The Food and Agriculture Organization of the United Nations (FAO) recently released the Food Outlook report, which says that in 2006, the global supply and demand balance for grain pointed to a tight situation. Wheat and maize prices climbed substantially to hit the highest point in the past decade.

In spite of this, a FAO expert pointed out that China's food reserves are sufficient to meet its domestic demand and China is capable of controlling its grain price, the China Securities Journal reported.

According to the expert, Chinese grain market is not subject to impacts of the global situation. The Chinese government recognizes the importance of food reserves as a way to guarantee food safety. When food price is low, the Chinese government buys plenty of grain for stock so that it can use them whenever necessary. Chinese grain production situation was good in the 1980s and Chinese food reserves had increased substantially.

In responding to the concern raised by some countries that China might import large amounts of grain once its food production and reserves drop and therefore affect the global grain market, the expert said that China always relies on itself to solve its grain problem. In fact, China has sufficient food reserves and need not import large amounts of grain from the global market. He said that China is capable of controlling its grain price and the grain price won't fluctuate on a large scale in China.

Last year, FAO and World Food Program (WFP) both predicted that China might begin to import maize in 2010 and the amount of import won't be large. Although China currently has some biofuels program and its animal husbandry industry develops well, China can produce enough maize to meet its domestic demand.

Source:未知