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Experts: China Likely to See Steady Price Rises for Rice

Prices of rice on the Chinese mainland are to largely remain stable with a modest upward trend in the coming months, Chinese experts believe.

Chen Yao, head of the Heilongjiang grain association, a major cereal growing area in northeast China, said on Tuesday that factors behind further paddy price rises included government policies to support agricultural production and the mounting costs of paddy growing and processing.

Chen noted price rises on international rice markets and short supplies worldwide would increase farmers' and traders' resistance to selling, and that frequent natural disasters across the mainland would possibly trigger a rice dearth in some areas.

China was predicted to produce 185.7 billion kilograms of paddy this year, a growth of 210 million kg, or 0.11 percent, from 185.49 billion kg last year, according to Chen.

The slightness of the change would deprive paddy and rice prices of conditions to rise sharply, Chen said, adding that the prices would linger at a high notch with a steady upward trend.

The Chinese government said early this year that the nation's grain reserves were at 150 million to 200 million tonnes, including 40-50 million tonnes of rice.

According to Zeng Liying, deputy head of the State Administration of Grain, the sufficient storage would help maintain the stability of domestic supply and prices.

However, she said, in the longer term, the limited resources of farm land and fresh water nationwide, together with growing population, which was already the world's largest, would leave China in a fragile balance between demand and supply of paddy and rice.

Bai Meiqing, head of China National Association of Grain Sector, said China's paddy and rice production was still beset with two major problems: one was that production was yet to return to a record high level, and the other, processing still fell behind the world's most advanced standard.

(Xinhua News Agency July 8, 2008)

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