May 2, 2008

China to strictly control on grain and fertilizer exports

The Ministry of Commerce has urged local authorities to strictly control grain and fertilizer exports and expand storage of farm produce to ensure domestic supply.

The ministry has issued a circular requiring rigorous measures be taken to implement state policies of controlling grain and fertilizer exports, the ministry said on its website on Wednesday (April 30, 2008).

The move was China's latest effort to stabilize agricultural production and food supplies. Food prices soared 21 percent year-on- year in the first quarter. China's first- quarter consumer price index saw an 8-percent on-year increase. The government targeted a 4.8-percent increase this year.

In addition, the circular urged authorities to expedite the granting of import licenses for edible oils and make it convenient for importers to buy more of the varieties that are in short supply.

The circular also urged local officials to prevent unreasonable price hikes for farm materials, such as seeds, fertilizers and diesel, in the distribution process.

The ministry directed that efforts to set up local meat reserves be intensified and stockpiles of daily necessities like small-volume packages of grain, edible oil and meat at large enterprises be increased.

China has also scrapped export rebates for most grains and impose export duties of between 5 percent and 25 percent this year.

The government also granted US$3.6 billion in subsidies to farmers for the purchase of production materials last month.