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Soaring Global Rice Prices Will Not Have Much Impact on China, Experts Say

(Yicai) Aug. 21 -- The rising price of rice on the international market will only have a limited impact on China, which is the world’s biggest rice producer and has ample reserves, the Economic Daily reported today.

China has a low dependence on rice imports and so the high prices overseas will not affect it much, the report said, citing Zhang Huizhuo, deputy director at Chinese edible oil and grain supplier Yihai Kerry Arawana Holdings' rice business group.

The country has an abundant supply of homegrown rice and more than enough to meet its own needs, the report said. China produces around 200 million tons of the grain a year, about 28 percent of the global total.

The jump in international rice prices this year is causing concerns about food safety. The Food and Agriculture Organization’s All Rice Price Index climbed 2.8 percent in July from a month ago to 129.7 points, the highest in almost 12 years, according to data recently released by the United Nations’ agency. 

India is the world’s biggest rice exporter, exporting 22 million tons of rice last year or 40 percent of the world’s exports. In order to rein in runaway prices and to ensure domestic supply, India imposed a ban on rice exports on July 20. This was then followed by the United Arab Emirates and Russia, which triggered panic buying in some countries and a further spike in prices.

India's rice export ban will not have a big impact on China, Zhang said.

China imports rice for use in animal fodder and to make adjustments in supply, the report said, citing Peng Chao, researcher at the Administration and Management Institute of Ministry of Agriculture and Rural Affairs. Chinese importers are also diversifying their sources to avoid risks associated with over-concentration of sources and varieties. 

Most of China’s rice imports are from Vietnam, followed by Myanmar, Thailand, India and Pakistan. India used to be the biggest rice supplier to China, but since China started to reduce its imports of broken rice from India in October last year, it has now slipped to fourth place, accounting for 38 percent of imports.

China is using more wheat in animal fodder to reduce its rice imports. In the first half, it imported 7.9 million tons of wheat, a jump of 62.1 percent.

Editor: Kim Taylor

Source: Yicai Global