March 15, 2011

China is able to keep grain prices basically stable and must maintain self-sufficiency in grain supply, Agriculture Minister Han Changfu said Monday (Mar 14).

The government's policy is to maintain rates of self-sufficiency in grains at 95% or more. However, adverse weather has prompted speculation that China may import more grain in the next few years and to rebuild or maintain reserves.

Grains available for trade in the global market total around 250 million tonnes, less than half of China's domestic grain production, Han noted, adding that for rice, international trade totals 25-30 million tonnes, equivalent to around 15% of China's consumption.

China has been working for years to achieve and attain self-sufficiency in key grains that form a large part of its national diet, but factors such as bad weather and periodic increases in local grain prices frequently force the country to supplement supply with imports to meet local demand and limit food-price inflation.

Due to the government's price-control measures, grain prices in global markets rose remarkably faster than in China, limiting the country's grain imports this year, analysts said.

However, domestic supply and demand are now in a tight balance, prompting imports of high-quality wheat and feed corn when prices are appropriate.

Last year, about 1.2 million tonnes of wheat were imported, equivalent to less than 1.5% of domestic consumption, along with 1.6 million tonnes of corn, or about 1% of domestic demand, according to customs figures.

The outlook for Chinese corn imports this year remains uncertain after an 18-fold increase in 2010, as higher global prices have limited domestic demand, said chairman of Cofco Group, one of the nation's largest grain and oilseed importers, said previously.

The company has no plans to import more feed wheat from Australia this year, after it bought around 200,000 tonnes earlier this year.