Rice imports seen soaring in wake of disasters

08:35, August 13, 2010      

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Economists and analysts Thursday downplayed concerns over food security following a reported surge in rice imports from Vietnam since May, amid fears that this year's droughts and floods in China may affect grain production and push up prices.

Reuters quoted Vietnamese rice traders on Tuesday as saying they have exported 600,000 tons of rice to China since May. And the Vietnam Food Association said much of those shipments were going to buyers in southern China hoping to offset a rice shortage resulting from severe drought.

The group said the shipments were "unusually big orders" from China, the world's largest rice consumer and producer.

That 600,000 tons, if accurate, is more than three times the total amount of rice the Chinese government says was imported into the country during the first six months of the year.

Neither the Chinese Ministry of Agriculture nor the Ministry of Commerce would confirm the report Thursday.

Zhu Jianfang, a chief economist with CITIC Securities, told the Global Times Thursday that if the number is accurate, "imports of some 600,000 tons of rice from Vietnam will not have any impact on China's rice reserve, because 95 percent of the rice in the Chinese market is provided domestically."

"Importing rice from Vietnam is expected to enrich the variety of rice in the domestic market," he added.

The latest figure released by the Ministry of Agriculture showed that China's rice imports in the first six months were up 44.3 percent, year on year, totaling 174,000 tons. By contrast, rise exports dropped almost 25 percent.

Food-security concerns have been raised, given that domestic grain prices are expected to be pushed up as this year's domestic agricultural production has been affected by natural disasters, including drought and floods.

"Compared with last year, the production of early-season rice fell," Niu Dun, vice minister of agriculture, was quoted by the Xinhua News Agency as saying Thursday. "A good harvest of crops mainly depends on the autumn grain harvest, including second-season rice and corn."

Wang Guozhi, an official with the provincial government of Heilongjiang, a major grain-production base in China, told the Global Times that "the amount of imported rice from Vietnam is small, especially compared with the more than 10 million tons of rice produced in Heilongjiang Province per year.

Wang said the rice output from Heilongjiang accounts for about 30 percent of the country's total.

Wang said that a variety of grain sources, and a small amount of rice imported, are actually good for the market, helping it deal with emergency situations such as disastrous weather.

Vietnam is the world's second-largest rice exporter after Thailand.

Wang Jimin, a researcher with the Chinese Academy of Agricultural Sciences (CAAS), told the Global Times that "some buyers may speculate as they anticipate that prices may be pushed up because of natural disasters."

The Guangzhou Daily quoted a Thailand source familiar with rice exports as saying Thursday the "low price of Vietnamese rice is a dominant factor that has won the hearts of Chinese buyers."

But Chinese demand could hardly result in a sharp impact on the domestic rice supply of Vietnam, Wang said.

Vietnam Food Association (VFA) Chairman, Truong Thanh Phong, said Tuesday that "the Chinese market is an unknown, because we don't know how large their rice shortage is," implying a warning of a possible shortage in his country, according to the association's website.

The VFA has asked food companies to cap rice export levels and keep prices unchanged, Vietnamese media reported Thursday. The association also asked its member enterprises to ensure rice stock for market stabilization.

Tran Tien Khai from HCM City Economics University urged verification of the large VFA figure of rice sold to China to "avoid creating unreasonable worries," local media reports said.

"I personally do not believe that within such a short time, one month, Chinese importers could purchase such a big volume of rice," he argued.

Chen Rui and agencies contributed to this story

By Guo Qiang , Global Times


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