China Rice Market to Open Up to U.S. Imports With Trade Accord

September 15, 2015 05:00 AM
China Rice Market to Open Up to U.S. Imports With Trade Accord

China, the world’s largest rice market, is poised to open up to U.S. exports with both countries’ governments due to sign an accord later this month ratifying American imports.

The so-called phytosanitary protocol for rice is expected to be signed during Chinese President Xi Jinping’s visit to Washington, the Houston-based U.S. Rice Producers Association said Monday in a statement.

“It’s a significant event that they would buy rice from the western hemisphere,” Milo Hamilton, president of Austin, Texas-based Firstgrain, a rice-trading advisory company, said in a telephone interview. The accord “does not mean they will buy rice from the U.S. It means they can buy rice from the U.S.”

China is the biggest producer and importer of rice. While it’s still largely self-sufficient, its imports have gradually climbed in recent years. Inbound shipments of milled rice are expected to be 4.7 million metric tons in the 2015-16 marketing year, up from 540,000 tons five years earlier, according to U.S. government data.

Most of the imports come from neighboring Vietnam because of “price, proximity, and quality,” the producers association said. U.S. sellers haven’t been able to ship to China because rice wasn’t included in earlier trade negotiations that now allow the annual sale of millions of tons of other American agricultural commodities including soybeans.

The rice producers group has been lobbying for Chinese market access for more than 15 years.

“When we started on this process, China wasn’t involved on the international marketplace,” Dwight Roberts, the group’s president, said in a telephone interview. “We’ve learned that things change. We’re at the end of a long process.”

In the short term, China may import 200,000 to 250,000 tons of high-quality U.S. rice per year, providing a "significant boost" to the American industry, the group said. In total, the U.S. is expected to export 3.08 million tons in the year that began Aug. 1, down from 3.21 million in the prior year.

The U.S. is forecast to produce 6.02 million tons, equivalent to about 4 percent of Chinese output.


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