Grain crop heads for ninth year of increase

The nation's grain harvest will increase again this year, the ninth gain in a row, the Chinese Academy of Sciences (CAS) forecast on Tuesday.

The outlook, released by the academy's Center for Forecasting Sciences, suggested that domestic food consumption would continue to rise.

Such an increase might lead to higher agricultural imports, said analysts.

They said that a larger harvest would make it easier for the government to contain food price hikes. Lower agricultural prices globally would help as well by reducing the cost of imports.

The 2012 grain yield will expand by less than 4 million tons to about 575 million tons, assuming there are no excessively severe natural disasters, said the report.

The planted area for cotton was forecast to fall by 8 percent in 2012, which would crimp cotton production, the report said.

Planted areas for oil crops such as soybeans, peanuts and rapeseed would expand "slightly", according to the report.

"Food production in 2012 will benefit from a number of factors, particularly the government's supportive measures and agricultural technologies that have effectively boosted yields," said Yang Cuihong, a professor at CAS.

Domestic grain consumption will likely grow more quickly, with a forecast increase of 9.2 kilograms (kg) per person this year to 432.1 kg, the report said.

Food consumption growth was being driven by accelerating urbanization, analysts said. The urban population outstripped that in rural areas last year for the first time and accounted for 51.27 percent of the total, according to the National Bureau of Statistics. "Urban residents will consume more meat and oil than those living in rural areas. As the population of urban residents increases, more grain will be used (as animal feed) to produce meat," said Hu Bingchuan, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences.

Yang said that agricultural imports were likely to rise in 2012. "More corn and soybeans are expected to be imported this year, to meet the growing demand of the livestock and processing industries," Yang said. But the exact volume of the increase was hard to predict, she added.

The CAS report forecast further declines in global agricultural product prices this year. The corn price was expected to fall by 15.7 percent, while that of soybeans would decline by 9 percent.

"We expect China's inflation rate to stand at about 3.8 percent in 2012," said Yang.

The consumer price index (CPI), a main gauge of inflation, eased to 4.1 percent in December.