China's move to control the industrial use and exports of grain to curb domestic price increases will contribute to the stability of the world grain market, an analyst said.

Premier Wen Jiabao said on Wednesday the country "must strictly control industrial use of grain and grain exports". This was one of the powerful measures that would be taken to prevent the overall price level from rising rapidly.

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. Food prices surged 12.3 percent, accounting for 4 points of the 4.8 point CPI rise.

Exports of wheat, corn and soybean rose by 206 percent, 85 percent and 24 percent, respectively, in the first 11 months last year, customs statistics showed.

"The rapid growth of grain exports led to the continuous rise of domestic grain prices last year, making it an important factor for driving the CPI," said Cheng Guoqiang, the Development Research Center's Market Economy Institute deputy director.

"China has a huge consumption of grain. The country's grain prices are an important index for the world grain market. If China's grain prices are unstable, the world grain market will also be affected."

To control grain exports would help prevent the rise of commodity prices domestically and stabilize the world grain market, the analyst said.

(Xinhua News Agency March 7, 2008)