Rice losing place on Asian plate as diets improve

By Niu Shuping and Mayank Bhardwaj

BEIJING/NEW DELHI (Reuters) - Rice prices have surged this year for many reasons, but unlike most other commodities, fast-growing Chinese and Indian demand isn't one of them.

With incomes rising in two countries where a third of the world's population consumes about half of the world's rice, more people are eating protein-rich meat and diary, or sampling new foods like pasta, leaving less room on the plate for rice.

If Chinese rice demand follows the trend seen in wealthy Japan it could fall by half in the coming decades, bringing relief to world consumers more anxious than ever after a near trebling in benchmark Asian rice prices this year.

"People are making more money and are eager to try other tasty food," said Chai Weizhong, associate professor at Peking University, where he studies public nutrition.

"More people realise meat and vegetables are nutritious and healthy and more choices have cut into consumption of rice."

What's bearish for rice is bullish for corn and wheat. Growing demand for higher-protein foods, both for livestock feed as well as food, is partly behind the doubling in global corn and wheat prices over the past two years.

This year, lagging rice prices moved swiftly to catch up with other grain markets, fuelled largely by decisions by Vietnam, India and even China to clamp down on exports in order to keep prices low at home.

That rally also revived fears about the long-term supply outlook for Asia's staple at a time when industrial development is encroaching on arable land, rising costs are straining farmers and volatile weather is threatening crops.