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Supplies of grain 'stable'
By Yu Tianyu (China Daily)
Updated: 2008-04-08 08:49

China's grain reserves will remain stable this year despite the credit crisis, soaring oil prices and pressure on global supply, Wen Quan, of leading grain, oils and foodstuffs import and export group COFCO, said yesterday.

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At 150 million to 200 million tons, the grain supply is more than double the global average, Premier Wen Jiabao said during an inspection of Hubei province's agricultural sector during the spring plough.

The supply is sufficient for now but could be strained by weather conditions. Current forecasts predict droughts, Wen said. He added the government has nearly halted exports of some staple crops, including wheat and corn.

The annual corn yield is expected to be roughly equal to last year's, Wen said.

Grain supplies were not much affected by the snowstorms that hit southern regions earlier this year, because the spring plough had not yet begun, Li Ninghui, a researcher with the Chinese Academy of Agricultural Sciences, said.

Some areas, such as Northwest China, have a grain surplus after four years of harvest, Li said.

Also, soaring oil prices have caused the price of agricultural equipment to rise, which has diminished incomes for farmers and grain processors, he said.

To ensure supply stability and encourage farmers to continue production, the government has raised the minimum-purchase price of rice and wheat for the second time this year.

In addition, 10 policies to boost agriculture and grain production have been adopted by the central government, which will this year allocate 562.5 billion yuan ($80.3 billion) to the sector - 25.3 billion yuan more than last year.


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