Yu Xubo,Vice President, COFCO
ABSTRACT
China is the largest rice production country in the world. As the most important food crop in China, rice already provides more than 40 percent of China’s total food production. The general situation of rice production has been rather stable in China, focusing on self-sufficiency, with some export and import for more varieties.
China began to enter into global rice trade in 1952. More than 50 years’ efforts have brought up China as the fifth country in rice export market all over the world, with annual export of more than two million tonnes and broad spectrum of varieties. China has experienced drastic output setbacks several times in its history of food production and once suffered from severe shortage in food supply. In spite of all this, by balancing the export and import, the Chinese government has overcome a great deal of difficulties and consistently pursued a steady policy of exporting quite constant amount of rice, to meet the demand of traditional markets for Chinese rice. In this way, China has made positive contribution to the global rice trade. During the seven years from 1997 to 2003, China’s average annual rice export has been in the range of 2 000 000 to 2 500 000 tonnes, accounting for approximately 10 percent of global rice trade (assumably 25 000 000 tonnes) in the corresponding period. The exported rice variety has developed from single low-grade early hsien (long grain) rice to a full range of quality-grade late hsien (long grain) rice and keng (round grain) rice. Therefore China has already played an important role in the world rice market, by adopting various and flexible trade patterns adapted to different specific conditions in the world market, and taking a vigorous part in global rice trade in a competitive and fair way.
In recent years, China’s Ministry of Agriculture as well as other line ministries and agencies vigorously encourage and support farm households to choose better rice varieties, expand the production area of quality-grade rice varieties instead of the production of early hsien (long grain) rice, which appears less favorable in food-quality.
Meanwhile, the rice processing technique has achieved great improvement in China, which has further enhanced the global competitiveness of Chinese rice and has provided greater potential for Chinese rice to make way into global high-value rice consumption markets.
In prediction for the year of 2004, China’s rice export might be adjusted downward, due to the decrease in both the output and carryover stock last year. As in the past, we will make efforts to keep certain amount of rice export, and stabilize the export to traditional markets, focusing on quality-grade rice.
On the whole, the rice production in China will be sufficient to meet the consumption demand of the population in urban and rural areas. But there still exists a certain gap between the current production and domestic potential demand of quality rice in China, which will provide a great potential for international rice trade.
China National Cereals, Oils and Foodstuffs Imp. and Exp. Corp (COFCO), the largest trade company of agriculture commodities in China, serves as both the policy-making adviser for the Chinese government in large quantity trade of agriculture commodities and the implementing agency of adjusting national food policy at macro level. For more than the past 50 years, COFCO has boasted one of the major exporter and importer in the world rice market and indeed played an important role there, with the total export and import volume amounting to 70,260 000 tonnes and the total value reaching about 14 billion U.S. dollars.
Currently, COFCO has been vigorously expanding into the field of rice fine processing, and investing in the construction of steamed rice processing factories equipped with advanced technology in the world. In the coming years, COFCO will actively participate in exploring the development of the food fine processing, further promote the production and export of Chinese quality rice varieties, and enhance the international competitiveness of Chinese rice.
The achievement of basic food self-sufficiency based upon domestic resources has been the well-established policy which China has long pursued for the solution of food supply and demand. With solid reasons and certainty, we strongly believe: with strong support of Chinese government, advanced science and technology, and inherent advantage of unique rice production, China will continuously stabilize the rice supply for the global market and provide more better quality rice to the world market, while well satisfying the domestic demand.
Yu Xubo, Vice-président, COFCO, China
RÉSUMÉ
La Chine est le premier pays de production rizicole du monde. Le riz, qui est la première denrée de base en Chine, représente déjà plus de 40 pour cent de la production vivrière totale. La production de riz a été relativement stable et s’est axée sur l’autosuffisance. Pour cela, les exportations ont été peu élevées et les importations, dont le but était d’augmenter le nombre de variétés, ont été limitées à de faibles volumes.
La Chine est entrée sur le marché mondial du riz en 1952. Plus de 50 ans d’efforts ont permis à la Chine de devenir le cinquième marché d’exportation rizicole du monde, avec plus de 2 millions de tonnes d’expéditions par an couvrant une large gamme de variétés. Au cours de son histoire, la Chine a plusieurs fois subi de fortes chutes de production vivrière et a été une fois victime d’une grave pénurie alimentaire. Malgré cela, le gouvernement chinois, en équilibrant les exportations et les importations, a surmonté de nombreuses épreuves et a toujours appliqué de manière systématique une politique d’exportation de quantités pour ainsi dire égales afin de répondre à la demande des marchés traditionnels de riz chinois. La Chine a ainsi contribué de manière positive au commerce rizicole mondial. Durant sept ans, de 1997 à 2003, les exportations de riz de la Chine ont été de l’ordre de 2 000 000 à 2 500 000 de tonnes par an, ce qui représente environ 10 pour cent des échanges internationaux de riz (estimés à 25 000 000 de tonnes) pour la même période. Les variétés de riz exportées se sont enrichies et une gamme complète de riz hsien tardif (riz long) et de riz keng (riz rond) est venue diversifier le riz hsien (riz long) de qualité inférieure, jusque là seule variété à être cultivée. En adoptant une structure des structures commerciales diverses et flexibles en fonction des conditions spécifiques du marché international et en y participant activement de manière compétitive et loyale, la Chine a donc joué un rôle de premier plan sur le marché rizicole mondial.
Durant les dernières années, le Ministère de l’agriculture chinois ainsi que d’autres ministères et organismes responsables ont fortement encouragé et aidé les ménages agricoles à choisir de meilleures variétés de riz et à accroître les superficies consacrées aux variétés de qualité au lieu du riz hsien précoce (riz long) dont la qualité nutritionnelle se révèle moins satisfaisante.
Les techniques de transformation du riz ont également beaucoup progressé en Chine. Le riz chinois est devenu encore plus compétitif sur le marché mondial et trouve dorénavant sa place sur les marchés internationaux de consommation dont la valeur économique est importante.
En prévision de l’année 2004, les exportations de riz chinois risquent d’être ajustées à la baisse, du fait d’un fléchissement tant de la production que des stocks de report l’an dernier. Comme dans le passé, la Chine s’efforcera de maintenir le volume des exportations et de stabiliser celles destinées aux marchés traditionnels, en donnant priorité au riz de qualité.
La production rizicole en Chine suffira globalement à répondre à la demande de consommation de la population dans les zones urbaines et rurales. Il existera toutefois encore un certain écart entre la production actuelle et la demande intérieure potentielle de riz de qualité en Chine, ce qui dégagera un potentiel très intéressant pour le commerce international.
La plus grande société commerciale de produits alimentaires en Chine, China National Cereals, Oils and Foodstuffs Imp. and Exp. Corp (COFCO), agit à la fois en qualité de conseiller auprès du gouvernement chinois en matière de formulation des politiques relatives à l’échange de gros volumes de produits alimentaires, et d’organisme d’exécution pour l’ajustement des politiques alimentaires nationales à l’échelon macro-économique. Depuis plus de 50 ans, COFCO est devenu l’un des plus grands importateurs et exportateurs de riz sur le marché international. Avec un volume total d’exportations et d’importations de 70 260 000 tonnes et une valeur totale proche de 14 milliards de dollars E.U., cette société a joué un rôle capital.
COFCO s’engage aujourd’hui énergiquement dans la transformation fine du riz et investit dans la construction d’installations de traitement du riz vapeur qui sont équipées avec les dernières innovations technologiques mises au point dans le monde. Dans un proche avenir, COFCO entend participer activement au développement de la transformation fine des produits alimentaires, continuer à promouvoir la production et l’exportation de variétés de riz chinois de qualité, et accroître la compétitivité.
Pour répondre au problème de l’offre et de la demande, la politique établie de longue date en Chine a été de parvenir à l’autosuffisance en produits alimentaires de base à partir des ressources nationales. Nous sommes fermement convaincus, pour des raisons bien étayées, qu’avec l’appui solide du gouvernement, les progrès scientifiques et technologiques, et l’avantage inhérent à une production rizicole unique, la Chine continuera à stabiliser l’approvisionnement en riz du marché international et à offrir des variétés de meilleure qualité tout en répondant de manière satisfaisante à la demande intérieure.
Yu Xubo,Vicepresidente, COFCO, China
RESUMEN
China es el país productor de arroz más grande del mundo. El arroz, que es el principal cultivo de China, proporciona más del 40 por ciento del total de la producción de alimentos en este país. La situación general de la producción de arroz en China ha sido más bien estable, orientada a la autosuficiencia, con cierto volumen de exportaciones e importaciones de diversas variedades.
China comenzó a ingresar en el comecio mundial del arroz en 1952. Más de 50 años de actividad han sitiuado a China en el 5º lugar de los países exportadores de arroz, con un volumen anual de exportaciones superior a 2 millones de toneladas y un surtido de variedades. China ha sufrido drásticos reveses en la producción en diversos momentos de su historia de producción de alimentos, y en una ocasión sufrió una grave escasez del suministro de alimentos. A pesar de todo esto, mediante el equilibrio de las exportaciones y las importaciones, el gobierno chino ha superado muchas dificultades y ha matenido con constancia una política de exportación de un volumen más bien constante de arroz, para satisfacer la demanda de los mercados tradicionales de arroz chino. De esta manera, China ha hecho una contribución positiva al comercio mundial de arroz. En los siete años que van de 1997 a 2003, las exportaciones medias anuales de arroz de China fueron de entre 2 millones y 2,5 millones de toneladas, que representan cerca del 10 por ciento del comercio mundial de arroz (supuestamente de 25 000 millones de toneladas) en ese período. La variedad del arroz de exportación ha evolucionado desde el arroz tipo hsien de baja calidad que se producía anteriormente (gran largo) hasta una gran variedad de arroces tipo hsien de gran calidad (grano largo) y arroz tipo keng (grano redondo). Por lo tanto, China ha desempeñado una importante función en el mercado mundial del arroz adoptando pautas comerciales diversas y flexibles adecuadas a las diversas condiciones específicas del mercado mundial, y participando enégicamente en el comercio mundial de arroz en forma competitiva y justa.
En los últimos años, el Ministerio de Agricultura de China y otros ministerios y organismos del sector alientan y apoyan vigorosamente a las familias campesinas para que escojan mejores variedades de arroz, y amplíen la superficie dedicada a la producción de variedades de arroz de buena calidad en vez del antiguo arroz hsien (grano largo), que es de menor calidad alimentaria.
Mientras tanto, la técnica de elaboración del arroz mejoró mucho en China, lo que incrementó considerablemente la competitividad mundial del arroz chino y le dio la posibilidad de participar en los mercados mundiales de consumo de arroz de elevado valor.
En los pronósticos para 2004, las exportaciones de arroz de China podrían ajustarse a la baja debido a la disminución de la producción y a los remanentes traspasados del año anterior. Como en el pasado, se hará todo lo posible por mantener ciertas exportaciones y estabilizar las exportaciones a los mercados tradicionales, principalmente de arroz de buena calidad.
En conjunto, la producción de arroz en China será suficiente para satisfacer la demanda de la población urbana y rural. Pero sigue habiendo una diferencia entre la producción actual y la posible demanda interna de arroz de buena calidad en China, que le dará un gran potencial al comercio internacional de arroz.
China National Cereals, Oils and Foodstuffs Imp. and Exp. Corp (COFCO), la empresa de comercio de productos agrícolas más grande de China, es a la vez asesora del gobierno chino en materia de políticas para el comercio a gran escala de productos agrícolas, y organismo de ejecución del ajuste de la política alimentaria a nivel macro. Desde hace más de 50 años, COFCO es uno de los principales exportadores e importadores en el mercado mundial del arroz, donde ha desempeñado una importante, con un volumen total de exportaciones e importaciones que asciende a 70 260 millones de toneladas, y un valor total que ronda los 14 000 millones de dólares EE.UU.
Actualmente COFCO está ampliando su participación en la elaboración fina del arroz, e invirtiendo en construcción de fábricas de arroz elaborado al vapor, equipadas con tecnología avanzada en el mundo. En los próximos años COFCO participará activamente en la investigación de la elaboración fina de los alimentos, promoverá aún más la producción y exportación de las variedades de arroz chinas de calidad, e incrementará la competitividad internacional del arroz chino.
Lograr la autosuficiencia alimentaria básica con base en los recursos del país ha sido la politica bien establecida que China lleva a cabo desde hace mucho tiempo para resolver la oferta y la demanda de alimentos. Con sólidos motivos y seguridad, creemos con firmeza que con el firme apoyo del gobierno de China, la ciencia y la tecnología, y la ventaja inherente de una producción incomparable de arroz, China seguirá estabilizando la oferta de arroz en el mercdo mundial y proporcionará un arroz de mucha mejor calidad al mercado mundial, a la vez que satisfará la demanda interna.
Yu Xubo,Vice-President, COFCO, China
First I would like to thank the FAO for arranging COFCO to attend this rice conference for the International Year of Rice. Since its founding in 1952, China National Cereals, Oils and Foodstuffs Import and Export Corporation, better known as COFCO, has been engaged in the rice trade as a government-licensed agency for state trading. Today I feel much honored to represent COFCO and to be here with all of you to exchange information on the issue of world rice. Next, I would give you a brief introduction on China’s rice trade.
China’s rice production has remained stable in general, featuring basic self-sufficiency supplemented by regulation of individual variety supply and demand through export and import. China’s rice trade dated back to 1952, the main purpose of which was to earn foreign exchange to import other grains like wheat. The volume then was only about 360 000 tonnes and only long grain early crop was exported, to such markets as Cuba, North Korea, Sri-Lanka and the former Soviet Union. Now China has become one of the world’s top five rice exporting countries, with an annual export volume of over 2 million tonnes and covering the full range of varieties. For 2003, China exported a total of 2.62 million tonnes of rice, accounting for over 10 percent of last year’s world rice trade. Varieties for export included round grain rice and long grain rice, with the former mainly to Japan, South Korea, the Middle East, Eastern Europe, and South Pacific Island states, and the latter mainly to Africa, Southeast Asia and some American countries.
Despite the output drop caused by numerous domestic natural disasters and the consequent severe domestic grain short supply for a period of time throughout the past five decades, the Chinese government has been able to overcome difficulties and has, through adjusting its foreign trade, managed to stick to its stable rice export policy and to maintain relatively stable export quantities to meet the demand from traditional markets for Chinese rice, thus contributing to world rice trade in an active and effective manner.
Before the 1990’s, China’s rice export averaged 1.065 million tonnes annually, accounting for 8-10 percent of the world trade volume (10-13 million tonnes), with long grain early crop as the main variety. After the 1990’s, and especially since 1997, with vigorous government support, Chinese farmers have developed greater interest in planting crops, and China has experienced consecutive bumper harvests and ample government stock. An oversupply of grains lasted for a period, which has led China to increase rice export by a large margin. From 1997 to 2003, China’s annual rice export averaged 2 to 2.5 million tonnes, accounting for about 10 percent of the world rice trade (25 million tonnes). The varieties for export also developed from low-grade long grain early crop to long grain late crop and round grain of specifications in full range. Flexible and various trading modes have been taken according to specific international market situation to help us more actively participate in world rice trade on a level playing field, thus allowing us to play an important part in world trade.
For instance, Japan suffered a 24 percent drop in its rice output in 1993 due to a cool summer, and needed to buy 2.4 million tonnes of rice. It is known that the Japanese consumers only like round grain rice of high quality, and only China, US and Australia export such rice. Supply from US and Australia could merely satisfy 30 to 40 percent of the Japanese demand, and the difference had therefore to be made up by China. Unfortunately, however, China happened to suffer from lower output and grain price hikes that year. In spite of this, China overcame its own difficulties, and exported 1.07 million tonnes of round grain quality rice from Northeastern China for the year 1993/1994, accounting for 45 percent of the Japanese rice import for that year.
In 1998, two other major rice importers, Indonesia and the Philippines, experienced rice short supply at the same time, and therefore needed to import about 8 million tonnes, thus leading to a seriously tight international market and causing the prices of long grain 25 percent brokens to go up sharply from 220 US$/ton FOB to 280 US$/ton FOB. China reappeared on the stage of international rice at this critical moment. In 1998, China overcame the negative impact of the floods of the century that devastated a number of its provinces and supplied 3.74 million tonnes of rice to the international market. China exported a total of 2.7 million tonnes to Indonesia and the Philippines in 1998, making up the demand deficiency of the two countries in time, and also greatly easing the international shortage. It has led to many people in the trade to exclaim that if China had not exported rice in large quantities that year, there might have been a panic striking the international market and rice prices could have shot up to 500 US$/ton FOB.
Since 1999, China has been committed to tapping the rice market in Africa. During the recent years, China exported 1 to 1.5 million tonnes of quality but fair-value rice annually to Africa. Rice from China is popular and well regarded there due to its particular characteristic of swelling(after cooking it can get more rice than other origins), thus meeting the demand of low-income groups for grains, enlarging the consumption of rice to some extent and expanding world trade volume as a whole.
In recent years, China’s rice output has remained relatively stable with slight declines, but as rice growing in some other major Asian rice producing countries outpaced the population growth, an oversupply began to hit the international market. The plummeting of international rice prices severely hurt the interests of farmers in major rice exporting countries, as well as their enthusiasm for planting crops. Against this backdrop, the Chinese government began to guide farmers in readjusting the crop varieties, expanding planting area of premium rice, and cutting down on the acreage of long grain early crop of poorer food quality. In 2003 for example, the total acreage of early crop was 5.577 million hectares nationwide, 5 percent less than the previous year, declining to one-fifth in its share of the nation’s total rice planting area of the year. In contrast, planting area for premium early crop exceeded 4.5 million hectares, up 9 percent on the previous year, with its share in total early crop acreage of the year higher by 10 percent to reach 80 percent. The shortage of premium rice in the domestic market was alleviated.
Meanwhile, with the fast growth of the Chinese economy and the constant rise in the living standards of its general population, rice-processing technology has made great strides forward under the generous support of the government. Firstly, processing quality has been improved on a constant basis, with higher milling degree and development of more customer-pack refined rice, including nutrition-rich rice and washing-free rice. Secondly, down-stream processing and integrated utilization have been moving forward, with the launch of various higher value-added products such as the development and utilization of oryzanol, vitamin E, inositol, dietary fiber from rice etc. Thirdly, new and high technology is being increasingly used in grain processing, including low-temperature drying, selection of cargo rice, rice grading and blending. The improvement in the output of China’s premium rice and the constant progress in rice processing technology have been conducive to enhancing the international competitiveness of rice from China, and make it possible for China’s rice to advance to the international premium-price rice consumer market in the future.
Because of the adjustment of crop variety in planting and weather reasons in growing regions, the total grain output in 2003 was lower than the previous year. Recently, China’s domestic grain prices began to pick up, but there will be no major fluctuations. In our view, as oversupply in the grain market is eased, it is only logical and normal for the hitherto consistently low prices of grains to regain lost ground in the market. Price rises will in turn greatly encourage farmers to plant more, and as a result planting area and output can be pretty rapidly restored to better levels within a relatively short period of time. Therefore, we think there is a limit to the room for domestic grain prices including rice prices to move further up.
Looking ahead at 2004, due to lower output and lower stock of last year, China’s rice export quantity may be smaller, but like in the past, we will maintain a reasonable export level, hold steady to traditional markets, and focus on premium rice in terms of variety.
As for import, China is the world’s largest rice consumer, with 60 percent of its population or more than 700 million people living on rice as their staple food. Although rice constitutes China’s first largest grain, accounting for over 40 percent of the country’s total grain output and being able to meet the general demand of its people in terms of aggregate quantity, there is still a gap between our own current production and the potential demand of domestic consumers for premium rice, which provides considerable space for international rice trade.
As China’s largest trading company of agricultural commodities, COFCO plays the dual role of policy counsel for the government on agricultural issues and executing agency of the country’s grain policies. During the past 5 decades, COFCO, as one of the key suppliers and customers, has made many friends and established extensive sales network and purchasing channels, has been faithfully honoring its contracts regardless of market changes, enjoying high prestige from overseas customers as a successful rice trader and an important player on the stage of international rice market. During the past 52 years, COFCO has exported and imported a total of 70.53 million tonnes of rice on an accumulative basis, at a total trade value approximating 14 billion US$. COFCO has, through its relentless efforts in half a century, established an excellent brand name and image for Chinese rice in the international market place.
COFCO has in recent years transformed itself from a trade-only company into a trans-national conglomerate covering grain purchasing, processing and marketing. It is actively moving into the rice down-stream processing business by investing in state-of-the-art rice processing plants. One of these projects is China’s first par-boiled rice plant, COFCO’s joint venture with Jiangxi, one of the major rice-producing provinces, to respond to international demand for par-boiled rice. This plant is expected to go into operation in May 2004. It will help raise the technological level in this sector, enhance the value-added of the products, overcome the traditional defects in long grain rice processing such as high rate of broken kernels and low finishing ratio, thus opening new way for China’s rice export. In the meantime, through this project we can help absorb the paddy rice grown in the 6 000 villages in the surrounding area, which will bring in steady and higher income for the 250 000 farmers in this otherwise poor region. This par-boiled rice plant marks only the first step in COFCO’s venture into the grain down-stream processing area. In the coming years, COFCO will continue to pursue opportunities in these fields to improve production and export of premium rice, and to enhance the international competitiveness of Chinese rice.
It is China’s established policy to address its grain supply and demand issue by mainly relying on domestic resources and achieving basic self-sufficiency. We have every reason to believe that with support from the government, by adopting advanced technologies, and taking advantage of China’s natural endowments for growing rice, China can not only meet it own domestic demand, but also provide stable rice supply to the international market and deliver more and better varieties to our international consumers. We sincerely hope that in our future development we can work more closely together as we have always done with our dear colleagues in the world’s rice community. Let us join hands and efforts to advance the prosperous development of world rice trade and to enable rice benefit more people.
