Emmetts Blog

China now allowing importation of US Rice, a look at Australian rice production and export

Reuters reported in the commodities section today that for the first time, China has now agreed to accept the importation of US rice. China is the largest market for rice in the world, with the population consuming the entire years production of US rice crop in 13 days (Reuters 2017).

With China importing approximately 5 million tonnes of rice a year, this is a close market for Australian rice production. Currently the Ricegrowers' Association believes the Australian Rice Industry has the capacity to produce more than 1 million tonnes of rice per year.

With Australian rice production increasing, our neighbours with a high consumption of rice and favourable trade agreements will naturally be our trade targets.  Currently the China Australia Free Trade Agreement (ChFTA) which came into effect in December 2015 has reduced trade barriers with Australian produce.  However, rice is listed under the WTO quota accession protocal which applies in-tarrif quotas of 1% to rice, wool, cotton, wheat and maize.  China has committed to reveiw these quotas and market access three years after the agreement was entered into force, which I calculate to be Decemer 2018. Details on this can be found at the dfat website, link below. 

 

 Rice Screen Shot.jpg

In 2010-2011 65,000 tonnes of rice were exported at a value of $61 million dollars (National Farmers' Federation 2017).  IBISWorld identified rice as one of Australia's top five export growth areas as it has increased at an annualized 29.5% over the past five years.  IBISWorld reports that by 2020-2021 the value of rice exports is anticipated to be $468.1 million up from $380.7 million in 2015-2016 (IBISWorld 2016).

With new varieties being bred to maximize water use efficiency, and with Australia already producing rice with approximately 50% less water than the global average Australian rice production may further increase as a star commodity in some production systems.

References:

Image from: http://www.planthealthaustralia.com.au/industries/rice/ 21 July 2017.

Ricegrowers' Association. <http://www.rga.org.au/the-rice-industry.aspx> 21 July 2017.

 

Hirtz M. Reutrs "China agrees to allow imports of US rice for the first time" 21 July 2017. <http://www.reuters.com/article/us-usa-china-rice-idUSKBN1A523V> 21 July 2017.

National Farmers' Federation, http://www.nff.org.au/commodities-rice.html, 21 July 2017.

IBISWorld, "Exceptional Exporters; IBISWorld reveals nations top 20 industries by growth in exports", 6 June 2016.  <https://www.ibisworld.com.au/media/2016/06/06/exceptional-exporters-ibisworld-reveals-nations-top-20-industries-by-growth-in-exports/> 21July 2017.

AusTrade, Australian Trade and Inevestment Commision, Food and Beverage to China. <https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/China/Industries/Food-and-beverage> 21 July 2017.

China-Australia Free Trade Agreement Factsheet: Agriculture and Processed Food, 20 December 2016. <https://dfat.gov.au/trade/agreements/.../fact-sheet-agriculture-and-processed-food.pdf> 21 July 2017

Topics: Industry News, Broadacre Cropping

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