August 24, 2010

Foreign expansion poses threat to China's grain industry

Foreign grain merchants have started accelerating expansion in the Chinese grain processing industry, which stoked fears that the country's grain safety is increasingly compromised, a report said.

The fact that foreign grain companies were snapping up wheat in North China and rice in South China at high prices, showed that these foreign enterprises were reinforcing their presence in the Chinese grain market, it said.

Chinese grain processing industry which is generally scattered, chaotic, complex, and small would face increasing foreign competition, and it was urgent for the nation to integrate domestic grain companies via government policies and measures, the report added.

However, an official at the National Development and Reform Commission said that the international grain prices were much lower than the prices on the domestic market, so even if the international wheat price grew steeply, it would not hit domestic prices.