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November 14, 2008

 

China says 'no' to large-scale grain exports
 
 

China will not engage in large-scale grain exporting in the near-term in order to ensure sufficient supply for the domestic market, said an official with the National Development and Reform Commission (NDRC).
 

China may allow only small quantities of grain exports next year as the country's grain supply will be tight in the long term, said Zhang Xiaoqiang, deputy director of the NDRC.

 

While the central government is encouraging exports to boost domestic economy, it will not relax its grain exports when grain supplies are expected to be tight in the long term, said Zhang.

 

Current tense situation of supply and demand is here to stay, but the world financial crisis is not expected to affect China's grain production next year, he said.

 

Low domestic corn demand combined with a record harvest this year could lead to a large surplus, pressurising domestic prices and discourage farmers from growing the crop next year.

 

Zhang said NDRC was studying with relevant authorities the proper amount of exports for next year.

 

Meanwhile, the NDRC has released a national grain plan that calls for central and local grain reserves to be kept at a reasonable level. Wheat stocks should not be below 70 percent of total reserves, while soy stocks should be increased.

 

China's self-sufficiency in crop farming is seen to be at risk due to shrinking farmland and water shortages.

 

The plan targets at least 500 billion kg of grain output in 2010, and more than 540 billion kg in 2020. The plan also wants at least 105.3 million hectares of land to be placed under grain farming, and a grain self-sufficiency rate above 95 percent over the next 12 years.

 

Industrialisation and urbanisation have limited China's arable lands, the plan said. Despite so, Zhang said China has no plans to acquire farmland overseas, but will keep its own grain acreage stable and establish a reliable channel in sourcing grains overseas.

 

The government plans to increase subsidies for grain farmers and grain prices gradually each year to narrow the income gap between its urban and rural populations in order to keep farmers on fields.

 

Feed consumption is expected to rise to 187 million tonnes by 2010, or 36 percent of total grain production while meat production is seen to increase to 71.4 million tonnes from 68 million tonnes last year, according to the plan.
 
According to analysts in China, the self-sufficiency plan is geared to make China less dependent on imports from countries such as the US and Australia.
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