"Despite slight wheat acreage reduction, grain production is expected to rise by 3 percent year-on-year, thanks to favorable weather and policy support," said Ministry of Agriculture policy advisor Wang Xiaobing on Monday.

Wheat accounts for nearly 90 percent of the crops harvested in summer. Summer grain, in turn, accounts for less than a quarter of China's total grain production, Wang said. He declined to release the ministry's forecast for this year's summer grain output. According to the National Bureau of Statistics, 96.2 million tons of summer grain were harvested nationwide last year.

Based on surveys of the ministry's Remote Sensing Application Center, Wang said each hectare is expected to yield at least 150 kilograms more than last year, raising total wheat output by 2.5 million tons.

"The predicted output growth will further reduce the likelihood that China will import large amounts of wheat this year," said Han Jun. Han is a division director of the State Council Development Research Center, a leading government think-tank.

In its recent World Agricultural Supply and Demand Estimates, the US Department of Agriculture projected that China's wheat imports would be 8 million metric tons for the wheat marketing year beginning June 1.

But Han said China has been using its wheat stocks to balance supply and demand, and wheat imports have been used to replenish the stocks rather than for direct consumption.

Domestically, wheat prices are as much as 40 percent lower than in the global market, Han said. The price factor and positive wheat output forecasts mean China will be unlikely to import as massively as some exporters expect.

For several years, many bakers and millers in China have imported high-quality wheat for bread and baked goods. That scenario has changed, as China reserved 9.3 million hectares of farmland for special and top-grade wheat strains last year, an increase of 12.5 percent over the previous year.

The ministry sent a record number of combine harvesters to bring in the wheat on 10 million hectares by Sunday, accounting for half of the country's total wheat production area.

Subsidies, slashed agriculture taxes and other policies have given wheat producers incentive to up output, Han said.

Redoubled efforts to control wheat pests and diseases have also helped increase production, said Zhu Enlin, director of the ministry's Agrotechnical Extension Center.

Governments at various levels have spent at least 100 million yuan (US$12 million) to check wheat diseases, including the devastating "yellow rust," Zhu said.

The anticipated bumper summer harvest has buoyed the Ministry of Agriculture's confidence in producing 455 million tons of grain in 2004, a key year to recover grain production and to avert the detrimental reverse of the supply-demand relationship, said Wang.

Production of wheat, corn, rice and other food grain dipped from a record high of 512 million tons in 1998 to 435 million tons in 2003.

"If you have a bumper summer harvest in hand, you have gained an advantageous position for the whole year," Wang said. "Otherwise, you'll have to consider using the autumn harvest to offset losses from the summer."

But Han said the current situation gives no reason for optimism. "It is still too early to draw a (rosy) picture for the whole year, since grain output for the whole year is determined by multiple factors," he said.

(China Daily June 8, 2004)