Poor rice sales drag paddy prices lower

Recently, prices in some indica rice-producing areas in southern China have been steady to lower under the influence of many factors. Among them, poor rice sales are one of the important reasons for the decline in paddy prices. Entering the second quarter, sales in the domestic rice market were lower than in the first quarter, and the southern market was also squeezed by imported rice, so enthusiasm for purchasing paddy for processing and trading was relatively low. The indica rice market is expected to remain weak in the later period.

In southern indica rice-producing areas, mid-late rice prices have been steady to declining; as of May 6, mid-late rice and rice prices in southern indica rice-producing areas were generally stable, with slight declines in some areas. Monitoring shows that in Yichun, Jiangxi, the purchase price of ordinary late indica rice was 1.40 yuan/jin, down 0.02-0.03 yuan/jin from before the holiday, and the purchase price of Huanghuazhan was 1.52-1.55 yuan/jin, down 0.04 yuan/jin from before the holiday; in Yueyang, Hunan, the purchase price of mid-late rice was 1.40-1.43 yuan/jin, flat with before the holiday.

Recently, the relevant national departments announced the purchase situation of mid-late rice produced in 2014. As of March 31, various grain enterprises in 14 major mid-late indica rice-producing areas including Hubei and Anhui had purchased a cumulative total of 28.21 million tons of newly produced mid-late indica rice, a year-on-year decrease of 1.52 million tons; various grain enterprises in 7 major japonica rice-producing areas including Heilongjiang and Jiangsu had purchased a cumulative total of 39.84 million tons of newly produced japonica rice, a year-on-year increase of 6.82 million tons.

The transaction ratio of policy-based paddy purchases remains relatively low; in mid-April, policy-based paddy auctions restarted, but compared with the total purchase volume of mid-late rice, transactions remained relatively low. Statistics show that from May last year to now, the total transaction volume of the three types of paddy was 6.33 million tons, of which early rice transactions were 810,000 tons, mid-late rice transactions were 3.28 million tons, and japonica rice transactions were 2.24 million tons. In recent years, the policy-based paddy purchase volume is expected to exceed 70 million tons.