November 3, 2009

China will find it hard to reverse its tight supply of grain in 2010 with rice and corn likely to be short supplied but the wheat market can be kept balanced, said a State Council official at the Forum for China 2010 Economy Outlook.

China's rice consumption is maintained at about 180 million tonnes per year. However, its annual rice output has been lower than that of 10 years ago and the global rice trading volume has not surpassed 25 million tonnes in the past 20 years.

Han Jun, director of Rural Research Department under the State Council, said China will continue to ensure the steady growth of grain production next year and guard against sharp fluctuations of grain prices.

Taking this year into consideration, China has achieved bumper harvest for six consecutive years. By end-March of this year, the state-owned enterprises had held grain stocks of 255.4 million tonnes, an on-year increase of 50 million tonnes.

However, Han pointed out that enterprises, traders and farmers currently fail to stockpile much grain and most of the grain supply is in the state depot.

Meanwhile, the Chinese government will provide policy support to stabilise the prices of key farm products such as cotton, hog, vegetable oils and sugar in 2010, Han added.