Global, local factors could drive China grain prices higher

A State Administration of Grain (SAG) official said on Friday grain prices might continue rising this year despite a rough supply-demand balance in China.

"Price pressure for major grains in China this year persists as a result of increasing agricultural costs, soaring prices in the global market and bullish sentiment driven by higher minimum purchase prices," SAG deputy head Zeng Liying told a seminar.

The country raised its minimum purchase prices for rice and wheat twice this year to spur grain production and curb inflation, which hit an 11-year high of 8.7 percent in February.

A bumper summer crop for the fifth year in a row has strengthened the government's confidence in securing supply and easing inflation. Globally, grain shortages are easing as better weather helped increase output in the world's producing areas.