China's strong demand, along with the willingness of farmers in the United States to grow more corn instead of soybeans due to ethanol fuel demand, will send soybean prices higher, Chen Xiwen, deputy head of the central government's rural work leading panel, told the official Guangzhou Daily.

China, the world's top soy buyer, imported 7.45 million tonnes of the oilseed in the first two months of the year, up 6.1 percent from the same period last year, customs data showed.

The country imported 54.8 million tonnes of the crop last year.

Chen repeated that the drought in northern China would not have much impact on grain prices this year.

But Chen added other factors, such as higher raw material and labour costs, as well as the rise in global grain prices, would send local grain prices up.

However, the government can prevent any surge in grain prices with ample stocks and higher output, he said.

Vice Agriculture Minister Wei Chaoan said on Saturday that the drought had not had a serious negative impact on China's winter wheat output, which accounts for 20 percent of the country's total grain output.

The government will spare no effort in guaranteeing a bumper grain harvest this year, Wei added.