Support prices and actual sale prices from National Development and Reform Commission
production cost surveys.
While officials are worried about raising the price to induce farmers to keep growing rice, lower-priced imported rice has been making inroads in the Chinese market for the first time since the 1990s. Usually, Chinese rice imports are exclusively high-end fragrant rice from Thailand, but this year customs statistics show that China has imported 1.88 million metric tons of rice from January to August of 2012, mostly from Vietnam and Pakistan. Traders in Yunnan say another 1 million metric tons not counted in customs statistics has entered China from Southeast Asia. The imports are mostly low-priced, low-quality rice that competes against early indica rice, historically a low-quality rice shunned by most Chinese consumers.
With cheaper imports available and another record fall rice crop about to be harvested, the market for early rice is limited. Its role is largely to fill up reserves. (A decade ago, rice reserves were overstocked and the government canceled its "protection price" for early rice.) The Futures Daily writer says that in the short term the early indica rice price will be under downward pressure. Yet officials will feel obliged to give another double-digit boost to the support price to "send a signal" to producers. The market says "down," the government says "up," and "up" it will be.
Perhaps we are seeing the beginning of the unraveling of China's free market agriculture experiment.