China’s Imports May Boost Rice in Lean Years, Shanghai JC Says
Rice imports by China, the world’s largest producer, may cause a shortage and spark a rally in prices in lean production years, said Li Qiang, managing director at Shanghai JC Intelligence Co.
China quadrupled imports in 2012 to become the second- largest importer, from the 18th biggest in 2011, amid record production, the U.S. Department of Agriculture said Dec. 11. The country imported 2.6 million metric tons of rice in 2012, compared with 575,000 tons a year earlier, and will import 2 million tons this year, the USDA said.
Rising imports by China, the largest consumer, may bolster prices even as world inventories tracked by the UN’s Food & Agriculture Organization swell to a record with the biggest global crop ever. While rice, the staple for half the world, has risen 3.1 percent in Chicago in the past year, it is 18 percent below a three-year high in September 2011. Most purchases by China, which typically imports from Thailand, were of Vietnamese origin this year.
“Rice demand and supply in China needs to be closely monitored in the future to see if such a rising trend of imports will persist,” Li said. “That could present a challenge, especially when problems such as weather or pests reduce output in the neighboring countries.”
The country may import less this year because the central and provincial governments boosted spending on subsidies to farmers in an effort to ensure self-sufficiency, Li said.
China produced 143 million tons of milled rice last year, while consumption reached 144 million tons, according to the USDA. While there’s no shortage in China, processors increased imports to profit from the difference between domestic and overseas rates, Bai Peipei, an analyst at Beijing Shennong Kexin Agribusiness Consulting Co., said on Dec. 12.
To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Brett Miller at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.