Hunan Rice Sales Plunge as China Probes Cadmium Contamination

Sales of rice from China’s top producing province have slumped amid reports that supplies from Hunan contain traces of cadmium that exceed government limits, a state-owned agriculture researcher said.

Rice traders in Hunan reported sales dropping by more than half from a year ago since media reports of the pollutant in began appearing, Cngrain.com said on its website. The researcher, which is owned by China Grain Reserves Corp., a custodian of government food reserves, didn’t provide figures for the drop in sales.

The Nanfang Daily first reported in February that rice from Hunan sold in southern Guangdong province contained excessive levels of toxic metal and the Guangzhou Food and Drug Administration reignited concerns with reports on its website last week. It is a blow to farmers in the region because sales of indica rice, a long-grain variety consumed in southern China and used for milling and brewing, were already being hurt by low-cost imports, Zhang Zhixian, analyst of Cngrain.com, said by phone from Zhengzhou in central China.

Consumers in some areas may become more willing to buy imported rice, said Li Qiang, chairman at Shanghai JC Intelligence Co. China’s quota system for imports will limit any increase, he said.

Imports may reach 3.25 million metric tons in 2013, little changed from a record of 3.35 million tons last year, according to Cngrain.com. China buys rice mainly from low-cost producers including Vietnam and Pakistan.

Rice Futures

Rice futures in on the Zhengzhou Commodity Exchange, which trades the same variety of the grain grown in Hunan, have fallen 2.7 percent this year and the September contract closed at 2,627 yuan ($428) a ton today.

Hunan’s output of unhusked rice totaled 25 million tons in 2011, or 12.8 percent of the country’s total, according to data by the Ministry of Agriculture.

The Guangzhou Food and Drug Administration said in a May 16 report on its website that 44 percent of rice tested in selected samples had excessive levels of cadmium. Most of the rice that that failed to meet the standard was from two counties of Hunan, the official Xinhua News Agency reported today, without citing anyone.

To contact Bloomberg News staff for this story: William Bi in Beijing at wbi@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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