Despite its efforts to boost grain yields for the 10th consecutive year, China - the world's largest rice consumer - is expected to become also the largest rice importer this year, according to a new report.

The country's rice imports this year will surge to 3 million metric tons from 2.34 million tons a year ago, according to the report, released by the United States Department of Agriculture.

Since 2012, "consumption demand for rice in China has exceeded the supply", the report said.

If the forecast holds true, it would represent a sharp increase as the country's rice imports hovered around 450,000 tons per year over the five-year period that ended in 2011, official data showed. It would also make the country outstrip Nigeria to become the world's largest rice importer.

Analysts said that the country has no shortage of rice supplies and blamed the expected surge in imports on the price discrepancy between the domestic and global markets.

The discrepancy is a result of the government's minimum grain purchase price, which aims to shore up domestic grain prices after they declined in the global market due to weak demand and increased rice yields in recent years, analysts added.

The global rice output this year is expected to increase 2 percent year-on-year to 479 million tons, making 2013 the eighth consecutive year of increased rice yields, according to the USDA.

Meanwhile, global rice stocks are expected to hit 107.8 million tons, the highest level since 2002, the report added.

"The government should allow the purchase price to have some flexibility, so that it fluctuates according to the international market," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd, one of the industry's largest specialist consultancies.

Meanwhile, rising labor costs and other factors are supporting rice prices in the domestic market, placing upward pressure on imports. Lured by the low global prices, "Chinese companies are very willing to import", Ma added.

During the first three months of the year, China's rice imports jumped by a staggering 192 percent from a year ago to 690,000 tons, Chinese official trade data showed.

Because of the price discrepancy, imported rice will always be attractive to domestic companies, Ma said.

"The government should continue increasing its investment in the agricultural sector to drive down prices in the long run," he added.

Imports of other agricultural commodities are also expected to increase.

The country's soybean imports are expected to rise by 10 million tons from a year ago to 69 million tons, according to the USDA forecast.

China's grain output reached 589 million tons in 2012, the ninth consecutive year of increased harvests, official data showed.

zhousiyu@chinadaily.com.cn

(China Daily 05/15/2013 page13)