China winter wheat output high, imports unlikely

BEIJING, July 2 (Reuters) The China National Grain and Oils Information Centre (CNGOIC) said it had revised upwards its estimate for the country's 2007 winter wheat output to 102 million tonnes despite drought damage in some provinces.

With production exceeding demand, China would not likely import much grain and instead, was set to export more wheat, helped by the tight supply in the global market that raised wheat prices to highs not seen in more than 10 years.

Shang Qiang Min, director of the state-owned think-tank, told a conference an acreage increase in Henan, the country's top wheat producing province, more than offset drought damage in Shandong and Hebei provinces.

The revision in the 2007 winter wheat output projection, from 99.6 million tonnes, raised the country's total wheat output in the 2007/2008 marketing year to 107 million tonnes from 105 million forecast last month.

The 2007/2008 marketing year started in June and ends in May, 2008.

Shang also said the country's 2007/2008 wheat exports would total 1.5 million tonnes, while it was likely to import 0.6 million tonnes of the grain. Comparative figures for 2006/2007 were not immediately available.

''China will be a wheat net exporter rather than an importer,'' said Shang.

He estimated China's domestic wheat consumption in the 2007/2008 marketing year would stand at 101 million tonnes.

Greg Arason, President of the Canadian Wheat Board, agreed, saying: ''Given China's production, there will be little demand for imports from any areas unless it is for specific high-quality wheat.'' ''There is a lot of wheat here. There is a good opportunity for China to export,'' Arason told reporters on the sidelines of the conference.

To support domestic prices and ensure the country's food security as well as farmers' income, the Chinese government has been buying wheat from farmers at low prices.

Lu Jingbo, a department director with the State Grain Administration, said the central government was likely to buy 30 million tonnes of wheat this year, which was still lower than last year's purchases of 40 million tonnes.

REUTERS SKB KP1154