February 12, 2004

China 2004-05 Wheat Production To Hit 20-Year Low

China's wheat production is expected to fall to the lowest level since 1983, largely because of a decline in planted area, local traders and analysts in China said Thursday.

The total production of winter and spring wheat in 2004-05 is forecast to fall to as low as 83 million metric tons, about 3% lower than the 86 million tons produced in 2003-04, also the lowest output since China harvested 81.39 million tons of wheat in 1983-84, analysts said.

Citing the first forecast of new crop wheat production by a government- backed grain think tank, traders said the figure is lower than earlier expectations amid the Chinese government repeatedly saying it would make efforts to boost grain production in 2004.

Beijing aims to boost grain production in 2004 to 455 million tons, from a 10-year low of 430.60 million tons last year, a senior government official said at a recent press conference.

But farmers appear to have planted much less winter wheat than previously estimated by the government, traders said, adding that could be a reason for the think-tank to lower its forecast.

The acreage under the winter wheat crop this year is estimated around 19.50 million hectares, down 5% from the previous season.

China is expected to import 3.0 million to 3.5 million tons of wheat in the 2004 calendar year to re-stock shrinking state reserves, as the government heavily drew from its buffer stock last year to bridge the supply gap, traders said.