Early indica rice prices slide, yet 2014 mid- and late-season rice transaction volume climbs

From June 26 to July 2, the 2013 government-supported early indica rice auction in Hubei Province saw zero transactions, while the auction of 2012-produced early indica rice from local reserves showed a downward price trend, with the June average transaction price having fallen from 2,380 yuan/ton in January to 2,158 yuan/ton, a drop of 9.3%. Purchase prices for 2014-produced early indica rice in various regions also ran below the government support price, with the average purchase price of ordinary early indica rice in Wuhan, Jingzhou, Xianning and Huanggang ranging from 1.25-1.29 yuan/jin, and the average purchase price of high-quality early indica rice at 1.32-1.35 yuan/jin. In contrast to the sluggish early indica rice market, the 2014-produced government-supported mid- and late-season indica rice in Hubei Province saw active transactions. On June 30, Wuhan planned to sell 200,944 tons of 2014 mid- and late-season indica rice, with an actual transaction volume of 122,323 tons, a transaction rate of 60.87%, and an average transaction price of 2,813 yuan/ton.

Although the transaction rate declined somewhat as the volume offered multiplied, the actual transaction volume climbed sharply. The main reason is that high-quality mid- and late-season indica rice stores less well than ordinary indica rice and loses nutrients faster, so the 2014-produced mid- and late-season indica rice that Hubei Province initially put on the market contained a relatively large proportion of high-quality varieties. In addition, the circulation of high-quality grain on the market was in short supply and demand was strong, so it was sought after by the market, and some high-quality indica rice even flowed out of the province through traders.