Industry View: Japonica Rice Auction Subsidies Stimulate Higher Transaction Rates

The auction subsidy amount in Heilongjiang Province was upgraded from 100 yuan/ton announced on April 17 to 200 yuan/ton on June 12. The subsidy recipients are 102 rice mills in Heilongjiang with a production capacity of over 100,000 tons. According to monitoring, affected by this policy, the transaction volume of state reserve japonica rice auctions increased throughout July, with five japonica rice auctions concluding a total transaction of 474,000 tons. Large rice mills lowered their ex-factory quotes for 2014 round-grain rice to the current 2.16-2.20 yuan/jin, a monthly reduction of around 0.03 yuan/jin. Small rice mills, hit hard, have successively suspended production. Amid reduced supply, large rice mills saw faster shipments in July. Stimulated by the auction subsidy policy, the number of large rice mills participating in bidding has increased, and round-grain rice prices may face the risk of continued decline in the later period.