March 5, 2008

China denies grain reserve crisis reports

China grain is kept at a relatively high level and fully secured, the head of the State Administration of Grains said, after the UN warns of shortage.

Nie Zhenbang, director of the State Administration of Grains, said the country produced 501.5 million tonnes of grain in 2007, the fourth consecutive year of increase, despite months of severe drought.

Recent reports from the UN's Food and Agriculture Organization state that the proportion of the global grain storage and consumption dropped to 20 percent, the lowest in the past 30 years.

The British Financial Times also predicted that the subprime crisis would be followed by grain produce reserve crisis.

Nie admitted that it would be more difficult to keep the domestic grain market and price stable due to decrease of infield and fresh water resources as well as the uncertainty of international grain market.

China needs to intensify its capacity building of the grain reserve security and increase the macro-control of the grain reserve, Nie said.