Have you heard of the 'grain water tourists'? International rice prices have just hit a 15-year high.

Recently, a video titled "Man Causes Chaos at the Airport Over Excess Grain" has been circulating online.

In the video, a man boarding a flight from Qingdao Jiaodong Airport to South Korea was stopped at the boarding gate because his carry-on luggage was overweight due to a large amount of grain. The man got into an argument with the airport staff and angrily smashed his luggage, causing the flight to be delayed for over an hour.

What seems like a common case of "airport disturbance" has put the spotlight on a group of "grain smugglers" who have profited from a significant price difference.

With the intensification of the El Niño phenomenon, the risk of grain supply remains high. This week, the benchmark rice price in Asia reached a 15-year high.

Low self-sufficiency combined with soaring rice prices has led to consecutive price increases in South Korea, where the price of rice is almost three to four times higher than domestic prices.

Under the significant price difference, some people are taking risks by shuttling between China and South Korea, profiting from smuggling grain on their backs, earning thousands of yuan in one trip.

Smuggling Grain on Their Backs to South Korea Can Earn Thousands of Yuan

Proxy purchasing is not uncommon, but most of it involves cosmetics, luxury goods, and other products. Now, even grain has become a target for resale.

According to media reports, "grain smugglers" are organized in groups and mostly travel back and forth on the same day, carrying grain on their backs, mainly at Qingdao Jiaodong Airport, which has the most frequent flights to South Korea. This practice has also extended to other ports such as Beijing Daxing Airport.

Behind the smuggling of grain on their backs to South Korea is the high price of grain in South Korea.

Some netizens have shared videos on short video platforms showing the retail price of rice in South Korea ranging from $3.41 to $6.24 per kilogram (approximately RMB 24.3-44.4), which is almost three to four times higher than the retail price of rice in China.

With the high price of rice in South Korea and the cheap air tickets from neighboring cities such as Qingdao and Weihai to South Korea, there is a profit margin for "grain smugglers".

Taking Qingdao Jiaodong Airport, which has the most flights to South Korea, as an example, the price of a flight from Qingdao to Seoul on December 22nd is mostly below 500 yuan. With just one round trip, not only can the cost of the air ticket be covered, but one can also earn thousands of yuan.

According to media reports, "grain smugglers" take full advantage of the free checked baggage allowance on international flights. They first check in 2-3 pieces of luggage and then carry 1-2 pieces of carry-on luggage for free, with a total weight generally ranging from tens of kilograms to over a hundred kilograms. According to the price difference of rice mentioned above, even excluding the airfare, one can earn 1000 to 2000 yuan on such a trip.

There is also analysis pointing out that when returning from South Korea to the domestic market, people usually don't return empty-handed and bring back some cosmetics. In this way, one can net more than 4000 yuan on a round trip. As long as you fly 4 or 5 times a month, you can earn nearly 20,000 yuan.

Low self-sufficiency rate, excessive trade protection, and high food inflation in South Korea

Since the beginning of last year, inflation in South Korea has been on the rise, especially the significant increase in grain prices. South Korea's CPI in November increased by 3.3% year-on-year, maintaining a level of around 3% for four consecutive months. Among them, agricultural products rose by 13.6%, the largest increase since May 2021, pushing up overall prices by 0.57 percentage points.

Furthermore, the high food inflation in South Korea is related to low self-sufficiency and excessive trade protection.

Due to geographical constraints, South Korea's per capita arable land area is only 0.6 mu, resulting in a low self-sufficiency rate for grain. In 2000, South Korea's self-sufficiency rate for grain was still 30.9%, but it had dropped to 19.3% by 2020.

This year, South Korea's rice production has decreased. According to media reports, South Korea's rice production is expected to be 3.684 million tons, a decrease of 2.1% compared to the previous year. The remaining rice stock this year is about 77,000 tons, a decrease of approximately 42% compared to the 133,000 tons in the past 10 years.

The decrease in production has prompted South Korea to protect its agriculture by implementing higher import tariffs and other agricultural protection measures. Wang Lei, director and professor of the International Development and Cooperation Department of the School of International Economics and Trade at Shandong University of Finance and Economics, analyzed:

South Korea, as a peninsula country dominated by mountainous terrain, has inherent disadvantages in agricultural development due to its geological and environmental conditions. Coupled with a significant loss of labor force and severe aging, agricultural productivity is low, and the long-term supply of agricultural products cannot meet domestic demand. However, in order to protect its own industries, South Korea has long implemented higher import tariffs and other agricultural protection measures, further exacerbating the dilemma.

As an importer of grain, South Korea's food prices are greatly affected by external factors.

Recently, with increasing concerns about the increase in rice demand and the impact of the El Niño phenomenon, Asian rice prices have reached a 15-year high.

According to data from the Thai Rice Exporters Association, the Asian benchmark rice price - 5% broken rice - rose 2.5% from the previous week to $650 per ton, the highest level since October 2008.

The last time rice prices reached this milestone was in early August when India, the world's largest rice exporter, implemented large-scale export restrictions, while drought threatened Thailand's rice harvest. After that, rice prices fell in September and October, but started to accelerate again in November. Chookiat Ophaswongse, Honorary President of the Thai Rice Exporters Association, pointed out:

Considering the persistent concerns over food safety and the ban on rice exports from India, it is expected that rice prices will remain at a relatively high level until early next year.