Global Markets: Rice – Chinese Exports Continue to Soar, Compete with U.S. Medium Grain

Medium grain rice, also known as japonica, comprises a relatively small portion of global rice trade, and has historically been served primarily by exports from Australia and the United States (and to a lesser extent, Egypt). Medium grain represents close to 30 percent of the rice grown in the United States, yet claims a larger share of U.S. rice exports by value. U.S. medium grain exports peaked in 2011 at 860,000 tons, but in 2018 dropped to 550,000 tons, the lowest since 2007.

The primary markets for U.S. medium grain rice in 2018 were Japan, Jordan, Canada, South Korea, and Taiwan, with Japan and South Korea importing to fulfill their WTO obligations.

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Meanwhile, in the past few years China has emerged as a major rice exporter as it seeks to sell off excessive supplies. China’s medium grain exports have been entering many of the markets that were previously importing from the United States, such as Turkey, as well as current U.S. markets including Japan, Jordan, and Libya, and the United States itself in Puerto Rico.

Prices are a significant motivation; while U.S. medium grain is a premium at $925/ton, Chinese medium grain prices are half of that. Other medium grain exporters have been fading out of the market on low supplies (Australia) or have almost completely disappeared (Egypt). If China’s rice exports increase further, this trend has potential to continue.

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