Large rice exports to North Korea rumored amid abundant domestic supplies

China may be exporting up to 500k tons of rice to North Korea over the next six months, according to news reports in Chinese media. 

According to vessel tracking data, several North Korean cargo ships are currently loading rice out of the major northeastern port of Dalian. 

Rice stocks within China are still very large. The last national reserve auction was in September and was 613k tons of reserve rice auctioned by only 32k tons purchased by the market. 

Reserve rice is currently being purchased in Heilongjiang with the government’s reserve buying going from November 5th, 2022 to February 28th, 2023. The reserve purchase price is 2,620 yuan per ton which is 20 yuan per ton higher than last year. 

The province also is seeing relatively large supplies and weaker demand. Many companies have large inventories. Similar to recent reports from Hubei in central China, demand is relatively weak and the cash market is quiet. 

Export volumes for North Korea were estimated at 62k tons for 2022. Exports volumes of 500k tons in the first half of 2023 would be a significant increase, but with the Chinese market being relatively over-supplied, the exports are likely to materially change the supply and demand balance.