March 27, 2008

China state council to lift minimum grain purchase price

China will lift the minimum purchase price of grain and increase subsidies to agricultural producers to help ensure the supply of grain, the country's State Council said in a statement Wednesday (March 26, 2008).

Though the move will increase the price of grain on the market in the near term, the State Council said in the statement that the adjustment was intended to curb inflation and maintain overall stability by boosting grain supplies.

China's consumer price index rose 8.7 percent in February from a year earlier, the fastest gain in almost 12 years, driven mainly by higher food prices.