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Economic agency says China's grain stocks sufficient
2008-05-06
SHANGHAI, China -- China has enough grain to keep food prices steady, the country's economic planner said Tuesday amid reports authorities were struggling to prevent the smuggling of rice and wheat to overseas markets.China views basic self-sufficiency in staple grains such as rice, wheat and corn for its 1.3 billion people to be a national strategic priority, and with grain prices soaring internationally it is moving to ensure domestic supplies and curb exports, the National Development and Reform Commission said in a statement on its Web site. The comments, published in the form of a question-and-answer session with an unnamed official, emphasized Beijing's ability to keep grain prices stable after four straight years of bumper harvests. "Our grain supply and demand is basically steady, our reserves are full and we can guarantee the supply and stability of grain prices," the statement said. It said reserves alone could meet demand for six months. China subsidizes grain farming to encourage an adequate supply and controls prices for rice and some other agricultural staples, creating a gap with international prices. The government has also boosted payments to grain farmers and is shifting grain from grainbelts in the north to heavily populated southern areas where consumption outstrips production. But rising food prices helped boost the country's inflation rate to a nearly 12-year peak of 8.7 percent in February. Like consumers elsewhere, Chinese families are feeling the pinch of higher prices for food, which accounts for half of spending for many families. The jump in food costs has unnerved the country's communist leaders, given the public protests that followed bouts of inflation in the 1980s and '90s. Customs department reports said Tuesday that authorities in various regions were cracking down on illegal grain exports by traders hoping to profit from surging international prices. Eight such shipments, totaling almost 7 tons of rice and 163 tons of wheat, were caught in the past several weeks, according to a report posted on the Web site of the Customs Administration. A customs official in the eastern city of Hangzhou, who gave only his surname, Wen, confirmed the report but would not discuss details. Similar customs raids were reported from Yunnan, which borders Vietnam. China's Customs Ministry has also warned that it will scrutinize exports to Hong Kong, which depends on the Chinese mainland for much of its food supply, to ensure grain is not diverted to other markets. Internationally, rice prices have more than doubled this spring while overall food prices have risen by 83 percent in three years, according to an estimate by the World Bank. Surging prices have sparked riots in Haiti and several African countries, while raising worries over supplies in the Philippines. According to estimates by the U.N. Food and Agricultural Organization, China's grain production is expected to rise 0.2 percent to 390.2 million tons this year from 389.2 million tons in 2007. China consumed 185 million metric tons of rice last year, about even with its production. The government ended tax rebates for exports of rice, wheat, soybeans and corn late last year and imposed tariffs of up to 25 percent on exports of 52 food products, including major grains and soybeans, to discourage sales overseas.
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