China curbs corn biofuel growth amid grain price worries

0 Comments | AFP, December, 2006

BEIJING (AFP) — China has banned further expansion of ethanol production from corn amid concern that the industry's demand for raw materials has fueled record-high grain prices, state media said. The country's top economic planning body has ordered local governments to cease approving any new projects that process corn for biofuel, the official Xinhua news agency said.

The National Development and Reform Commission instead encouraged increased use of non-grain vegetation to make biofuels. Growing demand has fueled a 6.8 percent rise in the price of corn this year and created pressure for farmers to expand corn production at the expense of other needed crops, it said. "Excessive expansion of corn growing will squeeze the production of wheat and rice," Xinhua quoted an unnamed...