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Wednesday, March 12, 2008

Feeding the Agriculture Bulls in China

China Should Ban Grain Exports, Senior Official Says

SHANGHAI (Interfax-China) -- China should ban grain exports, a senior official said at the panel meeting session of the Chinese People's Political Consultative Conference in Beijing late last week.

Suspending all grain exports this year would help assure domestic supplies, Chen Xiwen, assistant director of the Central Finance and Economics Leading Group Office and director of the Central Rural Work Leading Group Office, said.

Chen's suggestion reflects growing concerns that China's limited agricultural resources are unable to keep up with the rapid growth of domestic demand. China feeds 20% of the world’s population with only 7% of the world’s land resources. The country's population continues to grow, despite the strict one-child policy, as arable land is lost to rapid urbanization and industrialization.

XX My take -- China's agriculture exports are small anyway, but this kind of panic on the part of a Chinese official will likely feed bullish sentiment in the global agriculture markets. China has been selling us their junk for years. Wouldn't it be sweet if we helped the balance of trade by selling them more and more grain?
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