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By Diao Ying (China Daily)
Updated: 2008-04-05 09:13

A customer shops for rice at a supermarket in Beijing. [China Daily]

The cost of rice remains stable, despite the staple food's worldwide price hike, government sources said.

The grain's price is stable in China, the National Development and Reform Commission said on its website. Meanwhile, the Ministry of Commerce said the rice retail price has seen a "continual decline" in the past week.

Rice is a staple food for Chinese, but its price isn't influenced by the world market as the nation mainly relies on domestic supply rather than imports to meet demand, traders and agricultural experts said.

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China only imports a small amount of rice for the high-end market, according to Li Chenggui, an agricultural expert with the Chinese Academy of Social Sciences. "But the amount of rice China imports from Thailand is very small, so the higher price won't affect the overall situation," Li said.

Rice from Thailand and Vietnam, the world's major exporters of the product, has seen a sharp price increase, causing turmoil on the global market.

Rice shortages have been reported in many countries and consumers have begun stockpiling the product.

The cost of a ton of medium-grade rice from Thailand has more than doubled since the beginning of the year. A Thai government official recently said prices could rise higher still, according to a Wall Street Journal report.

But consumers and the business community in China remain calm. One trader in Panjin, a key rice-producing area in Liaoning province, said the price has actually dipped slightly this year.

The Panjin Zhongjin Rice Co trader said the price hasn't changed much in the past two years. "Rice is actually cheaper now compared with the winter," the trader, surnamed Su, said. That price drop could be due to an increase in the area available for rice paddies after the government encouraged farmers to increase supply, Su said.

China has long been a major rice exporter on the world market, but late last year the government began curbing exports to ensure domestic supply.

The government in December removed the export tax rebate for a series of agricultural products, including wheat and rice.

Meanwhile, it's also increasing subsidies to farmers to increase supply. It has increased the minimum State purchase price twice this year as an incentive for farmers.

The government has also been trying to keep a lid on the market price by enlarging State reserves. The Liaoning trader said the local grain reserve agency is still buying the grain - usually it only buys rice during winter.