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China to let market set grain prices

11/26/2013 @ 7:44am

China plans to allow market forces to play a greater role in setting prices in its politically sensitive grain sector, a state media report Tuesday quoted a senior government official saying.

The government currently uses a mixture of support prices and stockpiling to control domestic prices of major agricultural products such as wheat, rice, corn, cotton and soybeans.

However, "the grain market has reached the point where market mechanisms should determine prices," Fang Yan, rural-economy director at the National Development and Reform Commission, told a conference, according to the China Economic Times newspaper.

The government is likely to use one agricultural product as a means to test "market" pricing while "temporarily extending" price controls on other sensitive products such as wheat and rice, Ms. Fang said.

China's recently concluded Third Plenum, which set the development blueprint for the next decade, said market forces would play a "decisive" role in the economy.

Write to Chuin-Wei Yap at chuin-wei.yap@wsj.com

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(END) Dow Jones Newswires

November 26, 2013 01:16 ET (06:16 GMT)

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