Statistics from the General Administration of Customs show China imported 10.78 million tons of wheat, corn and rice in the first 11 months of 2012, up 294.5 percent from a year earlier. The dramatic rise prompted critics to claim that the country's grain self-sufficiency rate may drop below the government-designated warning threshold of 95 percent. Some have gone as far as saying the surge may threaten global grain supplies.

Experts said the claims are groundless, adding that increased grain imports have not jeopardized China's grain security. The increase, a normal phenomenon in an open market, was mainly attributable to structural factors. In order to ensure grain security, the country should continue to maintain self-sufficiency in staple food with moderate grain imports by making full use of domestic and foreign market resources.

A three-fold increase

China has become the world's second largest rice and barley importer as well as one of the top 10 corn importers and top 20 wheat importers due to the surge in grain trade last year. In this context, there have been concerns that China's grain self-sufficiency is under threat. Moreover, foreign critics are worried that the country's grain demand may lead to global food shortages.

Ministry of Commerce spokesperson Shen Danyang said China has set import quotas for wheat, corn and rice based on food security requirements and possible impact on global markets in accordance with its WTO commitments. The country's imports of the three types of grain in the first 11 months of last year accounted for less than 50 percent of their quotas and were within a reasonable range despite the sharp increase.

China imported 10-13 million tons of wheat alone each year between the mid-1980s and the mid-1990s when the country suffered tight grain supplies, so there is nothing "crazy" about importing 13.4 million tons of grain in the first 11 months of 2012, said Cheng Guoqiang, a researcher with the Development Research Center of the State Council. The amount accounted for only 4.7 percent of global grain trade, which totals 280 million tons. It is roughly the same as South Korea's annual grain imports, 60 percent of Japan's and 2.6 percent of China's annual grain consumption of 520 million tons. It is of little statistical significance to pay too much attention to year-on-year data, Cheng said.

Structural factors

The sharp increase in China's grain imports in 2012 reflected normal business operations and market demand, Shen said, adding there are three reasons. First, foreign grain prices dropped last year, making domestic companies willing to import grain. Second, domestic demand for animal feed, particularly corn, for which supplies were tight, increased. Third, relatively small grain imports in 2011 provided a low base.

Market analysts believe that low prices of foreign grain contributed largely to the surge in China's grain imports last year. Li Guoxiang, a researcher with the Rural Development Institute at the Chinese Academy of Social Sciences, attributed stable domestic prices to the substantial increase in the country's grain imports. The regulation of imports and exports helps China stabilize prices and realize its macroeconomic goals. It does not mean the country is highly dependent on foreign grain.

Cheng noted increased grain imports aimed to adjust China's grain structure with the help of the international market. The domestic market is well managed and open, and structural adjustments require the import of competitive products. Furthermore, the quantity of grain imports was within a normal range, compared with that of previous years.

Bi Meijia, Chief Economist at the Ministry of Agriculture, said the increase in grain imports was intended mainly to meet the diverse domestic consumer demand. The proportion of grain for animal feed and industrial use in total imports is on a steady rise. It is also necessary to import high-quality rice and wheat to meet domestic needs.

Grain security

Experts share the view that although increased grain imports have not undermined China's grain security, ensuring such security is an arduous long-term goal to which the populous country should give top priority.

Cheng said in light of its basic national conditions such as a large population, insufficient farmland and agricultural resource shortages, China should adhere to a well-structured strategy to ensure grain security. On the one hand, it should not waver in guaranteeing the self-sufficiency of staple food with a focus on rice and wheat so that the nation can feed itself by relying on domestic supplies. That's why the government has set a grain self-sufficiency threshold of 95 percent. On the other hand, China should use domestic and international resources in a balanced way. It can be a moderate and stable importer of grain products such as corn and soybeans as well as resource products with which to diversify grain varieties on the domestic market and alleviate the pressure of agricultural resource shortages. China should devise plans as soon as possible for the establishment of a sustainable, stable and safe global agricultural product supply chain.

Cheng stressed basic self-sufficiency does not call for an end to grain imports. An excessively high self-sufficiency rate is not only unrealistic, but will also force China to pay high resource, environmental and economic costs.

Given the fact that of China's 1.83 billion mu (122 million hectares) of farmland, only 800 million mu (53.3 million hectares) are top-grade farmland with a high resistance to draught and floods, there is a need for moderate grain imports, said Xu Xiaoqing, Director of the Research Department of Rural Economy at the Development Research Center of the State Council.