China able to guarantee corn supply as supply, demand balanced: official

Sept.17th,2010       Visited:      Font Size: Big   Medium   Small

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    (Xinhua) -- China is able to guarantee the supply of corn thanks to a supply-and-demand balance while the market fundamentals do not support excessive rises of price in the second half, a senior Chinese grain official said Wednesday.
    Zeng Liying, deputy director of the State Administration of Grain (SAG), made the remarks at her speech at the fourth International Corn Industry Conference, which opened here Wednesday in Dalian, a port city in northeast China's Liaoning Province.
    Zeng stressed that China is capable of feeding its people through self-sufficient efforts.
    "The grain demand and supply continued to remain basically balanced in China," she said, "we have sufficient supplies, or even some surplus, of wheat and other food staples except soybeans."
    According to the data released by the National Bureau of Statistics (NBS) in July, China's summer grain output, which accounts for about a quarter of the country's annual food yield, was 123.1 million tonnes this year, down 0.3 percent, or about 400,000 tonnes, from a year ago.
    The slight reduction in summer grain output put China's autumn agricultural production under pressure for a good harvest this year.
    "Despite a few uncertainties in the autumn grain production, we managed to increase the area of land under cultivation," Zeng told the conference, which attracted more than 200 officials, grain producers and dealers from home and abroad.
    "It's hopeful that we will still have a good autumn grain harvest this year if no major natural disasters happen," she said.
    As for corn, supply still exceeds demand in China as the corn production has stabilized in recent years, Zeng said, responding to resurging corn prices in the market in recent months.
    According to the SAG figures, corn prices posted rapid increases from March to early May and moved down a little bit in late May as the Chinese government strengthened macro control of corn market to curb speculation.
    The corn prices have picked up their upward trend again since June and hit over 2,100 yuan (about 312 U.S. dollars) per tonne in August on speculation amid mounting inflationary concerns.
    "We have collected abundant corn reserves from the good harvest years in 2008 and 2009," said Zeng, "thus there is no problem at all for us to supply the market."
    As the world's major corn producer and consumer, China produced a record high of 165.91 million tonnes of corns in 2008 and 163.97 million tonnes in 2009, prompting the government to raise the country's corn reserves to 36 million tonnes in the two years to absorb excessive supply in the market, according to the SAG data.
    According to the SAG data, Chinese consumed only 148.35 millon tonnes of corns in 2009, or 15.62 million tonnes less than the annual output in the same year.
    Zeng attributed the price hikes of corns in the first half this year to multiple factors, which include rising planting costs, increasing demands from husbandry industry, estimated reduction in output, frequent natural disasters such as floods and drought, and mounting speculating moves due to reduction of exports by world's major corn producing countries.
    "A mild increase of corn price is reasonable and is good to corn production and protect farmers' interests," she said, "but any upsurge in a short period is abnormal and needs to be prevented."
    "Moreover," she added, "we are hopeful for a good harvest this year too. All these market fundamentals do not support any price upsurge."
    The official said the government will sell part of its corn reserves on the wholesale market to tame price hikes and severely punish market speculations.
    Zeng estimated that China's imports of corns will remain at a relatively low level this year and won't have a major impact on the domestic market.
    According to the Customs figures, China imported a total of 282,000 tonnes of corns in the first seven months this year.