March 11 (Bloomberg) -- China, which imposed price curbs on food to fight inflation, may ease controls on retail vegetable oil prices after supplies to consumers dropped, a minister said.

The government has given ``incentives'' to large companies including Cofco Ltd. and Wilmar International Ltd. to increase supplies, Huang Hai, an assistant minister of commerce, said in an interview today in Beijing while attending the National People's Congress. Huang didn't say what the benefits were.

Record prices for palm oil and soybean oil is stoking gains in food prices globally. China easing the restrictions suggests they have failed, and may bolster sales at companies including Wilmar, which supplies half of the country's edible oil.

``They cannot ignore the suppliers and think only of the consumers,'' said Yin Shao Yang, a plantation analyst at K & N Kenanga Bhd. in Kuala Lumpur, by phone today. ``Whether it is gasoline or cooking oil, there will be queues if supply issues are not addressed.'' The loosing ``is much needed.''

Blizzards in China have destroyed crops, blocked roads and caused shortages of food. That pushed up inflation 8.7 percent in February from a year earlier, the fastest pace in 11 years.

The Chinese government in January said makers and sellers of grain, cooking oil, meat, milk and eggs must seek approval for price gains, naming 12 companies including Wilmar and Cofco.

``We've asked regions to boost their own reserve supplies, and also given support to large firms'' and asked them to add commercial stock, Huang said. Local governments may decide to relax controls gradually after the legislature meetings end March 18, he said.

The Chinese government has asked Wilmar to help increase supplies of cooking oil, company's spokesman Au Kah Soon said in an e-mail reply to questions today.

The government won't cut tariffs on vegetable oils yet, Huang said.

To contact the reporters for this story: William Bi in Beijing at wbi@bloomberg.net; Claire Leow in Singapore at cleow@bloomberg.net

Last Updated: March 11, 2008 09:43 EDT