(Yicai Global) March 25 -- China will do everything possible to help local governments guarantee a bumper summer harvest of wheat, soybeans, rice and other grains, according to the ministry of agriculture.

The central government will issue financial incentives such as one-time subsidies to farmers to help offset the rising cost of planting grain brought about by the surge in prices of agricultural materials, the Ministry of Agriculture and Rural Affairs said on its website.

It will increase allowances to grain producers across the country, such as by hiking subsidies for insurance, and boost investment in prevention and disaster-relief efforts to ensure a good harvest, it said.

The government will also support the adding of 6.67 million hectares of new farmland to increase the planting area and it will raise the minimum purchase price of rice and wheat to encourage farmers to plant more.

Global food prices have skyrocketed as nations rush to stockpile amid uncertainties arising from the conflict between Russia and Ukraine, both major producers of corn and wheat. China is the biggest importer of Ukrainian sunflower oil and the second largest buyer of its corn.

The Russia-Ukraine conflict could do great damage to the two countries’ agricultural zones, raise food inflation globally and hike China’s import costs of some grain varieties, CITIC Futures’ team of agricultural products said earlier.

The price of wheat, corn and soybean futures have jumped 31 percent, 32 percent and 20 percent since the beginning of this year to a five-year high at the end of February, according to the Chicago Board of Trade.

This in turn has pushed up prices in China. The price of flour jumped 24 percent at an agricultural market in Zhengzhou, capital of central Henan province, to CNY2.48 (USD0.39) per half kilogram on March 12 from the week before. And the index of China’s wholesale prices for grain and oil products climbed to 116.05 on March 17 from 113.60 on Feb. 25, according to MARA figures.

China is the world’s biggest soybean consumer, and while it can produce enough for household consumption, it still has to import large quantities which are mainly used to make edible oils and animal fodder, the Minister of Agriculture and Rural Affairs Tang Renjian said last month.

China, though, is not dependent on wheat imports, which made up just 7.1 percent of its 137 million tons of production in 2021, according to official data. However last year’s imports jumped 16.6 percent to a record high of 9.77 million tons.

China is not short of wheat and the main reason its imports wheat every year is to introduce high-quality varieties and to provide a balance between shortage and surplus, Lin Zhanjiang, a wheat trader, told Yicai Global. Therefore, the hike in international grain prices will not have a big impact on China’s food security, he added.

Editor: Kim Taylor