March 19, 2008

 

China grain reserves at 200 million tonnes, higher than USDA estimates

 

 

China has grain reserves of around 150 to 200 million tonnes, sufficient to keep grain prices under control, premier Wen Jiabao said Tuesday.

 

The figures are much higher than the previous estimates of the USDA which were at 100 million tonnes or one-third of the global grain stocks estimate of 300 million tonnes.

 

Wen disclosed the figures in a news conference as he assured that his government will continue to fight inflation.

 

Escalating food prices have driven China's inflation to nearly 12-year highs.

 

China ordinarily keeps the amount of its grain reserves a state secret and has not previously disclosed the figures.

 

Wen said that ample grain stocks, equivalent to between 30 and 40 percent of China's production last year, would help the government to meet its 2008 inflation target of 4.8 percent.

 

Inflation in February was an annual rate of 8.7 percent.

 

Worldwide, agricultural prices have been lifted to record highs on concerns over tight global supply and dwindling stocks.

 

Analysts said that China's heavy reliance on foreign oilseeds, particularly soy, and slow recovery of pork supply would continue to underpin inflation.

 

Despite the huge wheat and corn reserves, China halted grain exports this year to ensure domestic supply.

 

In February, grain prices rose by a mere 6 percent, following regular releases from state reserves of wheat, rice and corn.