December 18, 2006

 

China unveils plans to ensure adequate grain supply

 

 

The Chinese government plans to take strong measures to ensure adequate distribution and supply of grain.

 

The move aims to stabilise market prices which have been rising rapidly recently.

 

In an emergency circular issued on Wednesday by the State Council, grain storage authorities were asked to respond rationally to the market prices, and to guarantee the timely provision of grains and edible oils.

 

Inspections and law-enforcement will be strengthened at the main marketplaces to prevent manipulation and speculation in prices, the State Council circular said.

 

The government has already released four batches, a total of 3.8 million tonnes of grain reserves. A fifth could soon be released.

 

Meanwhile, the Ministry of Communications ordered that major highways, railways and ports ensure the quick delivery of grain and related food products across the country.

 

To do so, green passageways would soon be in place to help in speedy transportation of grain and food transportation.

 

According to figures released by the People's Bank of China, grains had seen a price rise of 1.6 percent in November, annualised, edible oil 7.6 percent, and oil-bearing crops 2 percent.

 

The State Council circular also reported that China had three consecutive years of good harvests, 2004, 2005 and this year. The current price rises in grain should generate greater incentives for farmers.

 

However, if prices went up too rapidly, they would affect the livelihood of low-income groups, it said.

 

According to Wang Huijiong, vice-president of the Academic Committee of Development Research Centre of the State Council, under the market economy, it was tough for the government to balance the benefits of both producers and consumers.

 

When comparing urban supplies with the interests of "the much bigger rural population," he said, letting the price increase within a reasonable band could help China solve its rural problems.

 

The release of stocks was however, only a short-term solution to the proble, pointed out Wang Jinmin, a researcher with the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences, adding future grain prices in China could be influenced by other factors on the international market.