April 9, 2008

China required increasing state grain reserves in face of rising prices

China needs to increase its grain reserves at an appropriate time due to rising global prices, said a commerce ministry official on Wednesday.

The country also needs to encourage big agricultural enterprises to set up grain production bases and logistic bases overseas through measures including favorable loans and transportation fee subsidies, said Li Shiguang at the Ministry Of Commerce.

China's state grain reserves are between 150 million and 200 million tonnes, which is sufficient to meet domestic demand.

But China still faces tight grain supply due to its rising population, along with dwindling land and water resources.