China's grain purchase for reserves reaches 89 million tonnes

In 2009, China Grain Reserves Corporation procured 89.37 million tonnes of grains for national reserves in an effort to boost income for farmers.

The grains procured hit a record high and accounted for 16.8% of the total output. In the year, grain production in China increased for the sixth year in a row, by 0.4% from the previous year to 530.82 million tonnes, according to statistics released by the State Administration of Grain (SAG).

The aggressive grain procurement, according to Liu Xiaoran, director for the Jilin Grain Economy Research Institute, is part of the government's effort to support rural residents at a time when domestic grain price stayed sluggish.

The state-owned company bought soy at RMB3,700 (US$542) per tonne from producers in the country, RMB600 (US$88) higher than the export price in the first half of the year.

In 2008-2009, Grain Reserves Corp. bought over seven million tonnes of soy in the north-eastern Chinese provinces, of which around five million tonnes are still in reserve now due to failures in auctions.