"The import and export structure reflects the comparative advantages of the country and also China's intention of making use of global agriculture resources," Cheng said.

But he said that the world food trade framework had experienced profound changes.

Major food producers including the US and the European Union have adjusted their agriculture policies and increased their allowance to farmers to sharpen their competitiveness in the global food market, he said.

Cheng also said that global food competition could lead to the concentration of resources in the hands of several transnational food giants.

He called for an urgent policy from the central government to protect the country's soybean sector from being totally manipulated by global food giants.

4 ethanol plants under way

Four non-grain-based ethanol plants are under construction to strike a balance between an increasing appetite for ethanol and worsening food supply,

The projects are in the autonomous regions of Inner Mogolia and Guangxi Zhuang and the provinces of Hebei and Shandong.

They boast an ample supply of cassava and other bio-materials, which can be manufactured into ethanol with less cost and little environmental impact, according to experts at a food seminar in Kunming yesterday.

The four currently State-approved ethanol plants, with a total annual production capacity of 1.2 million tons, are in Northeast China's Heilongjiang and Jilin Provinces, East China's Anhui Province and Central China's Henan Province. They mostly use corn.

The plants were set up in 2000 to make use of an abundant supply of old corn. However, supplies have dried up and they now have to rely on fresh corn. This has caused a shortage in the market forcing a 15-percent price rise.

The annual production capacity of the new plants will be about 7.5 million tons by 2015, according to an expert with a State food watchdog.

China National Cereals, Oils & Foodstuffs Corp (COFCO), is building the four new plants. It also has a stake in three of the existing plants.

"COFCO will hopefully get 70 percent market share of ethanol production within three years," Yang Hong, manager with the department of wheat under COFCO, said.

According to Cao, with the operation of the new plants, the proportion of corn in ethanol-production will drop from the present 90 percent to 70 percent after 2009.

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