Chinese importers mix costly Thai jasmine rice with cheaper grains to maintain profit
Chinese rice importers have been combining Thai jasmine rice with cheaper grains in order to maintain a profit, due to the very high price resulting from the government's pledging scheme.
Importers in China have complained about the rising price of Thai rice, which has affected their competitiveness and led to lower incomes.
Shua Hong Bing, a rice wholesaler and retailer operating in Beijing and Shantou, said recently that most Chinese rice importers currently had to mix Thai jasmine-rice grain with other cheaper grains because the former was far too costly.
"Although Thai jasmine rice is highly favoured by Chinese consumers, its too-high price during the past few years has encouraged traders to mix it with other grains. This is to ensure that we [traders] get some profit from rice selling because, if the price is too expensive, traders will get a lower return," he said.
Consumers prefer to buy cheaper rice even though they know the grains have been mixed, because the price of pure jasmine rice is too high for them when it comes to their daily staple, he added.
Normally, Thai jasmine rice is mixed with Pathum Thani rice grain, or with Vietnamese rice, which is US$100-$200 (about Bt2,920-Bt5,840) per tonne cheaper.
The price of Thai jasmine rice is quoted at about Bt50-Bt60 per kilogram, twice the price of Vietnamese rice.
The combination ratio is generally 8:2 or 7:3, with the Thai jasmine rice blended with smaller amounts of cheaper grain.
"Traders will only make a very small profit if they sell pure Thai jasmine rice, because most consumers are reluctant to pay such a high price," Shua said.
Many Chinese consumers have also turned to Vietnamese fragrant rice, as it is much cheaper than Thai jasmine rice and has a similar aroma, he said.
With little difference in quality, price is the most important factor in their purchasing decisions, with the very high price of Thai rice ruining Thai export opportunities in the Chinese market, the trader added.
According to the Thai Rice Exporters Association, the price of Thai jasmine rice is currently quoted at $1,231 per tonne, while Vietnamese fragrant rice is traded at $850-$950.
Fang Yi Ming, a 73-year-old housewife, said her family had always favoured Thai jasmine rice since she was very young. However, with the rocketing price of Thai rice, she has had to adjust and now consumes mixed rice.
"I can hardly find pure 100-per-cent jasmine rice in the shops, as most of it has been mixed. Even in restaurants, they have turned to cooking mixed rice or using Vietnamese rice because it is cheaper while having a similar taste to Thai jasmine rice," she said.
China is Thailand’s fifth-largest rice market, after Iraq, the United States, Benin and Hong Kong. Mainland China is the third-largest import market for Thai jasmine rice, after the US and Hong Kong.
However, while exports of Thai jasmine rice to China dropped 4.78 per cent to $106.28 million last year, sales in the first two months of this year rose 78.89 per cent, year on year, to $25.63 million.
