China Rice report

Production Total rice production is estimated at 196 MMT (unmilled) in MY 2009/10, up three percent from the previous estimate and two percent from the previous year, mainly attributed to record yields of early season Indica in southern China. Total estimated planted area is 29.5 million Ha, up one percent from the previous year and unchanged from the previous estimate. Early-season rice production is estimated at 33 MMT, 1.5 MMT higher than previous year. Because of favorable weather conditions, early season Indica rice yield reached a record high of 5.7 MT/Ha in MY 2009/10. Except for Heilongjiang Province, all major rice producing provinces reported an above average yield for late season Indica rice and Japonica rice. In Heilongjiang Province, the Japonica rice yield and quality was damaged by low temperatures and excessive rainfall in June and July. Rice production for MY 2010/11 is forecast at 197 MMT, up one percent from the previous year, assuming average yields. Acreage is forecast to rise one percent from the previous year. The central government's price support program (see Policy section) has guaranteed reasonable returns for rice farmers. Consumption MY 2009/10 overall rice consumption is estimated at 134.5 MMT (milled), up three percent from the previous estimate and one percent from the previous year. For food consumption, traditionally, Indica rice is favored by consumers in southern China while Japonica rice is favored in northern China. As discussed in the wheat section, surveys show per capita in-house grain consumption (including rice and wheat) declined gradually over the previous years and this trend is projected to continue. In addition to food use (for human consumption), low quality early rice varieties and stale or rancid rice reserves are used to feed swine and poultry in both commercial farms and rural households. High corn prices in MY 2009/10 resulted in a greater proportion of both rice and wheat being used for animal feed use. While there is no reliable data on feed rice use, Post estimates that approximately 11 MMT of rice (unmilled) was used for feed in MY 2009/10. Source: World Trade Atlas Trade Rice imports in MY 2009/10 are estimated at 300,000 MT, and forecast to increase 10 percent to 330,000 MT in MY 2010/11. Most imports are Thai fragrant rice varieties, which are consumed in hotels or restaurants in more affluent coastal cities or by high income populations. Such imports are expected to continue to rise in tandem with increasing consumer incomes, making Thai rice more affordable. However, traditional dietary habits still persist in most of China and the average consumer still favors local rice varieties as a staple food. Rice exports in MY 2009/10 are estimated at 850,000 MT, 8.5 percent higher than the previous year. China’s exports of rice in MY 2010/11 are forecast to increase to 900,000 MT. The steady rise in exports could be attributed to improved management on rice quality at processing plants. Due to geographical proximity and Japanese rice processing investment in China, nearby Asian markets such as Japan and Korea favor China’s Japonica rice varieties from the northeast. Prior to 2008, China exported low quality Indica rice to African countries and traders benefited from a 13 percent VAT export rebate. In 2008, the GOC removed the VAT rebate to discourage exports of rice and other grains. However, China continues to export a small but highly profitable volume of Japonica varieties to Japan and South Korea. Exports are subject to a quota levied by the importing country and no substantial increase is expected, but the current volume is forecast to continue over the next two years. Stocks While official national reserve data are not available, Post estimates ending stocks for MY 2009/10 at 41 MMT (milled), and forecasts they will grow to 43 MMT in MY 2010/11, given the six most recent years of production increases.