June 2, 2004

China Wheat Production Lowest Since 1983
 

Winter small grain crops in Asia are being harvested, and planting of rice and coarse grain crops has started, according to a report released Monday by the UN Food and Agriculture Organization (FAO). Though some countries had insufficient rain, the report says the impact on overall food production is limited since winter crops are generally irrigated. Grain supplies in the region have been tight and prices have been on the rise for major grains since last fall.

In China, the total area planted to small grains dropped by more than 15%, 34 million acres, from 1998 to 2003. As a result, says the report, the output of small grains declined by 17%, or 79 million metric tons.

China's 2004 winter wheat crop, accounting for some 85-90% of total annual wheat production, is in the late development stage and under favorable growing conditions. Planting of spring wheat is almost completed. Aggregate 2004 wheat production is tentatively estimated at 83 million tons, some 3.4% lower than in 2003, reflecting the lowest area since 1983.

Total planted area for corn is expected to continue to decline this year, by 2% from the previous, due to strong prices of competing crops such as soybeans and rice. The rice area is expected to increase in 2004 by some 4% from the previous area due to government support policies, especially minimum support prices (early indica 1,400 yuan/ton, middle indica 1,440 yuan/ton, and Japonica 1,500 yuan/ton).

The report says the government has begun implementing a number of new policies to encourage farmers to increase grain production that include direct subsidies to farmers (about $1.2 billion, or about $20 per hectare), phasing-out of agricultural tax in 1-5 years (1-2 years in Northeast region), minimum grain purchasing prices, and strictly protecting farmland.

India is the second largest producer of wheat after China. This year's wheat output for the country, while revised downward, still shows a sharp increase over last year and the 2004 whea t area and output are estimated at well above last year and the five-year average, FAO says.

Sri Lanka has been seriously affected by drought with rice production falling 18% in 2004. Thousands of families there are in need of food assistance.

The report also warns that a serious humanitarian crisis continues in North Korea because of chronic food shortages. "With the recent arrival of donated maize (corn) and wheat, all but 600,000 core beneficiaries received their WFP full cereal rations in April. New pledges of about 123,000 metric tons of mixed commodities are urgently needed to cover needs over the next six months."

Overall, the number of countries facing serious food shortages this month declined to 35 from 38 in February, but in Africa the number of countries needing food aid remains unchanged at 24, the report said.