China's grain prices to show marginal increase 

Grain prices in China are expected to rise moderately in the second quarter, according to the National Development and Reform Commission (NDRC) on Wednesday (May 5).

 

 

Despite the sluggish international grain market, domestic grain prices will continue to edge up in the second quarter, the NDRC said.

 

The southwest region, which is experiencing drought, contributes to 15% of the nation's annual grain production and if its grain output falls 10%, the nation's total will fall 1.8%, according to a report by United Securities. 

 

Wang Jun, an analyst with Beijing CIFCO Futures Co., pointed out that grain price rise will exert little impact on CPI. In CPI system, pork prices take a dominant weight while grain prices play a small role in driving up CPI. The NDRC previously said that though prices of water, electricity, oil and natural gas will rise somewhat, the growth is controllable, and their weight in CPI system is relatively low, adding that the CPI growth will remain mild in the second quarter.