August 5, 2010

 

China steps up grain price control

The Chinese government has recently issued a circular asking all localities to guide and supervise relevant enterprises in strictly implementing the minimum state purchase prices and temporary storage policies for grain and oil purchases.

 

These enterprises may not hurt farmers' interests by lowering product grades and prices, nor can they disrupt market order by raising product grades and prices, the circular says.

 

Issued by the National Development and Reform Commission (NDRC) and other agencies, the circular states that the rotation of central and local grain reserves can be temporarily deferred if market prices are clearly higher than the minimum purchase prices in order to stabilise market expectations, with the period for rotating empty depots to be extended appropriately after approval is secured in accordance with management authority.

 

Relevant subsidiary companies for central grain reserves and relevant departments must step up efforts to screen and re-examine credentials for purchasing and storing policy-oriented grain and oil, according to the circular. Also, they must manage, track, and inspect the trading of policy-oriented grain stocks and their movement into and out of storage, while putting an end to the practice of "recycling grain, it adds.

 

Enterprises found to have violated laws and regulations will not be allowed to make policy-oriented purchases over the next three years. Purchases that have been made and put in storage will be deleted from statistics on policy-oriented reserves, and costs and interest subsidies will be deducted, it says.

 

China has stepped up efforts to supervise and inspect grain traders in a move to regulate their business activities in order to safeguard normal grain distribution order.