China smugglers disguise rice as road chips

By Niu Shuping

BEIJING (Reuters) - Relatively cheap Chinese prices have encouraged creative schemes to smuggle rice and wheat flour out of the country, local media reported on Thursday, adding that one port blocked seven such attempts in one month.

One firm declared 92 tonnes of rice bound for Thailand as "marble road chips," the Guangzhou Daily said.

Customs in Huangpu port also seized 45 tonnes of flour described as "water purification powder" destined for Indonesia, the paper said.

Huangpu authorities blocked a total of 280 tonnes of smuggled grains, in seven attempts in the month, after rice prices in Thailand, the world's largest exporter, hit historic highs. Thai prices peaked at nearly four times the price in China at that time.

China, concerned over its own supply and inflation hovering near 12-year highs, halted most exports of rice and flour through quotas and taxes and has been releasing state reserves to pressure grain prices at home.

China's policy worked so well it tempted passengers at the southern port of Gongbei to carry some extra kg of grain when they booked passage to Vietnam.

(Editing by Lucy Hornby)