Chinese rice imports affect local production

The surging imports have impacted China's local rice production chain, forcing farmers and processors to lower prices. Some experts are now warning that this will discourage farm production in the long run.

In Guigang, a major rice production base in South China, farmers who were expecting higher paddy prices have to face a disappointment.

"I have kept my harvest, as I thought paddy prices would go up. But they haven't so far. So I can do nothing but sell them," said a rice farmer.

Down the rice production chain, processors are also struggling with thinner profit margins. They say the processed rice cannot be priced high, as they face competition from the rising rice imports.

Rice processor Tan Shuicai said, "As farm produce processing is a low profit industry in itself. Now imported rice is even cheaper than our paddy purchase prices. Our profits have shrunk by 10 percent."

Industry insiders say China's domestic rice prices have exceeded global levels since 2011, giving importers a price edge over domestic producers. Smaller processors are the hardest hit, with some players even forced to halt production.

Local grain authorities say rice price movements are within reasonable levels. Some experts warn that while lower rice prices benefit consumers in the short term, they could potentially discourage local rice production in the long run.