China to allow more farm imports

China is poised to allow more agricultural imports as it reassesses food security in a shift that would help exporters from the United States to the Ukraine, according to two people with knowledge of the plan.

A draft of the annual agricultural policy statement shows the government is considering cutting the ratio of the nations total food crop relative to consumption to 80 percent from 95 percent, said the people, who asked not to be identified as the document is still under review. China would continue to grow and stockpile enough rice and wheat to feed itself during any time of war or trade embargo, they said, before the possible release of the final paper later this month.

"Farm output is unlikely to keep pace with food demand over the next 10 to 20 years as more arable land and water are diverted to the industrial economy,'' the official People's Daily said last month, citing Han Jun, the deputy head of the State Councils Development and Research Centre. Even as policy makers in Beijing seek to maintain strategic stockpiles of staple grains, the US Department of Agriculture projects China to be the biggest buyer of soybeans and rice this year, the second- largest purchaser of wheat and fourth-ranked corn importer.

"China recognises the difficulty of continuing to boost output and needs some imports of corn, rice and wheat to help cushion shortages in bad crop years,'' said Feng Lichen, the general manager at Yigu Information Consulting Ltd in Dalian. "Purchases from overseas will be less consistent compared with Japan, the biggest corn buyer,'' Mr Feng said.

The United States is the biggest supplier of corn to China, which last year also took first its bulk shipments from Ukraine and Argentina. North America is a top seller of wheat, along with Australia, while the largest sources of rice to China are Vietnam, Pakistan and Thailand.

China's food imports by volume increased in 2013 while output of grains including rice, corn and wheat advanced for the 10th straight year, to 601.9 million metric tonnes, data from the National Bureau of Statistics and the General Administration of Customs show.

Much of a 5.9% gain in corn production last year went into animal feed along with domestic soybean output and imports, as the Chinese adopted higher-protein diets and ate more meat, according to official forecaster China National Grain & Oils Information Centre.

The structural difficulties facing China's grain supply are more and more obvious, said Han Jun, according to the People's Daily.

China is likely to continue accepting a high level of soybean imports, which rose 8.6% from a year earlier to 63.4 million tonnes in 2013, Mr Feng said.

The government controls grain imports by issuing quotas it agreed to as a condition of joining the World Trade Organisation a decade ago. They include 7.2 million tonnes a year for corn, 9.6 million tonnes for wheat, and 2.66 million tonnes each for short- grain and long-grain rice, according to the National Development and Reform Commission.

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