granted, the foreign suppliers are encouraged to work through agents. From time to time, there would be some cost sharing of advertising and marketing which will be negotiated directly with the agent at the time of listing the product.

Spar purchases food products on a decentralised basis, and foreign suppliers would be required to get listed as a supplier at each of the Distribution Centres for the different areas. The only buying decision which is made centrally is for the Spar Branded products, which is an increasing portion of the products that they offer. For the different geographic divisions, each individual buyer makes the decision on which companies they list as suppliers, through negotiating directly with the suppliers, or their local agents. Although Spar does not seem to have a preference for working through agents, the company believes that it is easier for them to deal with the local agent of a foreign supplier rather than directly as this way they can ensure consistency of supply.

Woolworths work through a combination of agents and direct contact with suppliers. Each of the buying divisions of Woolworths make their own decision on their list of suppliers and often relationships that have been built between agents and the buyer can be very beneficial to getting the product into the store.

Shoprite on the other hand prefer dealing directly with the foreign supplier as this helps to keep the cost of the product down. This does not negate the use of agents and certain foreign suppliers with strong agents in the market will access the group through the agent. However, generally Shoprite is trying to limit use of agents. Shoprite will meet foreign suppliers directly and if the product is of interest, they will negotiate price. This product will then be listed on their systems, and they will contact the suppliers to source the required volumes of products that they require. Shoprite has a centralized warehousing system with warehouses in Cape Town, Durban and Johannesburg. These warehouses supply the whole country.


In addition to the major chains, there are a large number of “independent” retailers which cater to niche or local segments of the market. These range from fairly large outlets to very small stores and include cafés, superettes, spaza shops, kiosks and delicatessens. Currently there are approximately 30,000 of these smaller retail outlets operating in South Africa. These retailers will most often buy from the large wholesalers such as Metro, Trade Centre or Makro.

The hospitality and food services sector is important in South Africa. There are a number of specialist distributors that have setup to service this sector with their food and beverage requirements. These distributors generally obtain their stocks directly from local manufacturers or specialist agents and distributors. There are one or two of these distributors that deal in rice but this is speciality rice’s such as Arborio rice.




As shown by the import statistics, Thailand and India dominate the supply of rice into South Africa. The reason for this reliance on Thailand and India is a combination of competitive pricing, a product that matches the South African taste profile and the fact that these two countries are the global leaders in the supply of rice which makes it easy to establish contact and which provides confidence in terms of consistent delivery of a high quality product.

The link with Thailand and India will be very difficult to break as these countries are serving the South African market well giving little incentive for packers to change their source of supply. A concern voiced by rice buyers is that the characteristics of a rice make it extremely difficult to change source and supplier. It is unlikely that a rice from Malawi would therefore replace a current source but would rather need to be viewed as a new varietal within an existing brand range.


Price is extremely important and will ultimately be the deciding factor. Indications received from buyers on current prices are as follows:

Thai Rice R8.10 (US$0.54) per kg landed cost cif Durban (US$540 per tonne)

Normal White Rice US$350 per tonne cif Durban

Fragrant White Rice US$1000 per tonne cif Durban


The specification for rice is from 100% unbroken to 4% to 5% broken up to 10% broken with a moisture content not exceeding 14%. The percentage of broken would depend on the end-market. The rice has to be fully sortexed (free from black grains) and the consistency of colour is very important. The requirement is for a long grain rice which is defined as rice with 70 % or more of whole milled rice grains having a kernel length of 6.6 mm or more. Before placing an order or entering into a negotiation, the South African buyer will need a sample accompanied by a specification sheet which will be analyses for compliance with specification.

Rice packers require rice to be delivered in 50kg bags which are then broken and repackaged. Traders import 25kg bags which are popular with the wholesale sector and the small retailers. The10kg and 5kg bags are also popular with this segment of the population. Within the retail sector, the 1kg and 2kg packs are the most popular. A 500g pack is


generally available within a range as is a 5kg pack. There is growing use of BOPP / LLDPE block bottom bags to pack rice for the retail sector as these bags are more durable. The packers deliver in the following configurations of packs through to retailers and wholesalers:

10 x 500g

10 x 1kg

10 x 2kg

4 x 5kg

10kg Pouch

Packaging and labelling needs to comply with the Regulation 866 of the Agricultural Product Standards Act (119/1990): Regulations relating to the grading, packing and marking of rice intended for sale in the Republic of South Africa (see section 5.5 and Annexure 2). In terms of labelling, the regulation specifies2:

Each container in which rice is packed shall be marked in clearly legible letters with-

(a) The name of the product.

(b) The class of rice.

(c) Degree of milling (optional).

(d) The expression “Product of” followed by the name of the country of origin

(e) Registered Trade Mark where applicable/ Product Brand of the Product.

Each container in which rice in retail quantities are sold, shall, either on the main panel or in another conspicuous place thereon, be marked with-

(a) The name and address of the packer of the rice; and

(b) The net weight as required in terms the Trade Metrology Act, 1973

The particulars shall be indicated in detached letters and figures-

(a) That are in each separate case of the same colour, type and size;

(b) That appear on a uniform and contrasting background;

(c) That are clearly legible; and

(d) Of which the vertical height is at least 5,0mm: Provided that the indication of the name and address of the packer may be of a vertical height of at least 2mm.

2 Regulations Relating To The Grading, Packing And Marking Of Rice Intended For Sale In The Republic Of South Africa, Part II


Each container containing Rice in bulk, shall be marked clearly and legibly with block letters on the container itself, or on a label affixed to the container, with the following particulars:

(a) The name of the product shown at least as Rice;

(b) The class of the Rice: Provided that the class may be omitted if the Rice have not been classified yet, or in the case of imported Rice destined for a purpose other than sale;

(c) A lot identification;

(d) The country of origin; and

(e) The name and address of the packer of the Rice

The country of origin may in the case of Rice destined for further processing or packing be omitted, if the country of origin is indicated on the accompanying sales documents.

Depending on the final market for the rice, arsenic content is a concern and companies involved in further processing of rice (for example for rice flour) for companies such as Nestle require a low arsenic content in the rice.

The large corporates in South Africa maintain strict supplier codes of conduct and a company such as Pioneer Foods require all their suppliers to agree to and sign a code of conduct covering a range of issues from labour, health and safety and occupational health and safety.


There is very little knowledge of Malawian rice in South Africa. Most of the companies and individuals interviewed did not even know that Malawi grew rice. Those individuals who are aware of the product comment that southern African rice’s are tasty and of a good quality. The concern is that the market for rice in South Africa is predominantly for parboiled rice so the rice from Malawi would need to compete at the small premium end of the market.

The perception of Malawian rice amongst those that are unaware of the product ranges from a suspicion that it would be an inferior product to the Thai product to concern that it would only service the very top-end of the market with a premium product. This disparity in perception highlights the need for some level of education in South Africa to show buyers the unique qualities and quality of Malawian rice.


South Africa has a specific regulation relating to the import and sale of rice in South Africa. Regulation 866 of the Agricultural Product Standards Act (119/1990): Regulations relating to the grading, packing and marking of rice intended for sale in the Republic of South Africa


details three classes of rice namely Long grain; Medium grain; or Short grain and specifies the standards applicable to each class. The Regulation details the packaging and labelling regulations for both rice packed for retail sale and rice in bulk intended for repackaging in South Africa. In both cases the name of the product, the class of the rice, the country of origin, the volumes and the name of the packer are required. On import, a sample of the product is removed for testing to ensure compliance with the regulation. A full copy of the regulation is provided in Annexure 2.

Given that South Africa produces no rice, the import tariff on all rice from all sources in zero. Rice is considered a basic foodstuffs and is therefore also exempt from VAT. Malawi therefore enjoys no tariff preference vis-á-vis competitors from Asia.



The primary market for rice in South Africa is for parboiled rice and this is where the bulk of demand lies. At a retail level white rice is sold at up to a 70% premium over parboiled rice meaning that white rice is targeted at the upper end of the market where consumers are less price sensitive. The major brands such as Tastic and Spekko have white rice varietals within their range. Spekko has Saman White Rice which is sourced in Uruguay which the pack claims is snow white in colour and has a soft, sticky texture when cooked, and Tastic has the Bonnet white rice within the Rice’s of the World range. The market for white rice as a percentage of the total rice market at around 1 million tonnes is small and if one looks at the level of rice imports from Uruguay which one can assume is white rice for the Spekko product, a total of 826 tonnes was imported in 2015. From a Malawian perspective given the relatively small volumes of Malawi rice available for export, the small size of the market should not be a concern.

Examples of white rice available in South African supermarkets

The South African rice market is dominated by a few big brands which makes it difficult for new entrants. This is compounded by the fact that the big brands tend to cover all varietals from parboiled to white to basmati to Arborio leaving little room for individual products. For this reason it is not recommended that Malawian suppliers launch their own pre-packed brands into the market to compete with existing supply. Such a launch would require a great deal of effort to develop and maintain the market and the Malawian producer would need to offer strong merchandising, competitive pricing, high quality packaging and extensive promotion.


The recommended route to market is to enter into a relationship with a packer that is prepared to offer a Malawian varietal such as Kilombero or Faya or Mount Mulanje within an existing brand. One of the big players has expressed an interest along with some of the smaller regional packers. There is however a concern that has been expressed by the latter around whether the price of the Malawian white rice would be competitive as these packers generally focus on the lower end of the market packaging a parboiled rice for this market segment.

Feedback from the packers is that the Malawian product would need to play on its “Africanness” as this would differentiate the product from everything else currently available on South African shelves. If a South African packer was to commit to creating a space for a Malawian varietal within their existing brand, they would need assurances around the sustainability of supply and consistency of quality. The South African company would need to spend a great deal on marketing and positioning the product and there is a concern around the commitment of small-holders in Malawi to growing rice.

The opportunity to present the South African market with an African rice extend to the retailers’ house brands. All the major retailers have their own rice house brands and there is an opportunity to add a Malawian varietal to their existing range. It is however recommended that the focus is placed on the retailers targeting the high-end of the market who have existing premium ranges. This would be Woolworths, Food Lovers Market and Pick ‘n Pay. Interested producers would need to enter into a direct discussion with these retailers around expanding and developing their brand.

Having indicated that it would be difficult to launch a Malawian brand in mainstream retail, there is an exception. An interesting opportunity is the supply of branded Malawian rice through the numerous “African” food shops in South Africa that service the African diaspora living in South Africa. A trading company such as Akila Group supply directly into this market. Akila would not require changes to the product and would import as is for sale into this channel. Demand by these shops is for 25kg bags. Currently Akila is supplying basmati to these stores as they do not have an African rice available.

Price is a key element of the Malawian offer to South Africa. Table 7 provides detail of the range of prices of white rice available on supermarket shelves. The Malawi rice would need to retail in this bracket to be competitive. Given a landed price of around US$540 per tonne for Thai rice, the mark-up through to final retail is a little over 100%.

Table 18: Pricing of 1kg White Rice at various retail outlets in Johannesburg, February 2016

Brand Rand Price US$ Price

Pick 'n Pay White rice 18.99 1.27

Bonnet White rice 18.29 1.22

Saman White rice 23.99 1.60

Woolworths (500g) 32.95 2.20


The logistics and regulatory environment in South Africa are relatively simple. The general customs tariff on rice is zero from all sources so Malawi does not enjoy any margin of preference by way of the SADC Free Trade Agreement. The South African Department of Agriculture maintains a specific regulation on rice which details specifications, packaging and labelling requirements. Rice imports will be sampled on entry into South Africa to ensure compliance with this regulation. Goods from Malawi will enter South Africa by road Zimbabwe entering through Beit Bridge border post. There are number of trucking companies operating on this route and they would welcome the opportunity to transport a return load from Malawi.


7.0 Recommendations

The South African rice market is dominated by the supply of parboiled rice from Thailand and India. Very little is known about the rice available from Malawi and buyers would need to be educated about the varietals available and the unique characteristics before any decision to purchase could be made. The rice being imported from Thailand and India is well regarded and competitively priced and given the level of satisfaction with existing supply channels, there is little incentive for buyers to want to change source or supplier. Rice from Malawi would need to be positioned as a premium product that offers something completely new and unique to the South African market. Using the fact that it is an African rice would be a good selling point and would differentiate the product from anything else currently on the market. The Saman White rice being packaged by Spekko is perhaps the most exotic white rice available in main stream retail. The aromatic nature of the Malawian rice is also a selling point given the popularity of jasmine and basmati rice in South Africa.

Given the dominance of big brands in the rice market, it is recommended that the Malawian producers enter the South African market through a relationship with a packer and/or a house brand for a retailer through the South African packer. The benefits of this approach include not having to be concerned about redesign of packs to suit the market and not having to take full responsibility for launching a new brand of rice in a competitive market. The partner in South Africa may request assistance with marketing by way of a cost share. Promotion of a new rice product through TV advertising, advertising in magazine and newspapers and in promotional catalogues from various retailers along with in-store promotions would be required. The extent to which this is required would depend entirely on the partner.

A number of buyers have been genuinely curious about the rice available from Malawi and have indicated a willingness to engage with producers to bring the product into South Africa provided a sustainable source of supply can be guaranteed, that the product is of a good quality that consistently meets specification and that the price is competitive. Whilst buyers would pay a slight premium for a quality product with unique characteristics, the rice from Malawi would need to be competitive against the white rice currently being imported from Uruguay, Argentina and Thailand.

The South African FMCG market is competitive and unforgiving. It is suggested that Malawian producers develop a strategy for market and ensure that all information is available before an approach to buyers is made. As a first step the buyers will want a sample of the product together with a full specification sheet and detailed pricing. The specification sheet needs to be in line with the South African regulations. If these are found to be competitive and in-line with requirements, a visit to South Africa will be required to conclude a deal.

Given the almost complete lack of knowledge about the rice available from Malawi, it may be worth considering an industry promotion in South Africa. This could take the form of a series of targeted events in various centres (Durban, Cape Town and Johannesburg) at which the Malawian industry can be introduced along with the different varieties. This would give buyers, brand owners, retailers and packers the opportunity to taste the product and understand the offering.


Overall Recommendations for Malawian Exporters

There is a clear market for rice from Malawi in Zambia and Zimbabwe and a potential market in South Africa should Malawian exporters approach the market in a considered and strategic manner. The rice from Malawi is highly sought after in both Zambia and Zimbabwe and the aromatic qualities of the rice dovetail with regional consumer preferences. The South African market preferences parboiled rice although the unique and aromatic characteristics of the Malawi rice could be leveraged as a differentiator in a highly competitive market.

Experience of other rice brands in the market such as the Mariana rice being packaged in Mozambique, is that success is determined to a large extend by understanding and working within the correct distribution channels. In all three markets, the formal retail market for rice is extremely competitive and it is not recommended that Malawian rice exporters approach the market with their own packed brand of rice. Developing market share for branded rice would take a great deal of time, money and effort. It is recommended that Malawian exporters approach the formal market via local packers who would import in 50kg sacks for repackaging at their own facilities or through an agreement to package a house brand. With the former option, it is further recommended that the Malawian exporter look at approaching a packer with the option to pack a Malawian rice varietal such as Kilombero as a sub-brand within an existing brand. So for example Brand xyz would package a sub-brand known as XYZ Kilombero rice. This would allow the exporter to maintain some control over the brand and would differentiate the rice from other white rice available on retail shelves allowing for some margin on price as Kilombero is generally perceived as a premium rice. With regard to packaging house brands, it would be important for Malawian exporters to dedicate some resources to improving the current packaging on Malawian rice as the existing packaging does not meet market requirements. The current packs are reportedly insufficiently strong, the quality of the printing is poor and the pack designs are unexciting. If a Malawian exporter wants to explore the opportunity of packaging house brands in Malawi, these short comings would need to be addressed.

The informal markets in Zambia and Zimbabwe are extremely buoyant and rice is sold loose in various measures to lower income consumers. At this level of trade, rice from Malawi is well recognised and the perceptions are positive. The route to market for this informal sector would be through bulk sales (50kg sacks) to one of the many wholesalers servicing this sector.

Ultimately success for Malawian rice exporters is going to come down to price and the ability to deliver a consistently high quality product on an on-going basis. There is a concern in all three markets that given the fact that the Malawian rice sector is dominated by small-holder farmers that it will be difficult for an exporter to guarantee quality and volumes on an on-going basis. If a packer or wholesaler is going to make an investment in developing a brand from Malawi, there needs to be some guarantee around consistent volumes and quality so that the product can be sold with confidence. Price is important and there is a perception that the rice from Malawi is simply too expensive when compared to the rice available from Asia. Whilst consumers and buyers will concede that the Malawian aromatic rice’s are a premium product, they would be prepared to pay slightly more for the product but the price does need to be in the ball-park with other competing products.


Annexure 1: COMESA Standard for Rice


ANNEXURE 2: Regulations Relating to the Grading, Packing and Marking of Rice Intended for Sale in the Republic of South Africa The Minister of Agriculture, Forestry and Fisheries, acting under section 15 of the Agricultural Product Standards Act, 1990 (Act No. 119 of 1990), (a) made the regulations set out in the Schedule; and

(b) determined that the said regulations shall come into operation on the date of publication.

SCHEDULE

Definitions 1. In these regulations any word or expression to which a meaning has been assigned in the Act shall have that meaning and, unless the context otherwise indicates -- “address” means a physical address in the Republic of South Africa and includes the street

or road number or name, and the name of the town, village or suburb and, in the case of a farm, the name or number of the farm and of the magisterial district in which it is situated;

"container'' means a bag or a bulk container or other suitable packing unit or container; ''consignment'' means a quantity of rice product of the same kind or class which is

delivered at any one time under cover of the same consignment note, delivery note or receipt note, or delivered by the same vehicle or bulk container, or which is loaded from a bin of a grain elevator from a ships hold or railway truck, or if such a quantity is subdivided into different classes, each quantity of each of different classes;

''defective kernels" are the heat damaged kernels, the damaged kernels, the immature

kernels, the chalky kernels, the red kernels, the red-streaked kernels, and pecks as defined in column 1 of table 2;

“foreign matter” in relation to rice, means all matter other than rice grains such as dust,

stones insects, other crop seeds etc; “germ” means the small white portion which lies on the ventral side of the rice grain from

where the seed germinates; “glutinous rice” means kernels of special varieties of rice (Oryza Sativa L. ghutinosa)

which have a white and opaque appearance. The starch of glutinous rice consists almost entirely of amylopectin. It has a tendency to stick together after cooking;

“hull” means the outermost cover of the rice kernel, also known as “husk”; “husked rice” means paddy rice [“brown rice” is sometimes used as a synonym] from which

the husk only has been removed;


"insect" means an insect of a kind that is detrimental to rice, irrespective of the stage of development thereof and whether it is alive or dead;

"main panel" means that part of the label or container bearing the trade mark, trade name or

brand name in greatest prominence and any other part of the label or container

bearing the trade mark, trade name or brand name in equal prominence;

"micrometer" or other measuring device not deforming the kernels, capable of being read

to the nearest 0.01mm “milled rice” means husked rice from which all or part of the bran and germ have been

removed by milling [''white rice'' is used as a synonym]; “milling degree” means the extent of which the bran layers and the germ have been removed; "poisonous seeds " means the seeds or bits of seeds of plant species that may present a

hazard to human or animal health when consumed, including seeds of Argemone mexicana L., Convolvulus spp., Crotalaria spp., Canavalia ensiformus, Datura spp., Ipomoea purpurea, Lolium temulentum, Ricinus communis or Xanthium spp.;

"packer" means a person or company packing rice for sale, a person/company on whose

behalf rice are packed for sale and a person/company importing rice for sale; “paddy rice” means rice which has retained its husk after threshing; “parboiled rice” means husked or milled rice processed from paddy or husked rice that has

been soaked in water and subjected to a heat treatment so that the starch is fully gelatinized, followed by a drying process;

"retail quantity" means a quantity of 10 kg or less of rice, irrespective whether sold in

containers or in loose quantities; “rice” means whole or broken kernels obtained from the species Oryza sativa L.; and "the Act" means the Agricultural Product Standards Act, 1990 (Act No. 119 of 1990). Restriction on the sale of rice 2. (1) No person shall sell a consignment of rice in the Republic of South Africa --

(a) unless the rice concerned is sold according to the classes set out in regulations 4;

(b) unless the rice concerned complies with the standards for the classes

set out in regulations 5;


(c) unless the Rice concerned is packed in containers and in the manner

prescribed in regulations 6 and 7;

(d) unless the rice concerned is marked with the particulars and in the manner prescribed in regulations 8,9, and 10;

(e) if the rice concerned contain a substance that has thus been

prescribed as a substance that it should not contain;

(f) if the rice concerned is packed in a container or in such a manner that

has thus been prescribed as a container or a manner in which it shall not be packed; and

(g) if the rice concerned is marked with particulars or in such a manner

that has thus been prescribed as particulars or manner in which it shall not be marked.

(2) The Executive Officer may grant written exemption, entirely or partially, to any

person on such conditions as he or she may deem necessary, from the provisions of sub regulation (1).

PART I

QUALITY STANDARDS General quality factors 3. Notwithstanding the provisions of regulations 4 and 5, all consignments of rice shall-

(a) be free from abnormal flavours and odours;

(b) be free from heavy metals in amounts which may represent a hazard to human health;

(c) be safe and suitable for human consumption;

(d) be free from poisonous seeds: Provided that a consignment of rice in bulk

quantities may contain poisonous seeds to the extent permitted in terms of the Foodstuffs, Cosmetics and Disinfectants Act, 1972 (Act No. 54 of 1972);

(e) comply with the maximum residue levels prescribed for agricultural remedies in terms of Foodstuffs, Cosmetics and Disinfectants Act, 1972 (Act No. 54 of 1972);

(f) have moisture content not exceeding 14 percent;

(g) be free from insects and mites;


(h) be free from organisms of phytosanitary importance as determined by Agricultural Pest Act, 1983 (Act No. 36 of 1983); and

(i) not have a deviation specified in column 1 of Table 2 to a larger extent than the applicable maximum specified in column 2,3,4 or 6 of Table 2 opposite thereof for the class concerned.

Classes of rice 4. All Rice shall be classified according to the length of grain as defined by regulation 5 -

(a) Long grain;

(b) Medium grain; or

(c) Short grain. Standards for classes 5. (1) The standards for grain length shall be as follows:

(a) Long grain rice – rice with 70 % or more of whole milled rice grains having a kernel length of 6.6 mm or more.

(b) Medium grain rice – rice with 70% or more of whole milled rice having a kernel length of 5.5 mm but less than 6.6 mm; and

(c) Short grain rice – rice with 70% or more of whole milled rice having a

kernel length of less than 5.5 mm. (2) Milled rice may be further classified into the following degree of milling:

(a) ''Under milled rice'' – means rice kernel from which the hull, a part of

the germ and all or part of the outer bran layers, but not the inner bran layers have been removed.

(b) "Well-milled rice'' – means rice kernel from which the hull, the germ,

the outer bran layers and the greater part of the inner bran layers have been removed.

(c) ''Extra-well-milled rice'' – means rice kernel from which the hull, the

germ and the bran layers have been completely removed.


PART II

CONTAINERS, PACKING AND MARKING REQUIREMENTS Requirements for containers 6. (1) Rice shall be packaged in containers which will safeguard the hygienic, nutritional and organoleptic qualities of the food. (2) The containers, including packaging material, shall be made of substances which are safe and suitable for their intended use. They should not impart any toxic substance or undesirable odour or flavour to the product.

(3) When the product is packaged in sacks, they must be clean, sturdy and strongly sewn or sealed. Packing requirements 7. Rice of different classes shall be packed in different containers, or stored separately. Marking requirements 8. (1) Each container in which rice is packed shall be marked in clearly legible letters with-

(a) the name of the product. (b) the class of rice. (c) degree of milling (optional). (d) the expression “Product of” followed by the name of the country of

origin thereof or the country of origin declared as required by regulations published in terms of the Foodstuffs, Cosmetics and Disinfectants Act, 1972 (Act 54 of 1972).

(e) Registered Trade Mark where applicable/ Product Brand of the

Product.

(2) Each container in which rice in retail quantities are sold, shall, either on the

main panel or in another conspicuous place thereon, be marked with- (a) the name and address of the packer of the rice as required by

regulation 10; and (b) the net weight as required in terms the Trade Metrology Act, 1973

(Act No. 77 of 1973).


(3) The particulars referred to in sub regulation (1) and (2) shall be indicated in detached letters and figures-

(a) that are in each separate case of the same colour, type and size;

(b) that appear on a uniform and contrasting background;

(c) that are clearly legible; and

(d) of which the vertical height is at least 5,0mm: Provided that the

indication of the name and address of the packer may be of a vertical height of at least 2mm.

Marking of containers in which Rice is packed in bulk quantities 9. (1) Subject to the provisions of subregulation (2), each container containing Rice in bulk, shall be marked clearly and legibly with block letters on the container itself, or on a label affixed to the container, with the following particulars: (a) the name of the product shown at least as Rice;

(b) the class of the Rice: Provided that the class may be omitted if the Rice have not been classified yet, or in the case of imported Rice destined for a purpose other than sale;

(c) a lot identification; (d) the country of origin; and (e) the name and address of the packer of the Rice as required by regulation 10:

Provided that the lot identification and the name and address of the packer may be replaced

by an identification mark, if such identification mark is clearly identifiable with the

accompanying sales documents.

(2) The country of origin may in the case of Rice destined for further processing

or packing be omitted, if the country of origin is indicated on the accompanying sales documents. Indications of packer 10. (1) The name of the packer of rice that is marked on the container shall –

(a) consist of the initials and surname or trade name of the packer or, in

the case of imported rice in retail quantities, the importer concerned; and


(b) be preceded by the expression "Packed by" or, in the case of Rice imported into the Republic in the containers in which they are to be sold in the retail trade, be preceded by the expression "Imported by".

(2) The address as contemplated in sub-regulation 1 of the packer of Rice and be

marked on such container immediately after the particulars referred to in sub-regulation (1).

(3) If rice is packed on behalf of a person –

(a) the particulars referred to in subregulation (1) (a) shall be replaced by the initials and surname or trade name of the person on whose behalf the Rice have been packed;

(b) such initials and surname or trade name shall be preceded by the

expression "packed for";

(c) the address of such person shall be indicated in the place of the address referred to in sub regulation (2);

(d) such address shall be marked on a container immediately after the

particulars referred to in paragraph (a); and

(e) the particulars referred to in sub-regulations (1) and (2) may in addition thereto be marked on a container.

PART III

SAMPLING General 11. (1) A sample of a consignment of rice shall for the purpose of the application of these regulations be obtained by – (a) in the case of rice in retail quantities packed in containers,

(i) randomly taking from the number of containers concerned, at

least the applicable number of containers mentioned in column 2 of Table 1;

(ii) sampling each such container by hand in the manner set out in

regulation 10: Provided that if the contents per container is 1kg or less the total contents of all the chosen containers will be taken as sample; and

(iii) in the case of rice in retail quantities that are kept for sale in

loose quantities, obtain a sample by hand in the manner contemplated in regulation 12;


(b) in the case of rice delivered in bags-

(i) sampling each bag in that consignment with a grain probe as contemplated in regulation 13 or by hand as contemplated in regulation 12 if it consists of 100 bags or less; or

(ii) by otherwise sampling at least 10 percent of the bags chosen

at random from that consignment at random with a grain probe as contemplated in regulation 13 or by hand as contemplated in regulation 12: Provided that at least 15 bags in a consignment shall be sampled and where a consignment consists of less than 15 bags, all the bags in that consignment shall be sampled.

(c) in case of rice delivered in bulk and subject to regulation 11, be obtained by sampling that consignment throughout the whole depth of the layer, in at least six different places, chosen at random in that bulk quantity, with a bulk sampling apparatus.

(2) The collective sample obtained in subregulation (1)(b) or (c) shall- (a) have a total mass of at least 5kg; and (b) be thoroughly mixed by means of dividing before further examination. (3) If it is suspected that the sample referred to in subregulation 1(b) is not

representative of that consignment, an additional 2 percent of the remaining bags chosen from that consignment at random, shall be emptied into a suitable bulk container and sampled in the manner contemplated in subregulation (1)(c).

(4) A sample taken in terms of this regulation is considered to be representative of

the consignment from which it was obtained. Sampling by hand 12. The sampling of a consignment by hand shall be done as follows:

(a) Open the containers in the consignment that have to be sampled.

(b) Insert the open hand wearing a clean new latex clove into such container or the loose quantity concerned, close the hand into a fist and thereafter withdraw it evenly.

(c) Place the material enclasped by hand in a suitable collecting tray.


(d) Repeat the procedure described in paragraph (b), alternatively, at various depths in the containers or loose quantities concern and place the material thus removed in the collecting tray referred to in paragraph (c).

(e) Take more or less equal quantities or material from each container sampled.

(f) Thoroughly mix the material thus obtained and divide it by means of a sample

divider to obtain a sample of at least 1kg of material. Sampling by means of a bag probe 13. (1) The sampling of a consignment with a bag probe shall be done as follows:

(a) Insert the tapered end of the bag probe towards at an angle of approximately 30 degrees with the horizontal line and with the aperture thereof pointing downwards, into each bag chosen from that consignment until the end of the probe is approximately in the centre of such bag.

(b) turn the bag probe through approximately 180 degrees on the

longitudinal axis thereof so that the aperture thereof is at the top. (c) Extract the bag probe with a slight shaking movement and

diminishing speed from the bag concerned to ensure that a relatively even and increasing flow of beans is maintained through the aperture thereof closer to the side of the bag.

(d) Place the material contained in the bag probe in a suitable container. (e) Repeat the procedure described in subparagraphs (a), (b) and (c)

alternatively at various depths or alternate bags and place the material thus removed in the container referred to in subparagraph (d).

(f) Take approximately equal quantities of material from each bag that is

sampled.

(2) A bag probe referred to in sub regulation (1) shall -

(a) be long enough so that the end thereof will reach the centre of a bag being sampled; and

(b) consist of a cylindrical tube with a tapered end and an aperture close

to the end. Working sample 14. A working sample shall be obtained by dividing the representative sample of the consignment according to the ICC/1 method.


PART IV

DETERMINATION OF OTHER SUBSTANCES Determination of undesirable odours and harmful substances 15. A sample of a consignment of rice shall be sensorial assessed or chemically analysed in order to determine - (a) whether it has undesirable flavours or odour: Provided that a working sample

of unscreened rice that is ground in a grain mill to a fine meal may be used for the determination concerned; and

(b) whether it contains a substance that renders the rice unfit for human consumption or for processing into utilisation as food or feed. Determination poisonous seeds, insects and mites content 16. A consignment of rice shall be sensorial assessed and a sample of that consignment shall be sensorial assessed and sorted by hand in order to determine whether the sample contains poisonous seeds, insects and mites. Determination of the length of the kernel 17. The length of the sample of rice in a consignment shall be determined as follows- (a) separate two sets of 100 kernels from the sample without any broken part, by random selection; (b) measure the length of the kernels using a micrometer and calculate the arithmetic mean of both sets of kernels. (c) calculate the average length of the two sets of kernels: Provided that if the standard deviation is calculated as being higher than 2, return all the kernels to the tray and repeat procedure from paragraph(a). (d) such an average length determined shall be deemed the average length of the rice in a consignment.

DEFECTIVE KERNELS

Determination of percentage of damaged kernels, the immature kernels or malformed kernels and the red kernels in the husked (brown) rice.


18. The percentage of damaged kernels, immature kernels or malformed kernels and the red kernels in the husked (brown) rice shall be determined as follows:

(a) Obtain a working sample of at least 100 g rice from either a random or a deviating sample, as the case may be.

(b) Remove all damaged kernels, immature kernels or malformed kernels and

red kernels in husked (brown) rice separately from the working sample. (c) Separate weight each of the identified defective kernels from each other. (d) Express the mass of the defective thus determined as a percentage of the

mass of the working sample.

(e) Such percentage shall represent the percentage damaged kernels, immature kernels or malformed kernels and red kernels in the consignment concerned.

Determination of the percentage heat damaged kernels, the chalky kernels and the waxy kernels in the husked (brown) rice. 19. The percentage heat damaged kernels, the chalky kernels and the waxy kernels in husked (brown) rice shall be determined as follows: (a) Obtain a working sample of at least 100g rice from either a random or a deviating sample as the case may be. (b) Remove all the heat damaged kernels, the chalky kernels and the waxy kernels from the working sample. (c) Separately weight each of the identified defective kernels from each other. (d) Express the mass thus determined as a percentage of the mass of the working sample. (e) Such percentage shall represent the percentage heat damaged kernels, the chalky kernels and the waxy kernels in the consignment concern Determination of percentage of damaged kernels, the immature kernels or malformed kernels and red-streaked kernels in the husked(brown)parboiled rice. 20. The percentage of damaged kernels, immature kernels or malformed kernels and red-streaked kernels in the husked parboiled rice shall be determined as follows:

(a) Obtain a working sample of at least 100g rice from either a random or a deviating sample, as the case may be.


(b) Remove all damaged kernels, immature kernels or malformed kernels and red-streaked kernels separately from the working sample.

(c) Separately weight each of the identified defective kernels from each other. (d) Express the mass of the defective thus determined as a percentage of the

mass of the working sample.

(e) Such percentage shall represent the percentage damaged kernels, immature kernels or malformed kernels and red-streaked kernels in the consignment concerned.

Determination of the percentage of the heat damaged kernels, and the pecks in husked (brown) parboiled rice. 21. The percentage of the heat damaged kernels, and the pecks in husked (brown) parboiled rice shall be determined as follows: (a) Obtain a working sample of at least 100g rice from either a random or a deviating sample as the case may be. (b) Remove all heat damaged kernels, the pecks separately from the working sample. (c) Separately weight each of the identified defective kernels from each other. (d) Express the mass thus determined as a percentage of the mass of the working sample. (e) Such percentage shall represent the percentage heat damaged kernels, the pecks in the consignment concern. Determination of percentage heat damaged kernels, the damaged kernels, the immature or malformed kernels, the chalky kernels, the red kernels, the red-streaked kernels and the waxy rice in milled (white) rice. 22. The percentage of the heat damaged kernels, the damaged kernels, the immature or malformed kernels, the chalky kernels, the red kernels and the red-streaked kernels in milled (white) rice shall be determined as follows:

(a) Obtain a working sample of at least 150g rice from either a random or a deviating sample, as the case may be.

(b) Remove all heat damaged kernels, damaged kernels, immature or malformed

kernels, the chalky kernels, red kernels and red-streaked kernels separately in milled (white) rice from the working sample.

(c) Separately weight each of the identified defective kernels from each other.


(d) Express the mass thus determined as a percentage of the mass of the working sample.

(e) Such percentage shall represent the percentage damaged kernels, immature

kernels or malformed kernels and red-streaked kernels in the consignment concerned.

Determination of percentage heat damaged kernels, the damaged kernels, the immature or malformed kernels, the red streaked kernels together with the red kernels, and the pecks in milled (white) parboiled rice. 23. The percentage heat damaged kernels, the damaged kernels, the immature or malformed kernels, the red streaked kernels together with the red kernels, and the pecks in milled (white) parboiled rice shall be determined as follows:

(a) Obtain a working sample of at least 150 g rice from either a random or a deviating sample, as the case may be.

(b) Remove all heat damaged kernels, the damaged kernels, the immature or malformed kernels, the red streaked kernels together with the red kernels and the pecks from the working sample.

(c) Separately weight each of the identified defective kernels from each other. (d) Express the mass thus determined as a percentage of the mass of the

working sample.

(e) Such percentage shall represent the percentage heat damaged kernels, the damaged kernels, the immature or malformed kernels, together with the red streaked kernels, and the pecks in the consignment concerned.

Determination of percentage the waxy rice in parboiled rice. 24. The percentage waxy rice in parboiled rice shall be determined as follows: (a) Obtain a working sample of at least 100g milled parboiled rice and put it into a glass beaker. (b) Add approximately 80ml of iodine working solution to soak the kernels an stir until all the kernels are submerged under the solution. Let the kernels soak in the solution for 30s. (c) Pour the rice and solution into a wire basket and shake the basket slightly in order to drain out the solution. Then place the basket on a piece of tissue paper to absorb the excess liquid.


(d) Pour the stained kernels into a bowl. Separate the reddish brown kernels of waxy rice from the dark blue kernels of non-waxy kernels (e) Weigh the waxy rice portion and the non-waxy rice portion separately.

(d) Express the mass thus determined as a percentage of the mass of the working sample.

(e) Such percentage shall represent the percentage waxy rice in the consignment

concerned.

PART V

MOISTURE CONTENT Determination of moisture content 25. The moisture content of a consignment of rice may be determined according to any suitable method: Provided that the results thus obtained are in accordance (± 0,3 per cent) with the results obtained by means of the 72 hour oven dried method (AACC Method 44/15A/1981).

OFFENCE AND PENALTIES 26. Any person who contravenes or fails to comply with any provision of these regulations shall be guilty of an offence and upon conviction be liable to a fine of not exceeding R50 000 or to imprisonment for a period not exceeding two years, or to both that fine or imprisonment.


ANNEXURES

TABLE 1

FREQUENCY OF SAMPLING

Number of containers comprising quantity of Rice

1

Minimum number of containers to be selected at random

2

Less than 10

2

11 to 50

4

More than 50 6

TABLE 2

STANDARDS FOR CLASSES OF HUSKED AND MILLED RICE

Maximum permissible deviation

Deviation

Husked

(Brown)

Rice

Milled

(White)

Rice

Husked (Brown)

Parboiled Rice

Milled

(White)

Parboiled

Rice

1. Heat-damaged kernels (yellow kernels) are kernels, whole or broken, that have changed their normal colour as a result of heating. This category includes whole or broken kernels that are yellow due to alteration.

4.0%

3.0%

8.0%

6.0%


2. Damaged kernels are kernels, whole or broken, showing obvious deterioration due to moisture, pests, diseases, or other causes, but excluding heat-damaged kernels.

4.0%

3.0%

4.0%

3.0%

3. Immature kernels are unripe and /or undeveloped whole or broken kernels.

12%

2.0%

12.0%

2.0%

4. Chalky kernels are whole or broken kernels except for glutinous rice, of which at least three-quarters of the surface has an opaque and floury appearance.

11.0%

11.0%

N/A

N/A

5. Red kernels are whole or broken kernels with red-coloured pericarp covering more than one-quarter of their surface.

12.0%

4.0%

12.0%

4.0%

6. Red-streaked kernels are kernels, whole or broken, with red streaks, the lengths of which may be equal to or greater than one-half of the whole kernel, but the surface area covered by these red streaks shall be less than one-quarter of the total surface.

N/A

8.0%

N/A

8.0%

7. Pecks are whole or broken kernels of parboiled rice of which more than one-quarter of the surface is dark brown or black in colour.

N/A

N/A

4.0%

2.0%


8. Waxy rice or glutinous rice are those varieties of rice whose kernels have a white opaque appearance.

1%

1%

1%

1%

This document is an output from a project funded by the UK Department for International Development (DFID).

However, the views expressed and information contained in it are not necessarily those of or endorsed by DFID who

can accept no responsibility for such views or information or for any reliance placed on them.

This publication has been prepared for general guidance on matters of interest only, and does not constitute

professional advice. The information contained in this publication should not be acted upon without obtaining specific

professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness

of the information contained in this publication, and, to the extent permitted by law, no organisation or person

involved in producing this document accepts or assumes any liability, responsibility or duty of care for any

consequences of anyone acting, or refraining to act, in reliance on the information contained in this publication or for

any decision based on it.

potential markets for malawi rice in zambia, zimbabwe and ......rice available in the informal...

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