Economy May 15, 2013
Beijing: China, the world's largest rice consumer, is expected to become the largest rice importer this year, according to a new report.
China's rice imports this year will surge to three million metric tonnes from 2.34 million tonnes a year ago, according United States Department of Agriculture report featured prominently in the Chinese media today.Imports of rice has increased since 2012 as "consumption demand for rice in China has exceeded the supply", it said. If the forecast holds true, it would represent a sharp increase as the country's rice imports hovered around 450,000 tonnes per year over the five-year period that ended in 2011, official data showed.
It would also make China outstrip Nigeria to become the world's largest rice importer, state-run China Daily reported.
Analysts said that China has no shortage of rice supplies and blamed the expected surge in imports on the price discrepancy between the domestic and global markets.
The discrepancy is a result of the government's minimum grain purchase price, which aims to shore up domestic grain prices after they declined in the global market due to weak demand and increased rice yields in recent years, the Daily report said.
The global rice output this year is expected to increase two per cent year-on-year to 479 million tonnes, making 2013 the eighth consecutive year of increased rice yields, according to the USDA.
Meanwhile, global rice stocks are expected to hit 107.8 million tonnes, the highest level since 2002, it added. "The government should allow the purchase price to have some flexibility, so that it fluctuates according to the international market," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd, one of the industry's largest specialist consultancies.
Meanwhile, rising labour costs and other factors are supporting rice prices in the domestic market, placing upward pressure on imports.
Lured by the low global prices, "Chinese companies are very willing to import", Ma said.
During the first three months of the year, China's rice imports jumped by a staggering 192 per cent from a year ago to 690,000 tonnes, Chinese official trade data showed. Because of the price discrepancy, imported rice will always be attractive to domestic companies, Ma said.
"The government should continue increasing its investment in the agricultural sector to drive down prices in the long run," he added. Imports of other agricultural commodities are also expected to increase.
Also China's soybean imports are expected to rise by 10 million tonnes from a year ago to 69 million tonnes, according to the USDA forecast.
China's grain output reached 589 million tonnes in 2012, the ninth consecutive year of increased harvests, according to the official data.
More From Firstbiz Staff.