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Ample grain to keep food prices stable

(China Daily/Agencies)
Updated: 2008-05-07 06:24

The country has enough grain reserves to keep food prices stable, the top economic planner said on Tuesday.

"Our grain supply and demand is basically stable, our reserves are full, and we can ensure supply and stable grain prices," the National Development and Reform Commission (NDRC) said in a statement.

The statement, in a question-and-answer format, was made amid reports of soaring grain prices on the international market.

It's a national strategic priority to maintain basic self-sufficiency in grain for the 1.3 billion people, it said, noting that the country has reaped four straight years of bumper harvests.

The NDRC said the country's supplies can meet the current annual grain consumption at 510 million tons.

Output of wheat, rice and corn exceeds consumption; and the country only needs some imports to meet the shortfall in soybeans, it added.

In the major production regions, reserves can meet demand for six months, the NDRC said, adding that the government is transporting grain from the north to the heavily-populated south where consumption outstrips production.

Ding Shengjun, an expert at the Academy of the State Administration of Grain, said the country has achieved more than 95 percent self-sufficiency in food supply in recent years.

It also has in storage 150 to 200 million tons of grain, about 30 percent of the annual production - far more than the 17 percent safety level set by the Food and Agricultural Organization. Rice accounts for 70 percent of the reserves.

About 185 million tons of rice was consumed last year, roughly equivalent with production.

As the country is mainly self-sufficient in corn, wheat and rice, rising rice prices on the global markets will not have much impact domestically, the NDRC said.

Customs and commerce authorities are cracking down on illegal grain exports by traders hoping to profit from surging international prices.

Asian rice prices have almost trebled this year and prices on the Chicago Board of Trade have risen more than 80 percent to hit successive record highs as export restrictions by leading suppliers fuel worries over food supplies.

The Asian Development Bank said on Monday more than 1 billion Asians may sink back into extreme poverty without extra aid to counter soaring food prices.

Asia is home to two-thirds of the world's poor.

When the price of rice in Thailand rose from some $300 to $1,000 per ton in about six weeks, its Chinese equivalent remains at no more than 2,000 yuan, or less than $300.

Lured by the huge disparity in international and domestic prices, rice exports have risen sharply compared with last year despite export controls and a cut in rebates, according to latest figures from the State General Administration of Customs.

Official figures show the country exported 350,000 tons of rice in the first two months and imported 138,588 tons.

Despite optimism, top grain authorities and experts have expressed worries over the country's long-term grain supply.

"We now have less room to increase grain planting acreage, and it's becoming more and more difficult to raise yields," said Nie Zhenbang, head of the State Administration of Grain, citing shrinking arable land and water shortages.

"It is increasingly difficult to maintain price stability," he said recently, noting that fast expanding demand had made China increasingly dependent on imports for edible oil.

Experts have also said that domestic grain prices are bound to rise gradually as the profit margin for farmers is narrowing due to rising costs.

Experts also said that steady grain prices contribute to the pressing task of curbing inflation.

China's CPI growth hit a 12-year peak of 8.7 percent in February and dipped only slightly to 8.3 percent in March, much of the increase fueled by rising food prices.

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