China says wheat reserves abundant despite droughtBEIJING — China said Tuesday that it has enough wheat reserves to weather a crippling drought and sought to allay concerns that a poor harvest will further push up global food prices.
BEIJING — China said Tuesday that it has enough wheat reserves to weather a crippling drought and sought to allay concerns that a poor harvest will further push up global food prices.
China is the world’s largest wheat-growing nation, but its wheat belt has gotten virtually no precipitation since late October.
Global wheat prices have spiked in recent days, with some analysts blaming China’s drought and concerns that Beijing would be forced to import wheat to meet domestic demand.
Foreign Ministry spokesman Ma Zhaoxu told reporters at a regular news conference that China has plentiful reserves following seven years of bumper harvests and that recent drought conditions in the wheat belt “will not affect international food prices.”
Ma said the government was taking active measures to minimize the drought’s impact.
The government said last week it will spend $1 billion to alleviate the drought, which as of Sunday had affected 18 million acres (7 million hectares) of crops in northern and eastern China and left nearly 3 million people short of drinking water.
Shanghai-based agriculture analyst Lief Chiang of Rabobank said that numerous other factors were behind the increase in global wheat prices, including flooding in Australia, drought in Russia and an early frost in Canada.
“Maybe the drought in China was the straw on the camel’s back,” he said.
Chiang said the drought would put pressure on China’s domestic grain and other food prices.
Not only do hundreds of millions of Chinese rely on farming to make a living, but good harvests are crucial to keeping meat, grains and vegetables affordable for the vast majority of lower-class Chinese who spend one-third or more of their income on food.
Date released Tuesday showed China’s consumer prices rose 4.9 percent in January, driven by a 10.3 percent jump in food costs. That was up from December’s 4.6 percent rate and close to November’s 28-month high of 5.1 percent.
However, other experts said China’s wheat crops are currently dormant and that rain or snow in the next month or two could still allow for good harvests.
“Good rains last October before seeding provided abundant moisture to get the current crop sprouted and established and in good shape to overwinter,” said Jerry Norton, a commodity analyst with the U.S. Department of Agriculture.
China doesn’t publish the size of its grain reserves, but Norton said that the U.S. Department of Agriculture estimates China will this year have about 60 million tons of wheat reserves or about 55 percent of expected domestic consumption.