July 13, 2010

China's 2010 summer grain output dips

China's summer grain output in 2010 fell for the first time in seven years, the National Bureau of Statistics (NBS) said Monday (Jul 12).

Summer grain output fell to 123.1 million tonnes this year, down 0.3%, or 390,000 tonnes, from a year ago, the NBS said.

The drop in output was due mainly to the drought in China's southwestern regions earlier this year, with output in Guizhou and Yunnan provinces down 1.69 million tonnes, the statement said.

Despite a slight expansion in the area of land under cultivation - up 0.1% to 27.42 million hectares - the yield per hectare dropped 0.4% on-year to 4,489.3 kilogrammes per hectare, it said.

Agriculture Minister Han Changfu warned last month that the severe drought in the southwest of the country and extreme cold in the north of the country earlier in the year had undermined the country's summer grain harvest.

In April, the government unveiled plans worth more than RMB2.4 billion (US$0.35 billion) to support the summer grain harvests, which account for about one quarter of China's annual food yield, according to the Ministry of Agriculture.

Summer grain output rose for six consecutive years to top 123.35 million tonnes last year, 2.6 million tonnes more than the previous year.

Analysts believe that with abundant grain reserves, China is capable of regulating grain prices and will not have to deal with hikes in consumer prices.

"Despite a reduction in output, the overall grain supply and reserves are sufficient," said Cheng Guoqiang, a researcher with the Development Research Centre of the State Council.

Currently, food prices have a one third weighting when calculating China's consumer price index (CPI), the main gauge of inflation.