BEIJING, China (Reuters) – Snow across drought stricken parts of northern and central China has brought limited respite from dry conditions threatening winter wheat crops.
Premier Wen Jiabao sounded a confident note after the welcome but patchy snowfalls, saying China would be able to produce enough grain and rein in inflation that has been driven by rising food prices.
Snow was recorded in Beijing and parts of Henan, Anhui and Jiangsu provinces, some of which have seen months without precipitation.
“Because the precipitation will be concentrated in the middle and lower reaches of the Yangtze River, it will have a limited effect on mitigating the drought in northern areas,” said Sun Jun, a senior forecaster for China’s meteorological service.
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Data and images from the China Meteorological Administration showed that patches of both provinces had snowfalls, but most areas stayed dry.
Shandong had been expected to receive additional snowfalls in the next four days, “but as the snowfalls will not be big, their contribution to easing the drought conditions will be of scant help,” the meteorological administration said.
China weighs heavily in calculations of global grain demand, and traders believe an erosion of the nation’s self-sufficiency could ripple through the global wheat market, driving up prices.
“This year, global supply and demand for grains is tight and the price rises have basically been worldwide, and so stabilizing grain production has become all the more important,” said Li Guoxiang, an agricultural economist at the Chinese Academy of Social Sciences.
Wen is worried that a fall in grain production could also magnify inflationary pressures, a big headache for policy-makers in Beijing with consumer prices rising at their fastest annual pace in nearly three years.
“Maintaining stable growth in this year’s grain production is extremely important for properly managing inflationary expectations, stabilizing the general level of consumer prices and achieving steady and relatively fast growth, as well as social harmony and stability,” said the official report of a central government meeting chaired by Wen.
The premier was optimistic about China’s prospects.
“We have the confidence and capability to ensure efficient supply of agricultural products, particularly grain, and to keep overall price levels basically stable,” he said.
China harvested 115.1 million tonnes in 2010, 95 percent of it winter wheat, which is the crop now at risk.
The drought has hit 19 million acres of winter wheat in eight provinces, including Henan and Shandong, which is 42.4 percent of their total winter wheat acreage, the agriculture ministry said.
Only four million acres, about a fifth of the drought-hit acreage, was “seriously affected,” it said.
U.S. wheat futures are closing in on a 30-month high, buoyed by strong demand and worries about threats to production in China and the United States.
Chinese wheat futures rose by the seven percent daily limit on Feb. 9 after a week-long holiday. The rise came despite the latest hike in Chinese interest rates Feb. 8, a policy measure seen to be partly aimed at food inflation, which hit 9.6 percent in the year to December.
