China Works To Stave Off Wheat Crisis

HONG KONG � It is weather with global breadbasket implications.

Even as senior Chinese officials exhort local officials to do everything possible to cope with a severe drought in the country's wheat belt, the government is trying to reassure the public that food prices will not rise.

China's drought-control headquarters posted a statement on its Web site on Sunday that described conditions as "grim" across a wide area of the wheat belt in Northern China and called for emergency irrigation efforts.

Agricultural experts say it is too early to assess the damage to the wheat harvest.

"We are in the winter months now, when it is typically drier anyway, so the seedlings should still be alive," said an expert at Shandong Agricultural University who would provide only his family name, Wang. "But if the weather turns warmer and there is still no rain, then we will not be talking about lower agricultural production, but rather zero production, because the seedlings will all be dead."

The worries go beyond China, which has essentially been self-sufficient in grain for decades. The concern is that China, with 1.3 billion mouths to feed, may need to import wheat in volume, creating shortages elsewhere.

Wheat prices in Chicago jumped nearly 2 percent on Tuesday when the United Nations' food agency issued a rare alert that China's crop was in trouble, and prices remain near their highest level since a steep spike in commodity prices in 2008.

Light snow and rain fell on north-central areas of China's wheat belt on Wednesday and Thursday, partly because meteorologists had fired artillery shells and truck and aircraft-mounted rockets loaded with the cloud-seeding chemical silver iodide. Because of the recent precipitation, drought-control officials said last week that about one-tenth of the drought-stricken area had received adequate moisture for now.

Prime Minister Wen Jiabao assured the public in televised remarks late last week that the supply and demand of grain were "basically" in balance and that large stockpiles were available.

The Finance Ministry has begun offering emergency subsidies of $9 to $11 an acre to help farmers pay for irrigation. Local and provincial governments are also providing financial help.

Chen Shuwei, the vice president and chief analyst at Beijing Orient Agribusiness Consultant, a Beijing firm with close links to the Agriculture Ministry, said that the winter wheat crop supplied over 90 percent of the country's supply and was typically harvested in June, with the rest grown over the summer. China is the world's largest wheat grower, accounting for one-sixth of the world output in good years. The government has wheat stockpiles equal to half the country's normal harvest.

Beijing's top priority this year is to fight inflation, and food accounts for a third of China'sconsumer price index. China's leadership appears to have become alarmed after Mr. Wen toured drought-stricken regions in late January and then held a cabinet meeting to discuss the problem.

According to a statement on the China Meteorological Administration's Web site, cabinet members were told that there was no end in sight to the drought.

Mr. Wen and President Hu Jintao called for "all-out efforts" in response.

(Source: http://ping.fm/KkZoC[])

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