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Lawmaker: Corn Supply and Demand Balanced in China

The domestic corn supply and demand are so far balanced in China and there have been no abrupt large corn imports yet, said a Chinese lawmaker from northeast Jilin Province, a major corn granary.

With an annual output up to 20 billion kilograms, Jilin will not expand the downstream corn processing industry, following the central government's policies, said Han Changbin, the provincial governor attending the annual session of China's top legislature.

Corn, a main feed to pigs, will drive up prices if falling short of supply, Han explained.

Last year, the country's consumer price index (CPI), the main gauge of inflation, rose 4.8 percent year-on-year, its fastest pace in 11 years, and surging pork prices were cited as the major factor driving up the figure.

Currently, 80 percent of the corn processing enterprises in Jilin produce feed and food, and only a very small part of them make fuel ethanol or other chemical products, Han said.

Premier Wen Jiabao said on Wednesday that the country "must strictly control industrial use of grain and grain exports".

This was one of the nine measures to curb the overall price level from rising rapidly in the government work report Wen delivered at the opening meeting of the annual full session of the National People's Congress (NPC).

When China saw a strain of pork supply last year, Jilin alone provided 22 million live pigs, thanks to its rich corn production, and helped prevent pork prices from soaring further, Han said.

So far, corn prices in Chinese market are not high, and it's of little possibility that farmers will turn to grow soybean by cutting corn planting greatly, given the local soil conditions and farmers' planting skills, Han said.

Fueled by US dollar depreciation, soybean and soybean oil prices on the international market have hit record high in 19 years and 33 years respectively, which also boost domestic soybean and soybean oil prices.

Jilin will try to raise its annual grain output from current 25 billion kilograms to 30 billion kilograms through improving soil and upgrading irrigation in five years, when the corn yield is expected to rise to 22.5 billion kilograms, Han said.

(Xinhua News Agency March 8, 2008)

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