December 4, 2010

 

China's grain yield reaches new record

 

 

China's total grain harvest for 2010 reached 546.41 million tonnes, an increase of 2.9% from last year, the National Bureau of Statistics said Friday (Dec 3).

 

The size of the harvest set a seventh consecutive annual record, and is expected to relieve upward pressure on prices from concerns that China could face grain shortages related to weather problems and global shortfalls.

 

This year's summer grain harvest, which normally accounts for a third of the total harvest, had dipped 0.3%, aggravating concerns about full-year supply levels.

 

However, government officials in recent weeks had widely signalled increased confidence in the full-year collection, as few signs of problems emerged during the autumn grain season.

 

The market had already factored in the news, with bellwether contracts on the Dalian Commodity Exchange little changed and the most-actively traded September soy futures prices settling marginally higher.

 

"The size of this harvest represents a rise to competitive levels despite the weather problems the country has experienced (in past harvests), but there's still room to be conservative about coming harvests," said analyst Monica Tu.

 

Population increases, a rising exodus from rural to urban areas, and increasing difficulties in finding arable land continue to exert unrelenting pressure on China's grain resources.

 

The pressures have driven agriculture prices on a year-long rally, feeding into a two-year high in headline inflation in October and prompting a cascade of government policies in the last two weeks to try to roll back some of the price increases.

 

The bureau's announcement Friday (Dec 3) was the first official declaration on the actual size of this year's supply.

 

The autumn grain harvest totaled 391.99 million tonnes, up 4.8% from last year's level. Planted acreage this year rose 0.8% to 109.87 million hectares, the bureau said.

 

Grain production in the four major producing provinces in the northeast rose 13.4% to 117.79 million tonnes, it said. Last year's grain harvest totaled 530.82 million tonnes, which was up 0.4% from 2008.