China starts buying Indian rice for first time in several decades

For the first time in three decades, China has turned to Indian rice producers after exports of the cereal grain across the world dramatically declined in 2020, according to Indian industry officials cited by Reuters.

India, the world’s number-one exporter of rice, is reportedly selling rice to China at sharply discounted prices. China is a major global importer of rice, consuming around four million tons of the grain per year. However, Chinese traders formerly avoid purchases from India, citing quality issues.

“For the first time [in around 30 years], China has made rice purchases. They may increase buying next year after seeing the quality of [the] Indian crop,” the president of the All India Rice Exporters Association (AIREA) B.V. Krishna Rao said.

Indian traders have reportedly contracted to export 100,000 tons of non-basmati rice, or broken rice, for December to February shipments, at around $300 a ton on a free-on-board basis, industry officials told the agency. Broken rice is commonly used for making noodles and is necessary in the Chinese wine industry.

The move comes amid continuing political tensions between the two states because of a border dispute in the Himalayas in which 20 Indian soldiers were killed. Since then, ‘boycott China’ sentiment has spread across Indian social media, with people posting videos showing Chinese-made products being destroyed.

Earlier this year, New Delhi shortened its foreign investment policy, under which Chinese investors need state approval before they can invest in Indian firms. The move has reduced Chinese investment in Indian startups.

Thailand, Vietnam, Myanmar, and Pakistan, which used to export the cereal grain to China, have put limits on surplus supplies for export. Thailand, the world’s second-largest rice exporter and a major supplier to China, suffered a drought that could drag its shipments of rice to the lowest level in 20 years. China’s traditional suppliers also reportedly asked at least $30 per ton more than the Indian suppliers.

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