High Domestic Prices Propel Rice Imports by China

according to latest data from the USDA. Further, China’s rice imports are projected to surge to record levels of around 2.4 million tons in 2012-13, making it the highest rice importer ahead of Nigeria which is predicted to import around 2.3 million tons in 2012-13, says the USDA. The UN’s Food and Agriculture Organization (FAO) says that China’s rice imports in 2012 have already crossed 2 million tons.

China's rice production is expected to grow in both 2011-12 and 2012-13, but production costs are reported to be high. USDA data shows that rice production in China is estimated to reach around 140.7 million tons in 2011-12, up about 3% from 137 million tons in the previous year. Meanwhile, consumption in 2011-12 is estimated to be around 139.5 million tons, which could be met by domestic production. Next year, China’s rice production is forecast to reach 143 million tons, compared to consumption of around 144 million tons.

The Chinese government continued to increase the minimum purchase price for rice this year, raising prices by 17% for indica paddy rice to 1.25 yuan per 500 grams (about $395 per ton), thereby pushing domestic rice prices higher.

According to FAO, the price of indica variety milled rice in China increased to about 3,900 yuan ($625) per ton in September, up about 11% from last year. This is much higher than high quality Vietnam 5% rice (quoted around $410 per ton as of today), prompting local traders to import rice from Vietnam and other cheaper origins. According to FAO, Vietnam alone has accounted for around 1.43 million tons of rice imports by China during January to October 2012.

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