Drought may reduce wheat output

10:42, January 17, 2011      

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Drought in the country's major wheat growing regions since late last year might reduce winter output, after seven years of consecutive production increases, said analysts.

The nation's top three wheat producing regions - Henan, Shandong and Hebei provinces - have been in a near continuous drought since late last year. Responsible for more than half of the country's wheat output, the agricultural crisis in these provinces is expected to push up wheat prices in 2010, said Zhang Yanlin research director with CIC Consulting in Shenzhen, Guangdong Province in a report released Friday.

These three provinces are among the worst hit areas and make up more than 90 percent of the nation's wheat output.

Rainfall in these provinces dropped more than 80 percent from the annual average, the worst since 1970, according to water resource department records.

In Shandong, more than half of planted areas have been hit by drought, while that figure is 25 percent for Henan and 33 percent for Hebei, according to industry website ChinaGrain.cn.

The impact on output from the drought is huge and the situation could get worse if the drought continues into the spring season, Nanfang Daily newspaper cited futures analyst Liu Qingli, with GF Futures Co in Guangzhou, as having said.

However, Liu believes the country would have enough wheat in reserve to weather the output reduction due to several good harvests.

The country's output of wheat, a major staple in North China, amounted to 115 million tons last year, about the same as 2009, according to the China National Grain and Oils Information Center.

Source: Global Times
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