A cointegration analysis performed in this paper finds that the international rice market is highly segmented. This is explained by the high degree of market intervention in this sector due to food security reasons and by strong consumer preferences for specific rice varieties. This finding is supported by subsequent estimation of the elasticities of substitution between rice imported from different sources. The estimates are found to be substantially lower than those often used in e.g. computable general equilibrium models. This implies that trade liberalization will have less of an impact than otherwise predicted