CHINA has raised its minimum purchase prices for rice and wheat for a second time this year to encourage grain production and curb inflation, the National Development and Reform Commission (NDRC) said yesterday.
The increases were announced one day after the government pledged an increase of 25.25 billion yuan (RM11.56bil) to this year’s rural budget, a step aimed at boosting farm production and quelling an inflationary surge blamed on rising food prices and tight supplies.
The NDRC said in a statement that the minimum purchase prices for rice would range from 77-82 yuan (RM35-RM37) per 50kg, while that for wheat would be 72-77 yuan (RM33-RM35).
The previous hike this year, on Feb 8, lifted the minimum prices for rice and wheat to 75-79 yuan (RM34-RM36) and 70-75 yuan (RM32-RM35), respectively.
The NDRC also said that the minimum price system would be expanded to cover the north-eastern province of Liaoning, which would become the third province – after Heilongjiang and Jilin – to have minimum prices.
The Consumer Price Index, in which food prices have a large weight, hit a near 12-year high of 8.7% in February. The government earlier froze prices of grain, cooking oil, oil products and other basic goods in an effort to cool inflation.
Costs of farming inputs, including fertilizers and seeds, have risen, adding upward pressure to farm produce prices.
These new moves will help curb fast-rising prices and ensure sufficient grain supplies to combat inflation, said Song Hongyuan, the deputy director of the Research Centre for Rural Economy under the Ministry of Agriculture.
It sends a signal to farmers that planting crops means making money, which is important because grain prices will only stabilise if supplies are guaranteed, Song said. – China Daily / Asia News Network
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