December 6, 2010

China seeks to raise grain production in the northeast

By 2015, China hopes to raise grain production in the north-eastern provinces of Heilongjiang, Jilin and Liaoning to more than 100 million tonnes a year, according to China's State Council.

The government will also allow the three provinces to trade key agricultural products in which they enjoy production advantages, on the Dalian Commodities Exchange futures bourse, according to a statement posted on the central government portal. It said the futures will be permitted to be launched "in good time," but did not elaborate further.

State-owned grain enterprises have been told to play a "main" role in the three provinces to act as purchasers and sellers, the statement said.

Foreign grain giants such as Louis Dreyfus SAS of France and Singapore-headquartered Wilmar International Ltd. have entered north-eastern China provinces to purchase and process grain, sparking concerns over the safety of grain supply.

The competition for grain is fierce in the three provinces, which are major producers of corn, soy and rice, but foreign companies usually beat domestic ones as they offer much higher prices.

The government will strengthen regulation of exports and imports of major grains including soy, rice and corn, according to the statement.