|Chennai||Rs. 24470.00 (1.37%)|
|Mumbai||Rs. 24900.00 (0.97%)|
|Delhi||Rs. 24200.00 (1.26%)|
|Kolkata||Rs. 24160.00 (0%)|
|Kerala||Rs. 24000.00 (0.63%)|
|Bangalore||Rs. 23800.00 (0%)|
|Hyderabad||Rs. 24140.00 (1.17%)|
* China seen buying around 2.0 mln T of rice in 2013
* Lower global prices to drive China's rice imports
* Chinese buying to put floor under global market
* China eyes 5 pct broken rice from Vietnam, Pakistan
By Naveen Thukral
SINGAPORE, Jan 21 (Reuters) - Chinese demand looks likely to act as a partial safety valve for an amply supplied rice market for a second year running, as the world's top consumer of the grain takes advantage of global prices around 25-30 percent below record domestic levels.
Still, Chinese demand looks unlikely to bail out Thailand - where a government rice buying scheme has built up stocks equal to half of global annual trade - as cheaper Vietnamese and Pakistani grain snatch the lion's share of business.
China's rice imports jumped five-fold in 2012 to 2.6 million tonnes, making it the world's second largest buyer after Nigeria. While it might import a bit less this year, the country will still tap bumper global supplies to ease record-high domestic prices and top up stockpiles.
Global rice prices, which have fallen on Thai stocks and India's booming exports, could find a floor on the back of this demand.
"Domestic prices are high so there is motivation for trading companies to increase imports," said an analyst with official think-tank China National Grain and Oils Information Centre (CNGOIC). "Bumper rice harvests in most Asian countries will keep global rice prices far below domestic prices."
The price of 5 percent broken rice in Vietnam
At the same time, long-grain milled rice
China's imports have triggered a rush among top exporters to corner a share of the 140 million tonnes the nation consumes annually.
The CNGOIC forecasts China's rice imports in 2012/13 at 2 million tonnes, down from 2.85 million tonnes shipped a year earlier but enough keep the nation among top importers in the world.
Last year the market was dominated by Vietnam and Pakistan, and the two look likely to emerge on top again this year.
China bought around 2 million tonnes of Vietnamese rice in 2012, a surge of more than six-fold from around 310,000 tonnes in 2011, according to Vietnam Customs data. The balance came from Pakistan.
Vietnamese and Pakistani 5 percent broken rice in the Chinese market is quoted around $420-$425 a tonne, including cost and freight, compared with domestic price of similar variety being offered around $600 a tonne.
China's rice imports have been in part driven by government stockpiling, traders said.
"They have been building buffers and also blending cheap foreign rice with expensive local rice to bring down the overall cost," said another Singapore-based trader.
The country's stocks jumped to 45 million tonnes in 2012, up from 42.6 million tonnes a year ago, according to the USDA.
Chinese buyers have yet to make large purchases so far this year, with most buyers waiting for a price direction from the upcoming harvest in Vietnam.
"China is checking rice prices from Vietnam and Pakistan," a Vietnamese rice exporter based in the Mekong Delta food basket said, adding that he estimated China's imports from Vietnam at around 2 million tonnes in 2013, at par with last year.
Some analyst said China could restrict imports of lower quality rice this year as it had hurt processors.
"The large volume of cheap rice from Vietnam last year hurt some middle-and-small sized rice processors, who have complained to the government," said Ma Wenfeng, an analyst with Beijing Orient Agri-business Consultant Co.
"We believe imports of low-quality rice would decline." (Additional reporting by Niu Shuping in BEIJING, Apornrath Phoonphongphiphat in BANGKOK and Ho Binh Minh in HANOI; Editing by Michael Urquhart)