China

Yield to be increased to counter price surge

By Jin Zhu (China Daily)
Updated: 2010-11-23 08:05

A farmer loads tomatoes onto his motorbike for transport in Tianyang county of Baise city, the Guangxi Zhuang autonomous region, on Nov 18. Tianyang is a main supply area of vegetables to North China. Mo Youhe / Xinhua

BEIJING - The planting area of vegetables across the country is to increase year-on-year by 7 percent this winter as part of the central government's efforts to drag down the increasing prices of agricultural products.

The Ministry of Agriculture on Sunday announced that the total planting area of vegetables this winter will reach about 8.3 million hectares, up 0.53 million hectares over the previous year.

The move is part of coordinated efforts by the central government to head off the recent price rises.

To increase the market supply and ease the pressure for further price hikes, the State Administration of Grain on Friday said that from this week it will sell a set amount of cooking oil and soybeans from government reserves, in addition to the weekly sales of reserved wheat, rice and corn that have already begun.

The administration will also send officials to the country's major grain production regions to inspect and guide the purchases of autumn grain and to regulate business practices, it said.

The State Council has also urged local departments to reduce delivery costs, while vehicles transporting fresh and live farm products will be exempted from road tolls starting Dec 1.

The consumer price index (CPI) in China, a key gauge of inflation, surged 4.4 percent in October from a year earlier, reaching a 25-month high, according to the National Bureau of Statistics. Some analysts have predicted the figure may rise to nearly 5 percent in November.

The rise was mainly due to a 10.1 percent surge in food prices, such as grain and vegetables. Food prices have a one-third weighting in China's CPI calculation.

In particular, the wholesale price of garlic in 36 cities across the country rose 95.8 percent on average, while ginger rose 89.5 percent during the first 10 days of November, data from the Ministry of Commerce showed.

Lu Bu, a researcher with the agricultural resources and regional planning institute at the Chinese Academy of Agricultural Sciences, said cold weather and heavy rains this year had led to vegetable shortages, but this was not the main reason for the current price rises.

"In some regions of South China, such as Hainan and Guangdong provinces, vegetable output decreased greatly as rainstorms hit, but the loss was negligible compared with the total vegetable output of the country," he said.

Analysts believe that the latest actions by the central government were designed to combat price hikes by increasing grain and vegetable supplies and clamping down on hoarding and speculation.

"It's the first time that the Ministry of Agriculture has announced that it would increase its vegetable planting areas in winter. And such measures may last for the next few years, as the rises in vegetable prices are likely to continue," Lu said.

China Daily