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China's grain imports sprout in Jan-Nov (2)

By Zhou Siyu  (China Daily)

16:21, December 18, 2012

But analysts said there is no shortage of the staple crops in China, and so much was imported mostly because of big price differences in the domestic and relatively cheaper international markets.

Analysts also called for the government to let the minimum purchase prices of domestic crops fall, bringing them more in line with international prices.

During the first 11 months of this year, China's grain imports were a whopping 13.4 million metric tons, compared with 4.5 million tons in the same period last year, the latest industry data showed.

Given the country's usual huge imports of soybeans and barley, analysts said the increased imports of these two crops are "within expectations".

Yet some market observers are still worried about the strong increases of imports seen in rice and wheat.

Rice imports in the first 10 months of this year hit a historic high of 1.98 million metric tons, compared with 505,000 tons in the same period last year, according to the General Administration of Customs.

Analysts said the discrepancy in imports was created by the government's minimum purchase price, which shored up domestic grain prices while they declined in the global market because of weak demand caused by the sluggish economic recovery.

"The government should allow the purchase price some flexibility to fluctuate within the international market," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd, one of the industry's largest specialist consultancies.

Ma also said cheap imports are likely to push down the price of domestic rice while piling up the country's stockpiles with domestically grown corps, which is likely to lead to a waste of the grain in processing and storage.

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