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Flooding in Thailand not likely to affect China's food prices

(China Daily)

09:49, November 02, 2011

BEIJING - The price of rice in China is likely to remain unaffected for the time being, despite the upward pressure on the international market prompted by recent flooding in Southeast Asia, said analysts and food industry insiders on Monday.

In September and early October, heavy rains and tropical storms brought floods that devastated a number of Southeast Asian countries, including Cambodia, Laos, the Philippines, Thailand and Vietnam.

Compared with China's high level of domestic production, the country imports a "very minute" amount of rice as a high-end agricultural product from the flood-stricken area annually, according to analysts.

Given the effect of the floods on the region's agricultural production, China might resort to importing rice from other member states of the Association of Southeast Asian Nations (ASEAN), they added.

"China has enough rice in the domestic market and so the flooding in Southeast Asia is unlikely to cause price fluctuations," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd.

"But as the market is still awash with liquidity, the government should be cautious in case the natural disaster prompts speculation in the price of rice," he added.

Besides high-end rice, China also imports tropical fruit from a number of Southeast Asian countries. "But the import volume is still very small compared with China's domestic output, and is unlikely to have any substantial influence on the price of fruit," said Hu Bingchuan, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences.

"If the floods push the price of imports too high, China might turn to other ASEAN member states for imports of agricultural products," he added.

The floods have caused serious damage to standing crops, particularly in paddy fields in low-lying areas.

Although no precise figures are yet available, Thailand has estimated that standing crops across 1.6 million hectares (12.5 percent of the nation's cropped area) have been damaged, according to data from the United States Food and Agricultural Organization.

Plentiful reserves of food in Beijing mean that the effects of the flood have yet to register in restaurants and supermarkets selling Thai food in the capital, according to people in the business. But the long-term effects remains unpredictable, they said.

"We bought Thai food before the flood and our reserves mean that prices in our store are unchanged," said Rocky Jia, the manager of Jenny Lou's in Beijing's Sanlitun area, a popular supermarket selling a variety of imported foodstuffs.

"But I can't tell if the flooding will affect our imports of Thai food or the price in the near future," he added.

Meanwhile, restaurants that obtain Thai foodstuffs from domestic suppliers say prices haven't changed as yet.

"We get our Thai food materials from domestic suppliers, and so far we haven't been affected by the flooding in Thailand," said a staff member at Taihaowei (Good Thai Food), a Beijing-based restaurant. "Everything is going on as before."

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