Rice Highlights: Trend Shifts in China, Indonesia and Philippines

on Nov 28, 2012

**China on Track to Record Rice Import Levels**

*The Financial Times* reported on 27 November 2012 that China’s rice buying has quadrupled in the first 10 months of the year, putting the world’s biggest rice consumer on track to import record levels as changing diets and a growing population boost demand for the white grain.
According to the paper, citing newly released data from customs, for the 10 months to October this year, China has imported 1.98 million tonnes of rice, compared with purchases of 505,000 tonnes during the same period in 2011 — an increase of nearly four times. The surge is even more pronounced in terms of net imports, which grew 11 times over the cited period.

This rice import jump marks a significant shift for China, which is the world’s biggest producer of the grain, a staple foodstuff in the country. Over the past two decades, the country has been mostly self-sufficient in terms of rice output. Last year, however, China became a net importer due to its inability to meet the increasing rice demand of its constantly-growing population amid industrial expansion and shrinking room for farmland. According to some analysts, this recent trend is likely to remain and even accelerate with rice import levels continuing to grow next year. This prospect has raised market concerns, since China consumes nearly a third of the world’s rice even small shifts in its demand could have a big impact on global prices.

**Indonesia and Philippines Set to Reduce Rice Purchases**
While China’s rice imports head to record levels, other Asian states boost output and reduce their need of buying in from overseas. According to a report by Bloomberg from 28 November 2012, citing two local executives, Indonesia and the Philippines are set to cut their rice purchases next year.

!m[China’s Rice Demand Boosts Imports to Record High, while Philippines and Indonesia Poised to Cut Purchases](/uploads/story/918/thumbs/pic1_inline.png)Mohammad Ismet, a consultant at the United Nations in Jakarta who formerly worked at Bulog, the state food agency, said that Indonesia, 2011’s largest rice importer, will probably reduce purchases to about 1.5 million tonnes from 1.7 million tonnes this year.

“Abundant supplies and prospects for good production have resulted in high global stocks and lower prices,” Ismet said in an interview in Singapore on Tuesday.
Meanwhile, a spokesman for the National Food Authority in the Philippines, Rex Estoperez, has recently said that the country, which was the biggest rice importer until 2010, may end overseas purchases. Earlier this year, in October, Agriculture Secretary Proceso Alcala said that imports by the Philippines will probably drop to 100,000-150,000 tonnes in 2013.
**Record Rice Output and Stable Prices**
According to a report released last month by the Food and Agriculture Organisation (FAO), global milled rice production in 2012 will reach an all-time high of 486 million tonnes, increasing inventories to a record 170 million tonnes.
While estimates point to record rice production, prices have been stable in 2012. So far this year, rice traded in Chicago has gained 1 per cent, compared to a 36 per cent jump in wheat and a 17 per cent rally in corn. As Asian shippers competed for market share, rice export prices, tracked by the United Nations, declined 3.6 per cent in the 12 months to October.