China: Largest rice market in the world

USRPA is optimistic that one day U.S. rice will be sold in China.

By Dwight Roberts
President and Chief
Executive Officer

China, the largest rice producer in the world, is also the largest rice consumer. With its 1.3 billion people, China has 20 percent of the world’s population but just seven percent of the arable land and seven percent of the water resources.

China is by far the largest food market in the world and the most important market for U.S. agriculture having moved past Canada in 2010 to become the No.1 export destination for U.S. agricultural products, reaching a value of $17.8 billion in 2010. According to USDA’s Foreign Agricultural Service, China’s food demand continues to outpace its domestic production, creating a market opportunity for exporting countries such as the United States.

Milo Hamilton, a Senior Economist at Firstgrain, Inc. believes China has some difficulties. In particular, water, urbanization, climate, pollution and a desire by its middle class for safe rice free of Cadmium and other objectionable materials.

Market Research In China

Since 2005, the US Rice Producers Association has worked hard to develop relationships and conduct market research in China in order to understand the possibility of one day selling U.S. rice to this expanding market. Thanks to funding from USDA’s Foreign Agricultural Service (FAS) and a partnership with the Animal & Plant Health Inspection Service (APHIS), the reality of accessing a market is moving forward in a positive manner.

After conducting supermarket tastings and surveys, it became obvious that the Chinese people like quality U.S. rice and are willing to pay a premium price if the product is available. Taste, appearance, quality, safety and nutrition are as equally important to the Chinese high-end consumer as price.

The only thing keeping the United States out of the market is lack of phytosanitary protocols between the two countries for the shipment of rice. Working with APHIS and research specialists in 2009, a pest risk analysis (PRA) was conducted at the request of the Chinese government.

Chinese Officials/Rice Buyers Visit U.S.

Upon completion of the analysis, the USRPA was awarded an Emerging Market Program grant from the FAS for a reverse trade mission to bring Chinese AQSIQ officials and importers to the United States. In July of 2011, the Chinese accepted an invitation to tour the U.S. rice farms and mills to complete the PRA. The officials travelled to farms and mills in California, Arkansas and Louisiana. The trip was a success, and the Chinese team got all their questions answered.

The first Chinese rice buyers to ever visit the United States arrived in November 2011 to tour mills and farms to educate themselves about U.S. rice. These buyers toured all six rice-producing states on their 11-day trip, visiting 10 rice mills, exporters and port facilities. The buyers stressed quality at each opportunity.

In January 2012, the USRPA returned to China to meet with Chinese officials and the local FAS staff at the U.S. Embassy and Agricultural Trade Office. The result: Chinese AQSIQ officials in Beijing said they will meet in February after the Chinese New Year to discuss requirements for entry of U.S. rice. Officials also stated that there are no potential problems to establishing the protocols.

USRPA’s efforts to establish a rice protocol between the USA and China are ongoing. In the meantime, USRPA continues to conduct market research, identify new importers in the key markets of Beijing, Shanghai, Guangzhou and Hong Kong in coordination with FAS posts in China. Stay tuned for new developments!

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