Major portion of China’s wheat crop remains at risk

by Commodity Online

China’s continuing drought that hit its major wheat producing province of Shandong showed no signs of easing despite recent snowfalls.

The FAO said two-third of China’s vast wheat crop is at risk due to the winter drought. The affected areas in the northern plains of China produced over 75 million tonnes of China’s total production of 112 million tonnes of wheat last year.

Any shortfall in Chinese production would have serial effects on availability and prices of wheat around the world, FAO said in an alert issued in Rome.

But China differs with FAO’s assessment and put the figure at 42%. Chen Lei, deputy director of China’s office of statye dlood control and drought relief headquarters, has said that the total wheat area under drought is 101.28 million mu (6.75 million hectares), while only 15.06million mu (1.35 million hectares) is severely affected.

Though Chinese officials have repeatedly expressed concern about the advancing drought, there has been no indication the government considered the situation as bad as depicted by the FAO.

“The FAO grabbed a lot of headlines. But if you look closely it has kept its forecast on China’s wheat output unchanged at 112 million tonnes. It is only saying that the situation will be severe if the winter drought is followed by another one in spring,” a senior Bejing-based official pointed out.

A sharp reduction in wheat yield might force the cash-rich Chinese government to go shopping which might result in a major hike in world prices. But China still has a stock of 60 million tonnes of wheat and may not rush to buy vast quantities until there is another round of drought.

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