May 8, 2008
 

Beijing assures China's grain stocks adequate; to crack down illegal exports

China's economic planner on Tuesday (May 6) has assured that the country has sufficient grains to stabilise food prices amid reports that authorities are struggling against rice and wheat smuggling to overseas markets.

In a statement on its Web site, the National Development and Reform Commission (NDRC) said the government is assuring self-sufficiency in staple grains such as rice, wheat and corn for its 1.3 billion people.

The comments, published in the form of a question-and-answer session with an unnamed official, emphasized Beijing's ability to keep grain prices stable after four straight years of bumper harvests.

NDRC said reserves alone could meet demand for six months.

The government has subsidised grain farming to encourage sufficient supply to control prices for rice and other agricultural staples, creating a gap with international prices.

China has also raised payments to grain farmers and is shifting grain from grainbelts in the north to heavily populated southern areas where consumption outstrips production.

However, increasing food prices has boosted the country's inflation rate to a nearly 12-year peak of 8.7 percent in February.

Like consumers elsewhere, Chinese families are feeling the pinch of higher prices for food, which accounts for half of spending for many families. The jump in food costs has unnerved the country's communist leaders, given the public protests that followed bouts of inflation in the 1980s and '90s.

The Customs department said that authorities in various regions were cracking down on illegal grain exports by traders hoping to profit from surging international prices.

Eight such shipments, totalling almost 7 tonnes of rice and 163 tonnes of wheat, were caught in the past several weeks, according to a report posted on the Web site of the Customs Administration.

A customs official in the eastern city of Hangzhou has confirmed the report but would not discuss details.

Similar customs raids were reported from Yunnan, which borders Vietnam.

China's Customs Ministry has also warned that it will heavily check exports to Hong Kong, which depends on the Chinese mainland for much of its food supply, to ensure grain is not diverted to other markets.

Internationally, rice prices have more than doubled while overall food prices have risen by 83 percent in three years, according to an estimate by the World Bank. Surging prices have sparked riots in Haiti and several African countries, while raising worries over supplies in the Philippines.

According to estimates by the UN Food and Agricultural Organization, China's grain production is expected to rise 0.2 percent in 2008 to 390.2 million tonnes, up from 389.2 million tonnes in 2007. China consumed 185 million tonnes of rice last year, about even with its production.

The government has lifted tax rebates for exports of rice, wheat, soy and corn late last year and imposed tariffs of up to 25 percent on exports of 52 food products, including major grains and soy, to discourage sales overseas.