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Ample food reserves can feed market needs

By Zhao Huanxin (China Daily)
Updated: 2006-12-13 09:34

The government has "ample stocks" to meet market demand amid sharp price rises of some major food items, officials told China Daily yesterday.

"We have sufficient grain reserves supply can be ensured," Yao Xiumin, deputy chief of the Macro-Management Department of the State Grain Administration, said.

In major Chinese cities, prices for top-grade flour rose 7 per cent in early December from a month earlier, with soybean oils increasing by about 16 per cent, according to official statistics.

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"It is not unusual to see prices go up before the Spring Festival, and the purpose of macro controls is to cap them from rising too much," Yao said.

The government procured at least 41 million tons of wheat, or 40 per cent of the country's total output, for supply to the urban market, according to officials. Farmers do not usually count on State reserves for food supplies.

Another factor likely to keep prices in check are good harvests anticipated this year for all major grains, except for paddy in Southwest China's Sichuan Province and Chongqing Municipality because of drought, according to Wang Jianlin of the National Meteorological Centre.

To control price rises, Yao's agency and the National Development and Reform Commission have approved the auction of 3.8 million tons of grain reserves since the end of November.

China is capable of keeping the food prices from "spiralling" by selling State reserves, Yao said, but declined to specify the size of the reserves.

There might have been certain delays in sales of wheat reserves, procured exclusively by China Grain Reserves Corp, which could have led to price rises since October, said Wang Xiaobing, an official with the Ministry of Agriculture.

Wang, division director with the ministry's Crops Cultivation Department, said that as long as the reserves are released at a "reasonable pace," there would be no problem with supplies; and prices would remain at a reasonable level.
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