March 1, 2007

 

China's grain output up but still fall short of demand

 

 

China's grain output rose 2.8 percent from the previous year to 497.46 million tonnes in 2006, the National Bureau of Statistics (NBS) said on Wednesday.

 

The 2.8 percent increase follows a 3.1 percent increase in 2005 and a 9-percent increase in 2004.

 

Although it is the first time the country's annual grain output has increased three years in a row since 1985, it still falls short of the country's demand, said analysts.

 

Grain output for 2007 is expected to be similar to levels seen in 2006.

 

China faces the possibility of a 9-percent grain shortage by 2010,a shortfall of almost 4.8-million tonnes, according to the Study Times, a newspaper affiliated to the Party School of the Central Committee of the Communist Party of China.

 

To assure self-sufficiency in grain, the Chinese government has said it would continue with its policy to set minimum prices for its grain purchase through China Grains Reserves Corporation.

 

Thus grain prices are expected to be stable in China this year although growing demand would lead to more imports and less exports.

 

Although China's area for grain crops increased at slightly less than one percent last year, arable land shrunk.

 

China had 105.38 million hectares of land for grain crops last year, an increase of 1.1 million hectares over the previous year.

 

However, the country's arable land had shrunk 6.5 percent in the past 10 years from 131 million hectares in 1996 to 123 million hectares in 2005.