November 16, 2010

China's good grain harvest said to stabilise prices

Grain prices had jumped after the food supply dropped in Russia and Brazil, but the great harvest in China will help to stable grain prices, analysts said.

As of November 8, China has fall-harvested 94.5% or 1.10 billion mu (1 mu = 1/6 acre) of grains, while the harvesting work of mid-season rice, corn and soy have basically ended, said the ministry of agriculture.

China has seeded 82.2% or 582 million mu of winter crops. It finished seeding 319 million mu of winter wheat, which equals to 92.9% of the planned area. A total of 95.1 million mu of fields have been seeded with winter rape, completing 88.8% of the plan.

The rise in China's grain price was partly influenced by the global grain price surge. The price hike of other assets such as properties and iron ores has also added fuel to the grain price growth, said Wang Xiaoyu, deputy secretariat of Heilongjiang Soybean Association.

In addition, higher labour cost, rising commodity prices on the international market and perceived reduced supply of grain also make matters worse, experts said.