February 25, 2005

 

 

China's rising grain output may lower imports

 

Chinese Ambassador to Australia Fu Ying warned farmers Thursday against expecting China to be a long-term source of import demand for grains.

 

Addressing a meeting of Perth-based farmer lobby Pastoralists & Graziers Association, she said that the world need not worry about a grain crisis in China as the country is confident of food sufficiency.

 

Good news for China but bad news perhaps for wheat farmers in Australia.

 

Global wheat exporters, including Australia, have been hoping a return of Chinese buying since late 2003 would be the start of a long-term demand trend.

 

In early February, Brendan Stewart, chairman of Australian exporter Australian Wheat Board Ltd. (AWB), said the company is starting to factor in shipping large quantities of wheat to China for several years.

 

AWB has already sold 2.5 million metric tons of wheat to China after a hiatus on imports ended in December 2003, with the latest sale of 1.5 million tons announced Nov 21, 2004.

 

Fu said annual Chinese grain production peaked in 1998 at 500 million tons, meeting China's food needs, but has since fallen due to an imbalance between rural and urban development. In 2004, the government launched a number of measures designed to boost agricultural development, with the success of the policy borne out in the 2004 harvest, she said.

 

A survey by China's National Science Academy estimated China's maximum grain production capacity at 830 million tons, supporting a much larger population than now, she said.

 

Figuring on an average of 500 kilograms of grain a person a year, this maximum production would be enough to support a population of more than 1.6 billion people, well up from China's current 1.3 billion, she said.

 

At current birth rates, it will take China's population 35 years to grow to 1.6 billion, but then the demographic trend will slow, she said.