Why are China buying rice from Thailand?

[bizzle]

This might be a very basic question but why would a country like China, which I'm guessing (based on past presumption )has huge amounts of rice, buy rice from Thailand?

http://www.mcot.net/site/content?id=5316ef41be0470228b8b4593#.VDD6HLddaSN

Why would they do this?

[Costas2008]

Because they need more rice?

Don't forget it's a huge country......many people to feed.

[KittenKong]

Because Thailand has a vast stockpile (thanks to the absurd minimum-price scheme for rice producers) that it cant use and must get rid of before it rots.

So China picks it up on the cheap.

[bizzle]

Because Thailand has a vast stockpile (thanks to the absurd minimum-price scheme for rice producers) that it cant use and must get rid of before it rots.

So China picks it up on the cheap.

Right ok thanks

So it would be cheaper for china to buy the stockpile rather than producing this amount themselves? Why would they buy cheap rice, obviously for a profit but coming back to the buying country being China , surely they have enough...? Or would they export it in smaller amounts to other countries..?

[Anthony5]

I'm sure the OP could have also done a simple google, and got the same result as me, instead of wasting server space.

http://reliefweb.int/report/china/china-world%E2%80%99s-largest-rice-importer-regional-implications

China as the World’s Largest Rice Importer: Edited October 5, 2014 by Anthony5

[sandyf]

Because Thailand has a vast stockpile (thanks to the absurd minimum-price scheme for rice producers) that it cant use and must get rid of before it rots.

So China picks it up on the cheap.

Right ok thanks

So it would be cheaper for china to buy the stockpile rather than producing this amount themselves? Why would they buy cheap rice, obviously for a profit but coming back to the buying country being China , surely they have enough...? Or would they export it in smaller amounts to other countries..?

China cannot grow enough, they have always been an importer of rice. The 3 main exporters are Vietnam, Thailand and the US, and for obvious reasons Vietnam has been the main supplier. The Thai stockpile has been a major concern to Vietnam for some time with the potential to bring down market prices.

[bizzle]

Because Thailand has a vast stockpile (thanks to the absurd minimum-price scheme for rice producers) that it cant use and must get rid of before it rots.

So China picks it up on the cheap.

Right ok thanks

So it would be cheaper for china to buy the stockpile rather than producing this amount themselves? Why would they buy cheap rice, obviously for a profit but coming back to the buying country being China , surely they have enough...? Or would they export it in smaller amounts to other countries..?

China cannot grow enough, they have always been an importer of rice. The 3 main exporters are Vietnam, Thailand and the US, and for obvious reasons Vietnam has been the main supplier. The Thai stockpile has been a major concern to Vietnam for some time with the potential to bring down market prices.

Thanks for your reply

I'm guessing the obvious reason being that it borders it or are there others ?

Does this deal affect the US at all? I'm a bit of a novice so am really getting to grips with things..

[spiritrace]

Quality. The Chinese know the difference from one rice to another. They love Jasmine rice.

[xen]

Balance of Trade.

[Estrada]

Most important reason is that China wants to build the High Speed Railways.

[DonaldBattles]

If we only knew what the real deal was on the trains and highways we might understand the rice secrets. In the meantime, better to forget because it might be many years before we know.

[Andyfez]

If you go to China you'll see Thai rice in all the supermarkets.

It's generally considered the highest quality rice.

Bear in mind that Chinese do not trust the quality of their own products, with dubious chemicals and growth hormones being thrown into those products by ignorant but optimistic local farmers you never know what you're eating (in their eyes).

Edited October 6, 2014 by Andyfez

[BudRight]

Presumably they are going to eat it.

[rickirs]

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Because Thailand has a vast stockpile (thanks to the absurd minimum-price scheme for rice producers) that it cant use and must get rid of before it rots.

So China picks it up on the cheap.

Stocked Thai rice was never intended for domestic use but for export. The Thai rice stockpile was created by a rice pledge program wherein the government purchased the rice from the farmers at a set price, stored it until sold at auctions or through rice contracts. The purpose was to stablize rice production and provide a steady income stream of revenues to the farmers. This was not an original idea.

One of the measures that China uses to incentivize rice production is to guarantee rice farmers a minimum price for rice. If prices drop below that floor, the government purchases it at the guarantee price (even if above world market price) and stores it, after which the rice may be sold at auction. Unfortunately for the Yingluck administration, it was prevented by the constitution from borrowing funds to pay the farmers back when its purchase price rose above the world market price. China having an unelected dictoral regime does not have such constraints. Similarily, the Thai Junta after its overthrow of the Yingluck regime suspended the constitution and borrowed government funds to pay the farmers.

[asdecas]

China does not have enough suitable land to feed its vast population. The problem is exacerbated by a growing middle class demanding more meat, which in turn requires more land given over to pasture for animals. This is why China has been leasing land in Ukraine and Brazil, inter alia.

China has not been self sufficient in rice for many decades. Vietnam and Thailand, because of their climate, irrigation and soil, are the two largest rice exporters and in some parts can achieve three harvests per year.

[meatboy]

anyone remember that MANDY RICE everyone wanted some of that.

[Suradit69]

(based on past presumption )

Best way to formulate a losing argument.

[KittenKong]

Because Thailand has a vast stockpile (thanks to the absurd minimum-price scheme for rice producers) that it cant use and must get rid of before it rots.

So China picks it up on the cheap.

Stocked Thai rice was never intended for domestic use but for export. The Thai rice stockpile was created by a rice pledge program wherein the government purchased the rice from the farmers at a set price, stored it until sold at auctions or through rice contracts. The purpose was to stablize rice production and provide a steady income stream of revenues to the farmers. This was not an original idea.

One of the measures that China uses to incentivize rice production is to guarantee rice farmers a minimum price for rice. If prices drop below that floor, the government purchases it at the guarantee price (even if above world market price) and stores it, after which the rice may be sold at auction. Unfortunately for the Yingluck administration, it was prevented by the constitution from borrowing funds to pay the farmers back when its purchase price rose above the world market price. China having an unelected dictoral regime does not have such constraints. Similarily, the Thai Junta after its overthrow of the Yingluck regime suspended the constitution and borrowed government funds to pay the farmers.

Whatever the reason behind the stockpile, I dont see what difference this makes to my original comment. And no matter how you look at it this rice is being sold at a loss from which China is benefiting.

Coming from the Mecca of ill-conceived agricultural subsidies and price-fixing (the EU), I look upon all such bureaucratic solutions with deep mistrust; they are expensive to implement and in the end they just don't work. The same applies to the equally stupid new car subsidy.

[A1Str8]

China has a lot of money to burn. They buy rice from Thailand simply because they feel for them. Nobody else wants their stinking rice so they buy some which they are going to feed to the pigs.

[sandyf]

Quality. The Chinese know the difference from one rice to another. They love Jasmine rice.

Maybe, but they do not dish it up on the streets. I was there for the holiday this time last year and what you get is like quick set cement.

[sandyf]

anyone remember that MANDY RICE everyone wanted some of that.

testing the grey cells now, about 63 I think with Christine Keeler.

[billd766]

anyone remember that MANDY RICE everyone wanted some of that.

testing the grey cells now, about 63 I think with Christine Keeler.

Don't forget Dr Stephen Ward and the Minister of War, Jon Profumo.

[Globeman]

If we only knew what the real deal was on the trains and highways we might understand the rice secrets. In the meantime, better to forget because it might be many years before we know.

Yes, don't question or probe or speculate... sit around and watch more TV and give your brain a lifelong rest.

[bizzle]

China has a lot of money to burn. They buy rice from Thailand simply because they feel for them. Nobody else wants their stinking rice so they buy some which they are going to feed to the pigs.

I don't think any government is that thoughtful of other countries

[sandyf]

anyone remember that MANDY RICE everyone wanted some of that.

testing the grey cells now, about 63 I think with Christine Keeler.

Don't forget Dr Stephen Ward and the Minister of War, Jon Profumo.

Looked it up and found this.

At the height of the Profumo scandal, the first prime minister of independent Malaya (now Malaysia) Tunku Abdul Rahmanarrived in London for a visit. At a reception at Heathrow Airport when asked what he wanted to do first, he replied "I want Mandi" which shocked the reception party because they did not know that "Mandi" means "take a bath" in Malay.

[malt25]

China has a lot of money to burn. They buy rice from Thailand simply because they feel for them. Nobody else wants their stinking rice so they buy some which they are going to feed to the pigs.

I don't think any government is that thoughtful of other countries

So, you didn't sense a bit of sarcasm there ?

[duanebigsby]

Here's an interesting link that points out several reasons.

http://reliefweb.int/report/china/china-worlds-largest-rice-importer-regional-implications

One reason is rice production is moving north when rice consumption is greater in the south. Transportation is

poor so the south imports from nieghbouring countries. The link has other points as well.

Edited October 6, 2014 by duanebigsby

[bizzle]

China has a lot of money to burn. They buy rice from Thailand simply because they feel for them. Nobody else wants their stinking rice so they buy some which they are going to feed to the pigs.

I don't think any government is that thoughtful of other countries

So, you didn't sense a bit of sarcasm there ?

Lol I guess so

[mikiea]

Because Thailand has a vast stockpile (thanks to the absurd minimum-price scheme for rice producers) that it cant use and must get rid of before it rots.

So China picks it up on the cheap.

Right ok thanks

So it would be cheaper for china to buy the stockpile rather than producing this amount themselves? Why would they buy cheap rice, obviously for a profit but coming back to the buying country being China , surely they have enough...? Or would they export it in smaller amounts to other countries..?

[mikiea]

china is running out of land for rice production due to pollution and the crazy dam all the rivers for hydro uses scheme that is part of one of their great leap plans. the daming of all most every river in multi locations is why there is little water. after a river flows near a major city the water is of no use to anybody farmers included. every time it rains the rice fields are flooded because the natural water flow was diverted. its a mess. there are no industerial waste sights in china, everything is dumped into the river system, and by that i mean everything. safe ground water near any city is almost impossible, have to drill to deep. the states & latin america have been selling rice to china & japan for a long time. i lived there for 10 years, i liked it, thailand is nice but oh so hot