Jan. 14 (Bloomberg) -- China's total grain production rose 3.2 percent in 2005 as the world's largest consumer of rice, wheat and corn tried to meet domestic demand, according to a preliminary estimate by Beijing-based State Grain Administration Deputy Director Zeng Liying.

China produced 484 million metric tons of grains in 2005, an increase from 469 million tons in 2004, she said at a grains conference in Shanghai today.

Production still fell short of demand, which reached 494 million tons, she said. Nonetheless, the shortfall of 10 million tons compares to a shortfall of 50 million tons in 2003, which had prompted concerns for the world's most populous country, with its 1.3 billion consumers, she added.

Any shortfall benefits grains exporters such as the U.S. and Australia. The U.S. is among the biggest exporters of corn, wheat and rice, according to data from the U.S. Department of Agriculture.

Earlier, Shang Qiangmin, director of the Beijing-based center, an affiliate of the State Grain Administration, said demand for grains may exceed 500 million tons for the first time in the 2005-2006 year.

``Our grain consumption is expected to continue to increase,'' Zeng said. ``The long-term supply and demand situation will be in tight balance.''

China's production gains are limited by technology access and land availability, she said. China maintains its grain reserves by replacing old stockpiles with fresh crops, and aims to improve the wholesale market network nationwide to regulate prices, Zeng said.

The U.S. and Argentina are the world's largest corn exporters. The U.S., Canada, Australia and Argentina are the four largest wheat exporters. Thailand, Vietnam, India and the U.S. are the four largest rice exporters.

Corn futures rose 5.4 percent last year to $2.16 a bushel on the Chicago Board of Trade. Wheat gained 10 percent to $3.39 a bushel on the Chicago Board of Trade.

To contact the reporter on this story: Chin-Ling Koh in Beijing at Or ckoh2@bloomberg.net; Claire Leow in Jakarta at cleow@bloomberg.net.

Last Updated: January 13, 2006 23:57 EST