BEIJING (XFN-ASIA) - Prices of agricultural items in China will continue to rise and stay at high levels in the foreseeable future, government economists said at a forum here over the weekend.

'In the upcoming period, it will be very difficult to bring down prices of China's agro-produce,' said Ma Xiaohe, a researcher at the National Development and Reform Commission, the nation's top economic planning body.

The current high prices of agro-produce in China are not entirely due to supply shortage, but also stem from excessive credit, he said in the forum that was broadcast live by the People's Daily website.

Years of excessive investment combined with surging trade surplus has led to China being awash with liquidity, pushing up prices.

China's inflation hit a near 12-year high of 8.7 pct in February, accelerating from 7.1 pct in January. Rising food and grain prices are considered major reasons for the spiraling inflation.

A cyclical economy is another reason for high agro-produce prices, according to Ma.

Ma said that China is now riding the up-tide of a growth cycle, which is usually accompanied by a rise in prices of primary products.

China's gross domestic product expanded 11.4 pct last year, notching double-digit growth for five years in a row.

Ma added that rising production costs and surging global commodity prices are also contributing to price hikes in China.

Justin Yifu Lin, the World Bank's new chief economist, agreed that agro-produce prices will stay at high levels in the coming months.

China must increase investment on rural infrastructure, upgrade its agricultural technology and also focus on foreign trade to address the situation, he said.

Han Jun, director of the Rural Economy Institute -- a think-tank overseen by the cabinet -- said rising prices of agro-produce will not lead to inflation going out of control.

Although China on the whole faces some problem, inflation can still be tamed, he said.

jianlin.li@xinhuafinance.com

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