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China says it is able to maintain stable grain supply and price

China is able to guarantee stable domestic food supply and keep prices level, as the country has abundant grain reserves, said the National Development and Reform Commission (NDRC) Tuesday.

In March, international rice prices rose to their highest level in 19 years, and wheat prices rocketed to a 28-year peak. At the same time, China's domestic grain prices only reported mild increases, up 5.7 percent in January and 6 percent in February.

"China's grain output reached 500 billion kilograms in 2007, 70 billion kilograms more than that of 2003. The total production of rice, wheat and maize surpassed 450 billion kilograms in 2007," said the NDRC on its website.

Official figures showed that the country's output of rice, the most important stable food, topped 185 billion kilograms last year, slightly more than the domestic consumption volume between 180 to 185 billion kilograms.

The country's current ratio of grain reserves to consumption is higher than the 17 to 18 percent level, which is regarded as a safe minimum for global stocks, said the NDRC, the country's top economic planning agency.

Chinese Premier Wen Jiabao said in April the country has abundant grain reserves standing at 150 million to 200 million tonnes.

The central government vowed this year to spend more than 562 billion yuan (80.1 billion U.S. dollars) to support farms and the rural sector, 130.7 billion yuan more than last year.

The government decided in March to spend another 25.25 billion yuan in addition to this year's rural budget, mainly to subsidize farmers' purchase of seed, diesel, fertilizers and other production materials.

The government raised the lowest state purchasing prices for rice and wheat by the end of March, with lowest state purchasing price for rice up 0.14 yuan per kilogram, the second such move since February.

The Ministry of Railways last month ordered railway authorities in the northeast provinces to improve efficiency and send 10 million tonnes of grains out of the grain-rich northeast to the south from May 1 to June 30, in a bid to ease supply imbalances and stem price rises.

The northeast of China, namely the Heilongjiang, Jilin and Liaoning provinces, contributes 16.6 percent of the national grain output, or 83.1 billion kilograms annually.

The country this year has decided to strictly control grain export to ensure domestic supply and fight inflation, abolishing tax rebates, levying temporary duties and imposing quotas on the export of some grain products like rice and wheat.

Tags · Grain · Grain prices · China

06.05.2008. 11:46

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