July 29, 2010

China to penalise grain hoarders

China's top economic policy planning agency warned Wednesday (Jul 28) that it will suspend businesses found guilty of hoarding grain from state grain purchases for three years.

As grain prices have risen sharply, the sufficiency of China's grain harvest has come into focus as its summer grain harvest this year, which accounts for a third of its total, yielded 0.3% less than last year.

In its latest effort to head off food price inflation, the National Development and Reform Commission said in a statement that, despite six years of bumper harvests, recent bad weather had created expectations for price increases.

"Some businesses are blindly 'following the wind' in raising prices," it said.

The commission said it would strictly enforce price stabilisation policies, and called for businesses to strictly observe minimum purchase prices.

The agency said it would also strengthen the management of grain stockpiles, as well as financing mechanisms for grain purchases.

"Those found engaged in illegal behavior will get three years suspension from policy purchases and lose their inventory," it said.