Strangely enough, just this week China approved a new round of ethanol plants using non-grain, but still food stocks - cassava, sweet potatos and sorghum. Considering they dont have much land currently cultivated with these crops it would seem it could place some pressure on grain production by crowding it out. Perhaps compared to total grain production of 500 million tonnes this year its not a big affect, but grain supply and consumption is quite finely balanced and only one major supply shock away from disaster.
From what I have read, with surging input costs it is very important for China to keep domestic prices of grains high because rural incomes depend on it. So they move may have this in mind.
