China is the biggest rice producer with the ample of rice supply is importing the rice for the first time owning the title of biggest rice importer overtaking Nigeria
Historically china is the largest rice exporter and consumer of the rice but the past years poor rainfall have destroyed the crop but sti;ll it has been the the rice exporter shipping rice to Asia and Africa.
In 1998, China was the fourth-largest exporter, accounting for 14 per cent of the global market, according to the US Department of Agriculture.
In the past three years it has been purchasing the rice from Vietnam, Pakistan and Myanmar.
The main reason behind the increase in the rice importation by the China is due to cheap overseas rice when Beijing’s price support for the grain has led to high prices.
Ma Wenfeng, crop analyst at Beijing Orient Agribusiness, said the lower importation cost than to buy the domestic price is the reason for their temptation for the foreign rice.
To incentivise agricultural production, China has provided farmers with subsidies as well as putting in place a minimum procurement price for certain grains to reduce volatility in the domestic rice market. However, this has meant domestic prices for certain agricultural products has “decoupled” from the international market.
Beijing’s minimum procurement rice for long grain domestic rice is set at $US 420 a tone, but spot prices about $US600 a tone which is 50% higher than the Vietnam’s.
“China’s rice imports are largely a policy-driven phenomenon,” said Fred Gale, senior economist at USDA.
Another reason cited by some analysts for the rise in rice imports is the recent cadmium contamination scare.
Concerns about soil pollution affecting the grain from Hunan and Guangdong might have added further impetus to buying from overseas markets, they say.
Import sustained by demand
The main question troubling traders is whether China will remain a rice importer, as is the case with other cereals, or go back to its limited role in the international arena, focusing on domestic production. The country is the world’s largest soybean importer and its overseas corn purchases are also growing. Heavy rains in some growing regions mean China will become the second-largest wheat importer after Egypt this crop year.