BANGKOK - Rising demand and constraints on production capacity caused by pollution and industrialization are likely to push up rice prices in China, with knock-on effects on the global market, expert observers and Southeast Asian rice traders are predicting.
The London-based International Grains Council, which closely monitors the global rice market, estimates that Chinese production will increase by 0.7 per cent to 145.6 million metric tons in 2016, from 144.6 million tons in 2015, continuing the upward trend of recent years.
But consumption is growing faster as China's population continues to rise, forcing Beijing to import supplies to meet demand. The IGC forecasts that imports will reach 4 million metric tons in 2015, compared to just 0.5 million metric tons in 2007. Some observers say that up to 5 million metric tons of rice a year is also being smuggled across China's borders, sometimes with the connivance of state officials.
China is trying to boost rice-growing productivity by introducing hybrid brands that provide higher yields and better quality. But many experts say the farm sector may be unable to keep pace with demand in the face of the rapid conversion of farmland to industrial use, along with soil pollution and shortages of water.
"As China urbanizes, and its economy shifts from agriculture to industry-based development, it faces great challenges in managing its natural resource base," the UN Economic and Social Commission for Asia and the Pacific, known as Unescap, said in an August report.
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