The price of agricultural and sideline products is expected to drop gradually in the fourth quarter in China after price hikes in the past three quarters, according to a report of the Chinese Ministry of Commerce Wednesday.

The ministry predicted the total retail sales would reach 5.2 trillion yuan (628 billion US dollars) this year, an year-on-year increase of 13 percent.

Since the second half of last year, while controlling the overheating of some sectors, the Chinese government stepped up its support of some industries, such as agriculture, transport and energy.

China's grain output has been declining since 1999. Last year's production was 430.65 billion kilograms, 5.8 percent less than the previous year. At the same time, the demand for grain stood at 485 billion kilograms.

Analysts say one of the major factors for the fall is the low price of grain, which dampened the enthusiasm of farmers to grow grain crops and resulted in the marked increase in the prices of agricultural and sideline products, including rice, wheat powder, vegetable oil and eggs.

To stop the decline and ensure food security, the Chinese government implemented incentive policies from the second half of last year, including the raise of grain purchasing price. The government also allocated 11.6 billion yuan (1.41 billion US dollars) as subsidies to grain growers this year.

According to the report, the total grain output this year is expected to hit 455 billion kilograms and grain price to have a year-on-year growth of 20 percent. The prices of food may rise by some two percentage points during the New Year and Spring Festival holidays and then fall steadily.

The total supply of vegetable oil is expected to be about 20 million tons, compared with an estimated consumption of 17 million tons, says the report.

The report also predicted the total retail sales would hit 5.7 trillion yuan next year and the overall consumer price would rise by about 4 percent.

Source: Xinhua