September 21, 2009

China is expected to lend more support to the development of the grain futures market and in the meantime advise grain enterprises in the proper use of hedging tools against market volatility, said Zhang Guifeng, vice director of the State Administration of Grain, on Thursday (September 17).

As grain futures market plays an important role in price-setting and risk evasion, China should make further efforts to strengthen the futures market to better guide grain production, distribution and consumption, Zhang added.

Soy, corn, wheat, and early rice have become the important crop products traded on China's commodity futures market.

Although the drought has had some impact on grain production in 2009, China's grain supply has remained stabilized, noted Zhang, adding that the country has already reaped bumper harvests of summer grain and early rice.

Zhang said that China's grain security could be totally guaranteed, as there are ample supplies of the major crops such as corn, wheat, and rice. However, the country still needs to import a large amount of soy every year to meet domestic demand.

Last year saw China achieved bumper harvests for the fifth straight year, with the output reaching 527 million tonnes.