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China's grain supply is fully secured and the "grain reserve crisis" is groundless, according to the head of the State Administration of Grains.

"China's grain reserve has kept a relatively high level, so the grain supply is fully secured. There is no so-called grain reserve crisis in China," said Nie Zhenbang, director of the State Administration of Grains.

He said the country produced 501.5 million metric tons of grain in 2007, the fourth consecutive year of increase, despite months of severe drought.

Nie, a member of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC), made the remarks on the sidelines of the annual full session of the top political advisory body.

Report from the UN's Food and Agriculture Organization revealed recently that the proportion of the global grain storage and consumption dropped to 20 percent, the lowest in the past 30 years. The British Financial Times predicted in a recent report that the subprime crisis would be followed by grain produce reserve crisis.

Nie admitted that it would be more difficult to keep the domestic grain market and price stable given the decrease of infield and fresh water resources as well as the uncertainty of international grain market.

"The capacity building of the grain reserve security, therefore, should be intensified and great efforts should be made to increase the macro-control of the grain reserve," he said.

In particular, he emphasized that the emergency-aid system for the grain reserve should be perfected to cope with the unexpected disastrous climate like the snowstorms that started to hit eastern and southern China in mid January.

"The finished grain and oil reserve has played a key role in emergency aid in worst-hit areas given that the lasting frost and traffic and electricity break-off prevented the raw grain from being processed timely," the official said.