China's rice prices will run at a high level this year

Peng Chao, a senior market analyst at the Rural Economy Research Center of the Ministry of Agriculture, said recently in Harbin that, affected by the national minimum purchase price policy for rice, China's paddy rice market has generally shown a steady slight increase since the beginning of the year, and it is expected that rice prices this year will overall be somewhat higher than last year, operating steadily at a high level.

Speaking at the 2014 Heilongjiang Autumn Agricultural Products Production and Marketing Matchmaking and Market Situation Analysis Conference held there, Peng Chao said that the price of early indica rice in China's main producing areas has risen from 1.28 yuan per jin in January to 1.34 yuan in August, the price of late rice has remained at 1.35-1.36 yuan per jin, and the price of japonica rice has risen from 1.49 yuan per jin at the beginning of the year to 1.53 yuan per jin in August.

Peng Chao believes that the main reason for the rise in rice prices is that the state raised the minimum purchase price for rice in 2014. The minimum purchase prices for early indica rice, mid-to-late indica rice and japonica rice produced in 2014 were raised to 135 yuan, 138 yuan and 155 yuan per 50 kg respectively, an increase of 3-5 yuan compared with 2013.

The first reduction in early indica rice output after “three consecutive increases” also had an impact on rice prices. Statistics show that this year's national early rice sown area was 86.925 million mu, a decrease of 141,000 mu compared with 2013, down 0.2%, and early rice output also declined somewhat.

“Japonica rice has good grain quality and taste, and market demand has increased, which helps raise japonica rice prices.” Peng Chao expects that the domestic paddy rice market will remain firm this year. However, affected by factors such as large indica rice inventories in the south, relatively low international rice market prices and an increase in import volumes, the possibility of market fluctuations cannot be ruled out.