Over the past 3 years, China has seized the medium and short grain global rice market with expanding low-priced exports. Historically, the United States has been the top medium and short grain exporter, with the European Union, Australia, and China supplying smaller shares of the market. Most rice traded internationally is long grain, but markets around the Mediterranean region and East Asia tend to import relatively more medium and short grain rice.
However, since 2017, China exports have risen sharply with sales from its abundant inventory of lowquality stocks. China medium grain milled export prices fell by one-half between 2016 and 2017 and continue to trend downward in 2020. China exports remain high largely because of low prices in comparison with other suppliers.
For most of the past decade, China exported primarily to East Asian markets: North Korea, South Korea, and Japan. Since emerging as the world’s largest medium and short grain exporter, though, China exports have reached vastly different markets, extending its geographic reach considerably. The largest China rice markets in 2020 are Egypt, South Korea, Sierra Leone, and Papua New Guinea. While South Korea represents one of the core markets, the others represent new regions where China is growing its market share.
China exports are reaching new markets within the Mediterranean such as Egypt. After the Egyptian government limited rice planting area in 2018, the crop fell by more than a one-third and it turned to the global market to offset the shortfall. China thus expanded into the Mediterranean region and Egypt became its largest market.
To meet domestic demand, Egypt imported nearly 450,000 tons of medium and short grain rice from China in 2019 and more than 250,000 tons so far this year. Other markets where China has expanded within the Mediterranean include Turkey, Libya, and Lebanon.
Surprisingly in 2017, China began exporting low-priced medium grain to several markets in Sub-Saharan Africa, which had not traditionally been a major market. Exports are sent to a variety of markets in Africa with Sierra Leone being the largest this year. The African markets account for nearly one-third of China medium grain exports.
A relative absence of Australia in the market has enabled China to supply markets in Oceania, including Papua New Guinea. In previous years, Papua New Guinea would import from the United States when Australia experienced production shortfalls, but recently it has turned to China instead based on low price and close proximity.
Looking into 2021, China is expected to continue liquidating its huge inventory. Despite a slowdown in exports to African countries, exports are expected to remain high based on competitively priced commercial shipments and food aid. However, strong domestic demand and the return of Australia to the market will likely limit further expansions to new markets. USDA