Rice – Term Paper

Rice is the subject of frequent food fraud reports, however the risk remains low for food manufacturers who purchase rice in developed countries. Although there have been credible reports of sacks of rice within large shipments being replaced with sacks of paper pellets, sweet potato pellets or plastic resin in past years, the current low global price of rice makes this type of fraud less likely at the present time. Rumours of plastic rice have surfaced in various countries since December 2016, however none have been substantiated.

Within developed countries the biggest risks for rice are from fraudulent variety claims (particularly basmati) and illegal pesticide residues. Rice from India and Pakistan is affected.

In developing countries rice is at risk of fraud related to government subsidies, quotas, illegal trading and smuggling.

Thailand’s 2017 harvest of jasmine rice is predicted to be 40% lower in volume than previous years. This could increase the risk of fraud for jasmine rice, with illegal cross-border movement and mis-declaration of country of origin the most likely types.

There are unusual rice trading patterns in Asia at the moment 17/07/2017. Sri Lanka and Bangladesh have low rice stocks due to drought and flooding and are purchasing rice from Thailand, a move that is unusual. Unusual trading patterns such as this can be an indicator of increased fraud risks. 19/07/2017 Bangladeshi authorities have just intercepted a load of rice that was being smuggled out of the government warehouses.

Food scientists in India claim that they have found no plastic rice ever, however they acknowledge that rice has been adulterated with chemicals, including boric acid, to close its pores and make it appear shinier and brighter. These chemicals could give the rice a strange texture or behave strangely when cooked. 21/05/2017 European Food Safety Authority has flagged ‘fake’ plastic rice as an emerging issue in food fraud, with the developing world most likely to be affected, however samples of rice that is actually ‘plastic’ have failed to appear. It is very likely that illegal substances added to fraudulently adulterated rice may be giving it the smell or texture of ‘plastic rice’ without actually being made of 100% plastic. Rice-like granules made from plastic resins would be completely unchanged by cooking in boiling water, which does not match descriptions provided by consumers.

Thirty people in Sri Lanka have been accused of selling rice at a higher price than the maximum retail price set by the government. Authorities are investigating. 10/02/2017 Where there is a demand for foods like rice, fraudsters will seek to gain from avoidance of price caps, duties and the like. This risk is higher where more market regulation is in place.

Pesticides at unsafe levels were found in rice labelled ‘organic’ and ‘pesticide free’ in India. 09/02/2017 Organic products are at very high risk of fraud because of the premium price of those products compared to conventional products. The substitution of conventional rice for organic rice is likely to be a common type of fraud and one that can be expected to continue for the medium to long term.

A moth that is new to the region has begun to devastate crops in West Africa and experts fear for food crops including maize, rice, sorghum, sugarcane and cassava. 16/01/2017 If crops begin to fail prices will increase and the risk of fraud will increase. Smuggling and blending with substandard grains are two types of fraud that can be expected to occur in the area.

A rice mill has been shut down by authorities in India after they discovered that ‘fake’ and substandard rice as well as colourants were being mixed with food-grade rice for sale. 9/01/2017 The blending of cheaper substandard grains with higher quality grains is a common type of food fraud that can be very profitable, even if done at very low levels, in high volume commodities. The illegal addition of colourants to food products is an ongoing problem in India and one that is expected to continue.

The Thai government has refuted claims by an American consumer that some Thai rice is ‘plastic’. 5/01/2017 Plastic rice again! There remains scant evidence that plastic is being used to adulterate rice at the present time while rice prices are extremely low.

Tests on the rice seized by Nigerian authorities revealed it was not plastic. 31/12/2016 Rumours of plastic rice have surfaced in various countries in December 2016, however none have been substantiated.

Fake rice has been reported by a news agency in Kenya, although details are sketchy. 31/12/2016 Rumours of plastic rice have surfaced in various countries in December 2016, however none have been substantiated.

One hundred bags of rice that is suspected of being plastic have been seized in Nigeria. 24/12/2016 Although there have been credible reports of sacks of rice within large shipments being replaced with sacks of paper pellets, sweet potato pellets or plastic resin in past years, the current low global price of rice makes this type of fraud less likely at the present time. Rumours of plastic rice have surfaced in various countries in December 2016, however none have been substantiated.

The USA has again asked the World Trade Organisation (WTO) to intervene on China’s subsidies for grain, including wheat, corn and rice, as it believe the subsidies are negatively affecting USA’s ability to export to China. 19/12/2016 The outcome of any negotiations are not yet known, however if China does reduce its domestic ‘market support’, there will be significant impacts on the trading, prices and potentially on the risk of fraud for this commodity.

The FDA in Ghana has investigated rumours of plastic rice in the market and found none. 17/12/2016 Although there have been credible reports of sacks of rice within large shipments being replaced with sacks of paper pellets, sweet potato pellets or plastic resin in past years, the current low global price of rice makes this type of fraud less likely at the present time. Rumours of plastic rice have surfaced in various countries in December 2016, however none have been substantiated.

Globally the price of medium grain rice has halved in the 14 months since October 2015, partially due to oversupply. 16/12/2016 Lower prices generally lead to a reduction in the likelihood of food fraud, however, in countries with government subsidies and purchasing systems, these can be affected by fraudulent transactions. Where there is a large difference between prices in neighbouring countries there is an increased risk of smuggling and illegal importation of rice.

Officials in Antigua are on high alert for fake rice that is alleged to be made with plastic and coming from China. None has been found. 15/12/2016 Rumours of plastic rice have surfaced in various countries in December 2016, however none have been substantiated.

Jamaica is detaining all rice imports at its ports for sampling and analysis, sparking fears of a shortage. Authorities are concerned about reports of plastic rice being distributed in local markets. 13/12/2016 Although there have been credible reports of sacks of rice within large shipments being replaced with sacks of paper pellets, sweet potato pellets or plastic resin in past years, the current low global price of rice makes this type of fraud less likely at the present time. Rumours of plastic rice have surfaced in various countries in December 2016, however none have been substantiated.

Testing by Jamaican authorities failed to find any evidence of plastic rice. 13/12/2016 Rumours of plastic rice have surfaced in various countries in December 2016, however none have been substantiated.

Singapore customs authorities have seized 5000 bags of rice after being alerted of trademark infringements by the rightful trademark owner. 25/11/2016 Some news reports imply that the rice seized in this incident may be ‘fake’ or plastic, but this cannot be confirmed. Rice is very cheap in most Asian countries at present so the likelihood that frauds involving ‘fake’ rice made from plastic or paper pellets will be committed has decreased.

Basmati rice imported to Australia has been found to contain illegal levels of pesticides and fungicides. Other countries that import rice from the same sources (Pakistan and India) are likely to be affected similarly. 24/11/2016 Purchasers of rice should be vigilant, with imports from some countries and of some varieties thought to be more at risk than others with respect to illegal residues.

The price of rice in south Korea has plummeted to a 21 year low and authorities have begun to stockpile millions of tons. 11/11/2016 Decreasing prices typically reduce the risk of food fraud, however where there is a large difference between prices in neighbouring countries there is an increased risk of smuggling and illegal imports of rice.

There has been a severe slump in rice prices in Thailand and this is thought to be the result of speculation by traders and exporters. 6/11/2016 Decreasing prices typically reduce the risk of food fraud, however where there is a large difference between prices in neighbouring countries there is an increased risk of smuggling and illegal imports of rice.

The government of Myanmar is buying rice in an attempt to stem price declines in that country. 1/11/2016 Decreasing prices typically reduce the risk of food fraud, however where there is a large difference between prices in neighbouring countries there is an increased risk of smuggling and illegal imports of rice.

Thai rice is at its lowest prices in decades and the government is considering action to help stabilise the price and help Thai farmers. 31/10/2016 Where there is a significant price differential across borders there is an increased risk of smuggling and illegal imports.

The price of rice has started to fall and is expected to continue to fall as the global 2016-2017 production output is expected to exceed demand. 10/10/2016 Decreasing prices typically reduce the risk of food fraud, however where there is a large difference between prices in neighbouring countries there is an increased risk of smuggling and illegal imports of rice.

The price of rice in the Philippines is higher than that in neighbouring countries, due to changes in the trading and regulatory environment. 6/10/2016 Where there is a significant price differential across borders there is an increased risk of smuggling and illegal imports.

The Cambodian government is purchasing paddy rice and investigating other interventions as prices have plummeted in that country. 20/09/2016 Lower prices generally lead to a reduction in the likelihood of food fraud, however government purchasing systems can be affected by fraudulent transactions.

Domestically produced rice in Japan is at a very high price, with imported rice, including from California, taking its place in the retail and food service markets 08/09/2016 Misrepresentation of country of origin of rice is a risk in this market, where there is a price differential between locally grown and imported rice.

Climate change is predicted to have severe negative affects on the Cambodian rice industry by 2030. 02/09/2016 Reduced rice harvests will increase the risk of food fraud significantly. Rice adulterated or replaced with resin or paper balls is a common food fraud occurrence in Asia and is likely to continue, particularly within developing countries, including Cambodia.

Papua New Guinea’s (PNG) government has announced a policy that will give 80% of current rice market to domestic rice investors. Currently, over 75% of PNG rice is imported from Australia. 31/08/2016 Australian rice exports will be affected however this is unlikely to increase the risk of food fraud for Australian rice. There is a significant risk of fraudulent activity within the PNG investment incentive scheme, including the risk that imported rice will be fraudulently misrepresented as being locally grown.

Harvests of early rice are down in China, with floods and pests contributing to the poor harvest. The price of domestic rice has increased. 25/08/2016 As the cost of domestic rice increases, imports of potentially fraudulent rice will be more likely and fraudulent activity within the domestic market may also increase.

The Philippines is purchasing and stockpiling rice in preparation for natural disasters or future price rises. 19/08/2016 Quotas, subsidies and stockpiling all provide opportunities for fraud, often conducted by people within government or enforcement agencies. An oversupply in the longer term can also increase the risk of fraud within this sector.

Thai rice markets, both domestic and export are expected to suffer from an oversupply next year, leading to lower prices. 4/08/2016 Lower prices generally mean a lower risk of fraudulent activity.

European Food Safety Authority has flagged ‘fake’ plastic rice as an emerging issue in food fraud, with the developing world most likely to be affected. 1/08/2016 Rice adulterated or replaced with resin or paper balls is a common food fraud occurrence in Asia and is likely to continue, particularly with exports to developing countries, including those in Africa.

The annual growth in rice production is not sufficient to keep up with the demands of a growing world population, with the United Nations predicting that by 2050 rice yields will be up to 20% lower than yields in 2000. this is said to be due to limited availability of new land, rising salinity and water scarcity. 30/06/2016 Rice fraud is already common in some developing nations, with sacks of rice sometimes adulterated or replaced with paper or plastic pellets. The likelihood of rice fraud can be expected to increase as rice becomes more expensive or less abundant.

An agreement between more than 160 member countries of the World Trade Organisation will result in the removal of export subsidies on agricultural products including dairy, grain, fresh produce and animal feed. 20/12/2015 As the subsidies are removed in the medium to long term the prices of many agricultural products are expected to change significantly. The price adjustment will vary significantly from market to market and from product to product. Falling prices generally mean a lower risk of fraud within that product type. However very cheaper flours make an attractive substitute or diluent for fraudulent adulteration of other products because cheaper diluents increase the profitability of fraud. Again, this will vary significantly from market to market.

A large multinational food manufacturer, Mars has said it will source 100% of its rice sustain-ably by 2020. The program has commenced on a pilot level in Pakistan and India 27/10/2015 This may increase the demand for sustain-ably grown rice, particularly if other multinationals follow suite, although the affect on price is difficult to estimate. Fraudulent misrepresentation of characteristics related to sustainability is an increasing risk in the medium to long term.