We are not being nosy here. Even while the world is going through a period of abundance of rice crops, the state of China’s rice production is a big deal for the rest of the planet in the long term, with a significant bearing on future food security.
And because rice is a staple, the amount of it that is available, and its price, quickly becomes a political issue.
In 2011, China imported around half-a-million tonnes of rice. And now, just two harvest years later, the total is now estimated to be 2m tonnes¾a four-fold increase.
At the same time, the country is ramping up its own rice stock through domestic production driven by the government’s policy to support paddy prices by a decent peg above the market rate.
Ever wary of food security in the world’s most populous nation, Beijing is suspected of stockpiling its produce. But this is just a theory because nobody has a real idea--and not even the agencies charged with knowing such things with some degree of authority.
The two most prominent food organisations haven’t a clue. Indeed, you could drive a rice-laden freighter through the gap between the figures of the US Department of Agriculture and the UN Food and Agriculture Organisation on where China stands in terms of rice stock.
For example, assuming China consumed around 140m tonnes a year, the USDA would estimate a stocks-to-use ratio equivalent to 32%, whereas the FAO would come up with 67%. Either way, and ignoring the gulf in difference, this relates to a global stocks-to-use ratio figure of around 20-30% this year.
Rice ending stocks this harvest year expected to be over 105m tonnes, according to the USDA, but this figure is a massive 66m tonnes below that of the FAO, which is just below 173m tonnes.
This compares to a divergence of around 20m tonnes in estimates by the agencies in ending global stocks just 10 years ago.
Indeed, the relative difference between the databanks of the FAO and the USDA in terms of global inventory estimates is around the equivalent of twice the global annual rice trade. And this is in spite of demands by the G8 nations to share agricultural data as a means to improving food security.
And once again the buck stops with China. For China’s needs to be accommodated by the global rice industry investments in production, the country must let the market know who much it needs, even if this only comes in the form of a hint.
While it hovers in the clouds of opacity, the nation is no doubt watching to see how much further Asian rice prices will drop on the back of swelling supplies. But nobody wants prices to stay too low for too long lest production suffers and fails to keep up with rising demand. This is why China must start to indicate believable stocks statistics to help the USDA and FAO give a real assessment of the state of play. And it must do so soon before the world’s rice supplies have given way to demand.