By Tu Lei (chinadaily.com.cn)
Updated: 2007-07-12 11:23

Figures from the National Development and Reform Commission (NDRC), China's top economic planning agency, show that the average purchase and distribution prices on grain, wheat and corn in June increased slightly compared with last month.

In June, the average purchase and distribution prices on grain, wheat and corn per 50 kilograms were 76.8 yuan (US$10.15) and 79.7 yuan, both up 0.9 percent from last month.

But the average purchase price for wheat dropped by 1.5 percent to 72.6 yuan per 50 kilograms because new wheat hit the market.

Compared with last month, the purchase and sale price of corn per 50 kilograms were 71.2 yuan and 74.3 yuan, up 3.3 and 2.7 percent respectively, and soybean saw increases of 3.1 and 3.4 percent in purchase and sale price as well to reach 143.2 yuan and 148.3 yuan respectively.

In wholesale markets, the prices for rice, wheat, corn and soybean have grown by 2 to 17.6 percent over the same period of last year.

Grain prices in the international market also saw sharp rises in June. Figures show that prices of rice, wheat, corn and soybean futures were up 5.1, 53.2, 72 and 39.9 percent respectively year on year.

An anonymous official from the NDRC said the growth in the biofuel industry in developed countries has pushed up demand for corn and soybean, resulting in sharp rises in international grain prices. These price rises have, in turn, spilled over into the domestic market, contributing to price hikes in meat, eggs and cooking oil.

The prices of most agricultural products including grain, wheat, corn and pork are lower than that of 10 years ago, while the feeding costs including labor continue to increase, causing a price hike in agricultural products, he added.

China's consumer price index(CPI) in June may has risen 4 percent from a year earlier due to the higher food prices, making it the strongest inflation reading since October 2004, domestic securities analysts noted.

For the January-May period, China's CPI increased 2.9 percent. In May alone, the CPI reached a two year high of 3.4 percent after rising 3.1 percent in March and 3.0 percent in April.