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CORRECTED-UPDATE 1-China says no room for limits on grain imports
February 1, 2013 / 6:27 AM / in 5 years

CORRECTED-UPDATE 1-China says no room for limits on grain imports

(Corrects first paragraph to show official spoke only on import curbs, not targets)

By Niu Shuping and David Stanway

BEIJING, Feb 1 (Reuters) - China will impose no further curbs on food imports this year, a top agriculture official said on Friday, even after foreign supplies hit a record 12 percent of total demand in 2012, putting the country’s self-sufficiency targets in doubt.

China’s decision to hold large stockpiles of key farm products has provided strong support for domestic prices, but also pushed buyers to look overseas for cheaper supplies. Imports at 12 percent of food supplies in 2012 far outstripped a guideline of 5 percent set in China’s five-year farm plan.

Many in the industry were predicting that quotas would be cut in 2013 to stem cheap foreign supplies, but Chen Xiwen, director of the Chinese Communist Party’s top policy making body for rural affairs, said imports would continue to play an important supplementary role in the market.

“We should use both international and domestic markets to ensure farm product supplies and we should not go back to closing the gates,” said Chen, speaking at a news conference.

State-owned commodity trading companies are still waiting for China to announce its import quotas for the year.

China’s efforts to produce enough to feed an increasingly affluent population of 1.3 billion people have become a growing concern for the global grains market, as any spike in its imports could cause global supply shocks.

To calm markets, Chinese officials have stressed that its import volumes remain just a tiny proportion of total consumption. Chen said China’s rice imports amounted to just 1 percent of total domestic demand.

While imports of agricultural products rose strongly in 2012, with corn and rice at a record high, Chen said the surge was largely driven by cheaper international prices and not due to a domestic shortage.

“Grain imports will fluctuate, but the total volume will not change too much. There is a big potential for China to boost its production yields,” said Tang Renjian, deputy director of the Central Leading Group for Rural Work.

“The 95-percent self-sufficiency target will remain for quite a long time,” said Tang, speaking at the same press conference.

The self-sufficiency target did not include soybeans, he said. Last year, China’s imports of soybeans amounted to around 60 percent of total global trade, and met more than 80 percent of domestic demand.

The relocation to the cities of more than 200 million migrant workers in the last three decades has slashed the rural workforce and boosted food demand.

The government has listed grain security and farm product supply as leading priorities for 2013, with Beijing pledging to speed the transfer of rural land to promote large-scale commercial farming.

Pulling small plots of land into larger operations and introducing modern mechanical techniques would help boost productivity and is vital if China’s farm sector is to meet soaring domestic demand.

But efforts to modernise the sector so far have struggled to gain traction because many farmers are suspicious about giving up their land, and even for some mechanised farms, there are too few workers. (Writing by Fayen Wong; Editing by Clarence Fernandez)

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