China is holding 100 million tonnes of wheat stocks, around the same amount as its annual output, a top economic planning official said March 6, reiterating Beijing’s resolve to keep grain prices in check.
In a rare statement of the country’s grain stocks, Zhang Ping, head of the National Development &Reform Commission (NDRC), the country’s top economic steering body, said China’s grain reserve was about 40 per cent of its annual consumption.
That was higher than the 17 to 18 per cent considered a normal level globally, said Zhang. Wheat inventories were also significantly above analysts’ estimates, which put stocks at 60 million tonnes. China is the world’s biggest wheat producer.
“These figures show we’ve got abundant grain stocks, which sets a solid foundation for us to keep grain prices basically stable,” Zhang told reporters at China’s annual parliamentary meeting.
Inflation, to which rising food prices have been the biggest contributors, is one of Beijing’s policy priorities this year.
Chen Xiwen, deputy head of the central government’s rural work leading panel, said drought in China’s major wheat-producing areas would have a limited impact on the winter wheat crop, which accounts for only 20 per cent of the country’s total annual grain output.
China’s grain output normally includes wheat, rice, corn and soy. Chen also said he was confident China’s grain prices will be “basically stable” as a result of government measures including boosting production.
China’s grain prices rose by less than 20 per cent year on year since the start of 2011, while global grain prices surged by 100 per cent during the same period, he said.
Some traders and analysts saw China’s drought a sign of a possible weakening in its wheat position, which helped spur U.S. wheat futures.
Chinese officials have repeatedly stressed China’s overall grains self-sufficiency and said the country holds abundant wheat stocks.
“The unfavourable factors (from the drought) can be eliminated through efforts,” Chen Xiwen told the press.
Rainfall since the Lunar New Year holiday last month has helped relieve most of the wheat-growing areas that had been affected by drought, Chen said.
The country’s State Administration of Grain said last week China may still reap another bumper harvest this year despite a winter drought in main growing areas.