Grain prices in the Chinese market are stable but still face upward pressure, said Zeng Liying, the deputy director of the State Administration of Grain (SAG), the Official Shanghai Securities News reported Friday.
According to Zeng, this year’s total grain output will be around 500 million tons, with summer grain output rising 2.5 million tons from last year to 120 million tons and autumn grain output also expected to increase slightly.
This year’s total grain demand will also continue to rise to around 517.5 million tons so China will still need to import grain to fill the gap, Zeng said.
Zeng noted that state grain reserves will remain at relative high levels this year and the government is more than capable of guaranteeing stable grain prices.
However, domestic grain prices are still facing inflationary pressure. The rising cost of grain production caused by surging input costs and the hike in the international grain price have added to the pressure on domestic grain prices to rise. Another contributing factor is that market expectations have been raised by higher minimum purchase prices set by the government.
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(China.org.cn by Yan Pei July 4, 2008)