A State Administration of Grain (SAG) official said on Friday grain prices might continue rising this year despite a rough supply-demand balance in China.

"Price pressure for major grains in China this year persists as a result of increasing agricultural costs, soaring prices in the global market and bullish sentiment driven by higher minimum purchase prices," SAG deputy head Zeng Liying told a seminar.

The country raised its minimum purchase prices for rice and wheat twice this year to spur grain production and curb inflation, which hit an 11-year high of 8.7 percent in February.

A bumper summer crop for the fifth year in a row has strengthened the government's confidence in securing supply and easing inflation. Globally, grain shortages are easing as better weather helped increase output in the world's producing areas.

However, Zeng said grain demand would keep rising as the world had 76 million more people to feed during the past five years and a surge in grain-consuming bio-energy development impelled by soaring oil prices increased already voracious demand.

She said the supply of wheat, corn and rice was sufficient in China while that of soybean was not. However, soybean imports would expose the country to global inflationary risks.

In the long run, the country's grain market would be increasingly influenced by the global market, she added.

China has grain reserves of 150 to 200 million tons, according to the Ministry of Agriculture. But the agriculture minister has admitted maintaining near self-sufficiency in grain would become harder as people would demand more diverse and better grain products.

(Xinhua News Agency July 5, 2008)