June 3, 2011

The worst drought in half a century in China will not push up grain prices drastically, but paddy rice growth will be affected, experts say.

Paddy rice output will be hit in the thirsty provinces of Hubei, Hunan and Jiangxi, said Mei Xurong, head of the Institute of Environment and Sustainable Development in Agriculture of the Chinese Academy of Agricultural Sciences (CAAS).

But anti-drought measures should alleviate the situation somewhat, Mei said, adding that it was too early to forecast a decrease in paddy rice output.

Global grain price hikes will not greatly push up domestic grain prices as China has a balanced demand-supply structure, said Cheng Guoqiang, a researcher at the Development Research Centre of the State Council.

China has large amounts of grain in reserve and this year's winter wheat harvest is expected to be good, Cheng said.

But the cost of labour, fertilisers, pesticides and seeds may push up the price, he added.

The drought, the worst since 1961, has affected both irrigation and water supplies in the middle and lower reaches of the Yangtze River.