December 28, 2010

China's grain reserves close to 200 million tonnes

China's grain reserves total nearly 200 million tonnes, and supplies of wheat, rice and corn are sufficient, Premier Wen Jiabao said over the weekend.

The country's grain output in 2010 increased 2.9% to 546.41 million tonnes, the seventh consecutive year of growth.

China has state reserves of crops as well as temporary reserves built up over the last three years which it uses to smooth out big price fluctuations. It was not clear if Wen was referring to both categories of reserves. It was also unclear if the total included soy.

Although China is believed to be well stocked with rice and wheat, its ability to maintain self-sufficiency in corn is hotly debated. Chinese officials say the country enjoyed a bumper harvest this year but has also shifted to importing corn, and many analysts say the habit will be hard to beat.

Demand for corn from the animal feed industry is soaring, but scarce land and water resources make it hard for supply to keep up, forcing China to import.