March 7, 2005

China plans to stop wheat imports in 2005

China plans to stop wheat imports this year because of surplus stockpiles, and keep purchases of soybeans from overseas to meet demand. The Asian giant is the world's biggest consumer of wheat, rice and corn.

"We can be self-sufficient in wheat this year because of increased stockpiles, and won't be looking at imports,'' according to Nie Zhenbang, director of the State Grain Administration, said.

"We'll still import soybeans as our local output is not meeting demand.''

Shortages of grains including rice prompted Beijing to offer incentives and subsidies last year to farmers, who raised production by 9 per cent to a record 470 million tonnes.

That reversed a five-year decline in output, the National Bureau of Statistics said in January.

China's grain reserve is now more than 18 per cent of annual production, Nie said, declining to provide the exact volume. The country plans to import about 20 million tonnes of soybeans this year to supplement local output of 16.5 million tonnes, he said. China imported 20.2 million tonnes of the crop last year, according to customs.

China's grain demand may reach 485 million tonnes a year, leaving the domestic harvest short, even after last year's record, said Han Jun, rural economy director at the Beijing-based Development Research Center of the State Council.

China wants to raise living standards for 800 million of its people who rely on agriculture for their livelihood.

The government gave farmers RMB 45.1 billion (HK$42.52 billion) of subsidies and tax cuts last year.