China: A Growing Appetite for U.S. Rice?

China and the United States are expected to sign an agreement to open up the Chinese rice market to U.S. producers, who have lobbied for the deal for more than a decade. China's agricultural policies are gradually changing, but the country's policy of self-sufficiency for rice will likely remain. The policy limits the percentage of total rice consumption that China can legally import, but given how much rice China consumes, it is still a lucrative market for global exporters. However, because of incompatible quality control regulations, up until now U.S. exporters have not been able to tap into the Chinese rice market. Even so, in anticipation of an eventual deal, many U.S. producers have been making the necessary adjustments to bring their crops in line with Chinese standards.

International rice prices are low despite imbalances in supply and demand, though U.S. export prices are currently much higher than those of its competitors. Thus, when the export protocol is signed, U.S. exporters can at best expect to fill niche demand for high-quality rice in China. But regardless of price fluctuations, the long-term potential of U.S. rice exports to China is uncertain because of China's evolving regulatory environment.