Demand for rice in Chinese market is huge
Mr. Nong Duc Lai - Commercial Counselor in China - said that China is a populous country and people have a habit of eating rice every day. This habit has entered Chinese culinary culture, so consumer demand for rice in this market is huge. But China is also the country that produces and has the largest rice output globally.
According to data from National Bureau of Statistics of China, from 2021 until now, the country's rice output has reached over 200 million tonnes/year and even since 2015, output has exceeded 210 million tonnes/year. However, in the past 2 years, due to impact of weather factors, the El Nino phenomenon caused droughts and floods. In addition, pace of urbanization is increasingly deepening and area under rice cultivation has decreased, leading to a decrease in rice output in recent years compared to previous years.
According to China agricultural outlook report for a period of 2022 - 2031 of Market Forecast Expert Council - Ministry of Agriculture and Rural Affairs of China as well as a number of reports of a number of independent research organizations show that consumption China's rice has reached threshold of 150 million tons since 2020 and has maintained a continuous growth rate until now. Out of which, rice consumption structure is as follows: 74.5% is used as food for people; 12-14% is used in animal feed industry; rice for processing industry (starch production, wine production) accounts for about 8%.
Regarding rice trade, China was previously a large rice exporting country, and rice export volume were often higher than import volume. However, a few years after China became a member of World Trade Organization (WTO) (in 2001), China's rice exports gradually decreased and conversely, imports increased more than exports. But in recent years, China's rice exports have gradually increased again.
To protect domestic rice production, China has also issued tariff quota management measures for a number of agricultural products, including rice. Since then, quotas for Chinese rice products have been limited. China still maintains at 5.32 million tonnes/year.
Since 2012, according to a data from China Customs, although with a quota of 5.32 million tonnes, up to now, there was no year has exceeding import quota. However, in 2022, imports of China exceeded its quota and reached 6.19 million tonnes.
But entering 2023, China's rice imports fluctuated very strongly, reaching only 2.63 million tonnes, down 75% in quantity and 45.8% in turnover compared to 2022.
Analyzing cause of this sudden decrease, Mr. Nong Duc Lai said, firstly, it is due to exchange rate difference between the Yuan and the US dollar. Second, due to impact of some policies restricting food exports in general and rice exports of some countries including India, China's rice imports have been affected. Because India is one of China's major rice export partners. In 2022, India's rice exports to Chinese market account for nearly two-thirds of the country's total rice imports.
Third, proportion of imported broken rice to replace some raw materials such as corn and wheat used in animal feed production has returned to normal levels.
"Normally, every year, proportion of broken rice imports in China's rice imports accounts for about 30%. However, in 2021 and 2022, proportion increases to more than 50% and even nearly 60%", said Mr. Nong Duc Lai.
Fourth, world rice prices increased in the past year, which makes price difference between China's rice and the outside world not attractive enough for importers.
And recommendations for Vietnamese businesses
It is forecast that in 2024, Chinese market's rice import signals are very positive and tend to increase again due to many factors.
Firstly, it comes from domestic market itself, because in past 3 years, China's rice growing area has continuously decreased below 30 million hectares. In 2023, it was just over 28 million hectares. Rice output has also decreased continuously in the past 2 years, while consumer demand is forecast to maintain a slight increase (about 150 million or over 150 million tonnes of rice).
Second, last year, issue of food security was taken very seriously by the Chinese Government, always emphasized in conferences and there were even separate conferences discussing this issue.
7th session of Standing Committee of XIV Chinese National Assembly at the end of 2023 passed new food security law, expected to take effect from June 1, 2024. This is an important national move by China in ensuring a stable supply of grain and related products, enhancing food security in face of instability in external market. Therefore, China will maintain reasonable rice imports to ensure compensation for domestic rice shortages.
External factors, impact of India's rice export restriction policy as well as disruption of supply chain due to geopolitical impacts and increased transportation costs, will make China is looking for rice supply markets in Southeast Asia.
To increase opportunities to export rice to Chinese market, Mr. Nong Duc Lai recommends that enterprises closely follow and update market information, promptly grasp the latest moves of importing country's market and respond promptly and seize opportunities. At the same time, promoting and diversifying trade promotion to penetrate potential areas of the country to expand exports in this billion-people market.
“Previously, Beijing city’s import from Vietnam accounted for a very low proportion, in 2022, it was less than 10%. However, by 2023, this number has increased to 33%. In 2023, Beijing imported more than 370 million USD of rice. Out of which, imports from Vietnam reached 122 million USD. This is the reason why we can research and penetrate potential markets such as Beijing, or some markets in the Southwest region", Mr. Nong Duc Lai shared.
Besides, it is necessary to promote and take advantage of Vietnam's advantages in Chinese market. Because in recent years, we have established good traditional customer relationships with this market. At the same time, maintain proportion of Vietnamese rice in total imports of Chinese market. In terms of turnover proportion, on average, in the past 10 years, proportion of Vietnamese rice in China's total imports has been 36 - 37%. This is a quite high number compared to other countries exporting to this market.
“Aromatic rice, premium rice and ST rice are popular rice lines in Chinese market, so enterprises also need to maintain, promote and expand, thereby building trade brand for Vietnamese rice products in the Chinese market", Mr. Nong Duc Lai emphasized.

Source: Vitic/ congthuong.vn