China's summer grain output looks set to increase - for the first time in four years, the Ministry of Agriculture said Monday.

A bumper wheat harvest would dampen wild market speculation that China's imports will see large growth this year, said a senior agricultural policy adviser.

"Despite slight wheat acreage reduction, production is expected to rise by 3 percent year-on-year, thanks to favorable weather and policy support," said ministry official Wang Xiaobing.

Wheat accounts for nearly 90 percent of the crops harvested in summer. Summer grain, in turn, contributes to less than a quarter of China's total grain production, Wang said.

The official declined to release his ministry's prediction of this year's summer grain output.

According to the National Bureau of Statistics, the country yielded 96.22 million tons of summer grain last year.

Based on surveys of the ministry's Remote Sensing Application Center, Wang said each hectare is expected to yield at least 150 kilograms more than last year, hiking total wheat output by 2.5 million tons.

"The predicted output growth will further reduce the likelihood that China will import large volumes of wheat this year," said Han Jun, a division director of the State Council Development Research Center - a leading government think-tank.

Among worldwide speculation, the United States Department of Agriculture said in its recent World Agricultural Supply and Demand Estimates that China's wheat imports are projected at 8 million metric tons for the wheat marketing year beginning June 1.

But Han said China has been using its wheat stocks to balance supply and demand, and wheat imports have been used to replenish the stocks rather than for direct consumption.

Domestically, wheat prices are as much as 40 percent lower than in the global market, Han said.

The price factor and positive wheat output forecasts mean China will be unlikely to import as massively as some exporters expect, Han said.

Over the past years, many bakers and millers in China have imported high-quality wheat for bread and baked goods.

The scenario has changed, as China reserved 9.33 million hectares of farmland for special and top-grade wheat strains last year, an increase of 12.5 percent over the previous year, the latest statistics from the Ministry of Agriculture show.

The ministry sent a record number of combine harvesters to get in wheat on 10 million hectares by Sunday, half of the country's total wheat production area.

A chain of favourable policies, including subsidies and slashed agriculture taxes, have given incentives to wheat producers, Han said.

Redoubled efforts to control wheat pests and diseases have also helped increase production, said Zhu Enlin, a director with the ministry's Agro-technical Extension Center.

Governments at various levels have spent at least 100 million yuan (US$12 million) to check wheat diseases, including the devastating "yellow rust," Zhu said.

Grain output target

The bumper summer harvest in sight has buoyed the Ministry of Agriculture's confidence of producing 455 million tons of grain in 2004, a key year to recover grain production and to avert the detrimental reverse of the supply-demand relationship, the ministry's Wang said.

China's production of wheat, corn, rice and other food grain dipped from a record high of 512 million tons in 1998 to 435 million tons in 2003.

"If you have a bumper summer harvest in hand, you have gained an advantageous position for the whole year," Wang said. "Otherwise, you'll have to consider using the autumn harvest to offset losses from the summer harvest."

But Han said the current situation gives no reason for optimism. "It is still too early to draw a (rosy) picture for the whole year, since grain output for the whole year is determined by multiple factors," he said.

(China Daily June 8, 2004)