April 18, 2008

China reports grain trade deficit in January, February

China's trade of farm produce recorded a deficit in the first two months of 2008, against a surplus during the same period last year, the Ministry of Agriculture said Wednesday.

The country's exports and imports both increased for January and February, yet the imports have grown significantly as compared to last year, an official disclosed.

In the first two months of the year, China's foreign trade in farm produce was US$14.67 billion, up 38.6 percent on the same period last year.

Exports rose 7.4 percent year on-year to US$6.3 billion, while imports surged by 77.4 percent to US$8.37 billion.

The trade deficit was US$2.06 billion, compared with a surplus of US$1.15 billion a year earlier.

Chen Hongzhou, an analyst with Galaxy Securities, said the figures indicated that the government's measures to curb exports have been in full effect.

The ministry's report supported the earlier statement of the State Administration of Grain (SAG) that it would keep grain prices stable amid supply shortages and rising agricultural costs.

Zeng Liying, deputy director of the SAG, said Monday that there is growing pressure to increase the prices of major grains this year as a result of supply shortages, soaring agricultural costs and fluctuations on international futures markets.

However, Zeng assured that the country has sufficient reserves and will ensure price stability.