As prices of major agricultural commodities, including rice, wheat, corn and oilseeds, started soaring in mid-October, fears were raised of a grain shortage and possible inflation as a result.
The price rises are due to decreased grain production and market speculation that saw prices for products such as edible oils rise as much as 86 percent in the space of three days.
China's food supply is safe due to extensive government reserves but the rapid rise in grain prices is expected to lead to higher food prices and a jump in the consumer price index (CPI).
The government is reassuring the public that this will not lead to inflation like that seen in the early and mid 1990s and state media reports indicate that the government would be willing to intervene to head off a steep rise in food prices.
With many sectors apparently experiencing oversupply rampant inflation is seen as less likely.
Premier Wen Jiabao vowed to increase grain production next year after grain experts said that total output for 2003 would be less than last year.