China started a temporary quota policy on the export of wheat, corn and rice flour on Tuesday, in order to guarantee an adequate domestic supply.

The adjustment aims to curb grain exports boosted by climbing international prices, and stabilize domestic food prices, said an announcement on the Ministry of Commerce website. The details of the quota are unspecified, but it will be implemented through a permit policy.

The period of the policy will be decided by the demand and supply situation of related domestic markets, the announcement said. The step added to a string of government measures to rein in food price inflation driven by shortages of items such as pork, edible oil and grain.

China's Ministry of Finance announced on Sunday that it would levy export taxes on wheat, corn, rice, soybeans and various processed grains in 2008, just a week after China scrapped tax rebates for grain exports.

The export tax rates will range from 5-25 percent and affect 57 types of grain and grain products.

Several factors have driven up global grain prices this year: rising demand, adverse weather in key growing nations and increased use of grains for fuel.

Wheat prices hit a record high in Chicago on strong global demand and shrunken output after bad weather hit the world's major producers such as Australia and Canada.

Buoyed by demand from the ethanol industry, prices of corn have also risen. By Friday on the Chicago Board of Trade, the price of corn for March delivery rose to US$4.55 a bushel from US$4.43 the previous week.

The nation exported 4.87 million tons of corn in the first 11 months of 2007, up 85.3 percent from the previous year. Exports of rice rose 5.8 percent to 1.13 million tons and exports of wheat soared 206.51 percent to 1.85 million tons.

"The grain supply and demand is generally balanced in China after four years of bumper harvests," the announcement said, adding that the policy was only to guarantee domestic food security.

(China Daily January 2, 2008)