China's grain market remains stable

Difficulties

Despite the favorable situation of China's grain market, some problems continue to threaten the country's food security, experts warned.

Xiong Guolin, the owner of a grain and oil company in Jiangxi province, said, "We have heard that international grain prices are soaring, but we can hardly sell all of our grain."

Like Xiong, many small and medium-sized grain enterprises are facing difficulties, as cheaper rice imported from countries such as Vietnam and Pakistan have pinched their profits.

China's raising of the minimum purchasing price for grain has made many grain products more expensive than in many other countries.

From January to July, China imported 8.68 million tons of grains and grain powders, up 261 percent from the same period last year.

Li Guoxiang, a researcher with the Rural Development Institute of the Chinese Academy of Social Sciences, said grain imports should be dealt with in a more reasonable manner.

Properly importing grains helps stabilize domestic food prices, but excessive imports should be limited in order to protect domestic processing enterprises and farmers, Li said.

Despite the price stability of most of grain products, China has seen an increase in the prices of corn, soybeans and edible oils.

In a cereals and oils store in Jiangxi province, soybeans and edible oils have seen slight price increases, with the price of 500 kg of soybeans rising to 3.5 yuan ($0.55) from 3 yuan in July and five-liter bottles of edible oil hitting 71 yuan from 61 yuan in May.

Additionally, China has been relying heavily on corn and soybean imports.

The country is expected to produce 13 million tons of soybeans in 2012, while imports are expected to reach about 55 million tons, according to the Office of Central Rural Work Leading Group.

Moreover, China has transformed from a net exporter of corn into a net importer of corn.

Experts said that in addition to maintaining a balance in total grain production, the country should also pay more attention to the grain production structure and avoid relying excessively on imports.

Experts have also suggested that the country put more efforts into making innovations in agricultural technology and systems in order to maintain a stable increase of grain production.