* 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
"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
has fallen 14 percent from its 2012 peak, with the market on
track for a third consecutive month of decline. The 100 percent
B grade Thai white rice is trading about 10
percent below last year's high.
At the same time, long-grain milled rice in
China's largest growing province of Hunan was quoted at a record
3,820 yuan per tonne in December, up 6 percent from the
beginning of the year. China's rice prices rose in 2012 for a
third year in a row.
China's imports have triggered a rush among top exporters to
corner a share of the 140 million tonnes the nation consumes
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
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
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)