Thursday, December 6, 2012

Chinese City Imports Rice From 7 Countries

In another sign of China's transition from a country of farmers to a consumer country, a city in Fujian Province is importing rice from seven countries this year to keep a lid on prices.

Xiamen is a prosperous port just across the straight from Taiwan. This year local grain companies have struck deals with Thailand, Vietnam, Pakistan, Uruguay, Burma, Cambodia and India to supply rice to the local market. Xiamen has imported 100,000 metric tons of rice in the first ten months of this year. There are four new countries supplying imports this year and India will begin exporting to Xiamen after procedures are completed.

A representative from a local grain company explained that Xiamen relies on bringing in rice from elsewhere since it doesn't have a lot of local production. The purpose of the imports is to satisfy local demand and keep prices down. The imported rice from Vietnam and Pakistan costs about 2 yuan per 500g, about 40 percent less than Thai rice.

The article says that in the fourth quarter of this year the government will eliminate quarantine and inspection fees on imported rice. This will reduce the cost to companies by 28 percent.

The imported rice, however, is kept segregated from the general market to minimize competition with domestic rice. It can't be sold directly in retail markets. According to the article, regulations prohibit the imported rice from being sold under a brand name in order "to protect local companies."

Rice mill managers say local consumers are not accustomed to the taste of the Vietnamese and Pakistani rice and none of the supermarkets sell it. They say the imported rice is mainly used for food processing or in cafeterias for factory workers. Some mills mix it with domestic rice. A manager remarks that the rice from Uruguay is not bad. Ironically, it is often sold to "western restaurants" to be used for fried rice.

A Xiamen grain bureau official credits the imported rice for keeping prices down despite rising prices in production areas recently. A local grain company official remarked that some of the imported rice is transported to inland areas where it puts downward pressure on rice prices.

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