China buys first Indian rice in decades amid scarce supply (updated)

KRBL

02/12/2020 11:18

* China buys 100,000 T broken rice at $300 per tonne
    * China's traditional suppliers struggle due to lower crop
    * India offers rice at lower price than other Asia suppliers

 (Adds details, analyst comment)
    By Rajendra Jadhav
    MUMBAI, Dec 2 (Reuters) - China has begun importing Indian
rice for the first time in at least three decades due to
tightening supplies from Thailand, Myanmar and Vietnam and an
offer of sharply discounted prices, Indian industry officials
said.
    India is the world's biggest rice exporter and China the
biggest importer. Beijing buys in around 4 million tonnes a year
but has avoided purchases from India, citing quality issues.
    The rice imports come despite political tensions over a
border dispute in the Himalayas which erupted into a clash in
June in which 20 Indian soldiers were killed.
    India has since tightened rules for investments from China
and banned dozens of Chinese mobile apps, including from tech
giants Tencent, Alibaba and ByteDance.
    Although the public mood in India has been anti-China, the
country has remained engaged with Indian businesses.
    "For the first time China has made rice purchases. They may
increase buying next year after seeing the quality of Indian
crop," B.V. Krishna Rao, president of the Rice Exporters
Association, told Reuters on Wednesday.
    Indian traders have contracted to export 100,000 tonnes of
broken rice for Dec-February shipments at around $300 per tonne 
on a free-on-board (FOB) basis, industry officials said.
    China's traditional suppliers, such as Thailand, Vietnam,
Myanmar and Pakistan, have limited surplus supplies for export
and were quoting at least $30 per tonne more compared with
Indian prices, according to Indian rice trade officials.
    Thailand, the world's second-largest rice exporter and key
supplier to China, suffered a drought this year that has
affected the rice crop. Its shipments in 2020 could fall to 6.5
million tonnes, the lowest in 20 years.  urn:newsml:reuters.com:*:nL4N2GY0MO
    "Thailand, Myanmar and Vietnam are struggling due to limited
supplies. China eventually was left with no option but to buy
from India," said Himanshu Agarwal, executive director at Satyam
Balajee, India's biggest rice exporter.
    "I don't know how long it will last. At least, movement has
started."
    China's General Administration of Customs did not
immediately respond to a fax seeking comment on rice imports.
    "China buying rice from India, or U.S. or any country, is
just adding some flavor to the domestic market. The trade has
very limited impact on the China market," said Yin Xiuying,
analyst with trade website www.ChinaGrain.CN, based in Harbin,
capital of China's northeastern province of Heilongjiang. 
    "I don’t think China will increase rice imports or continue
to buy more from India," Yin said.  

 (Reporting by Rajendra Jadhav; Additional reporting by Hallie
Gu and Dominique Patton in BEIJING; Editing by Sanjeev Miglani
and Alexander Smith)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters
Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))