Despite the drought that has wrought havoc this year, the country is set to
reap a bumper summer grain harvest and see its price stabilize, analysts have
China will harvest more summer gain crops this year than last despite many
adversities, such as drought, frost and insect pests, Minister of Agriculture
Sun Zhengcai said during an inspection visit to North China's Hebei Province
over the weekend.
Summer crops normally account for 20 percent of China's annual grain output.
Wheat accounts for 90 percent of the summer grain crops.
As supply increases, prices are expected to go down. But given the
government's effective regulation of the grain market, prices will not fluctuate
much in the wake of the summer harvest, Li Chenggui, a researcher with the rural
development institute of the Chinese Academy of Social Sciences, said.
China will continue to apply its minimum grain purchase price system this
year, which will prevent the prices from falling dramatically, Li said.
"Last year, the system contributed 4.5 billion yuan ($590 million) toward
farmers' incomes," he said.
last year, however, urban communities have been worried about rising grain
prices and the trend has continued until today.
The crops that have seen their prices rise most are wheat and corn. The
former is thanks to the market-stabilizing measures of the State through the
China Grain Reserves Corp (Sino Grain) while the latter was caused by the jump
in demand as a result of the soaring industrial processing of corn.
Corn price rises will put much pressure on the stock-raising industry and
increase the price of meat, Guo Qinghai, an agricultural professor at Jilin
Agricultural University in Northeast China's Jilin Province, said.
"The State must step in to stop it."
The State has stopped approving new projects which use corn for making
"If the government strictly controlled the industrial use of grain, the
normal demand level would not lead to continuous price rises," Li said.
For wheat, Li said, the State can adjust market supply as
it chooses because it holds the bulk of the crop through Sino Grain.