Gap between China soy supply, demand widens

The gap between China's soy supply and demand has further expanded while supply of corn and wheat has exceeded demand, according to a senior grain official.

For rice, supply and demand are basically balanced, said Nie Zhenbang, chief of the State Administration of Grain, in a question and answer piece published Thursday on the administration's Web site.

China's grain prices face both downward and upward pressure in 2009, and the administration will closely monitor price movements domestically and globally, said Nie.

Higher domestic grain output and a tumble in global grain and oil prices as well as lower demand for grain due to slowing economic growth are factors that may push prices lower, he said.

Meanwhile, the government's support policies such as its minimum grain purchase price program and market purchases will help support prices, Nie added.

Global grain and oil prices are still at historical highs while the stock consumption ratio is at historical lows, he said.

China will continue to increase subsidies to grain farmers and steadily raise minimum grain purchase prices to keep grain prices at reasonable levels, Nie said.