Agriculture

Explained: Why is China importing rice from India for the first time in decades?

Updated : December 17, 2020 08:42 PM IST

In 2019, India ranked ninth among the fourteen countries that supplied rice to China.

China avoids buying rice from India, citing quality issues. It has been importing from countries like Pakistan, Thailand, Vietnam, and Myanmar.

China has started importing rice from India for the first time in three decades, reported Reuters early in December. While Beijing imports some 4 million tonne of rice annually, it has avoided purchasing from India. In 2019, India ranked ninth among the fourteen countries that supplied rice to China.

Why it matters: For two-thirds of people living in China, rice is the staple food. However, the country is running out of rice, and they are looking at India to meet this demand.

The reports came as the political tensions between the two neighbours have worsened in the past year due to border disputes.

Driving the news: China avoids buying rice from India, citing quality issues. It has been importing from countries like Pakistan, Thailand, Vietnam and Myanmar. However, this year, due to limited supply and increased prices (as much as $30 per tonne), China started looking elsewhere.

"For the first time, China has made rice purchases. They may increase buying next year seeing the quality of Indian crops," said BV Krishna Rao, president of the Rice Exporters Association.

By the numbers: Between December to February, the Chinese traders exported some 100,000 tonne of rice at $300 per tonne - the cheapest in the global market.

India has recorded a rise in rice exports in the current fiscal. During April-October, India exported 2.8 million basmati rice and 6.1 million tonne non-basmati rice. In 2019-20, total basmati exports were 4 million tonne, while non-basmati exports stood at 5 million tonne.

Why the move: The rice crops, crops in general, suffered attacks one after the another. Trade stalled due to the COVID-19 restrictions. Then in July 2020, swathes of regions along Yangtze River basin were battered by floods, destroying some 13 million acres of agricultural land. The locust attacks did not make the situation better for the remaining farms.

Then the pigs of the country suffered from deadly African Flu, leading to a shortage of porks. While pork has nothing to do with rice, it is another staple food in China. It led to the price of pork rising to almost 135 percent in February. The National Bureau of Statistics of China reported that on average the food prices had seen an 11.2 percent hike y-o-y.

China wasted roughly 17 to 18 million tonne of food between 2013 to 2015, enough to feed 30 to 50 million people. This prompted president Xi Jinping to launch a 'clean plate' campaign to encourage Chinese people to stop wasting food.

Amid rising food prices, this campaign started raising doubts on whether the country was facing a food crisis.

While the Chinese leaders, including president vehemently denied food shortages, Beijing has launched a global hunt for grains. China's imports of barley, corn, sorghum, and wheat have risen by more than 83 percent.

Another fundamental issue: China has the daunting task of feeding 22 percent of the world's population with 7 percent of arable land.

China's consistent steps towards urbanisation and industrialisation have cost it 37 million acres out of 334 million acres of arable land. As a solution to this problem, the country is buying and leasing fertile lands in African, ASEAN, and South American countries.

Explained: Why is China importing rice from India for the first time in decades?

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