China wheat crops safe, may ease concerns of further price rise

BEIJING (Commodity Online) : Subsequent to reports that China may face a winter wheat crop failure, the country’s top agricultural official has clarified that the crop situation may not be as bad as anticipated.
This declaration may ease concerns in the global market of a potential wheat price rise that would have occurred had China entered a shopping-spree-mode for wheat.
According to Chen Xiwen, director of the office for the Communist Party of China (CPC) Central Committee's Leading Group on Rural Work, the winter drought hit the crops when they were under hibernation and the subsequent rainfalls coupled with irrigation efforts has improved the crop scenario, reported china.org.cn.
But the official cautioned of a price rise with anti-drought measures raising the price bar of wheat.
The Chinese government has also mooted projects to bring under irrigation 60.85 million hectares of land which is not mechanically irrigated in the present situation.
The country is also building up huge reserves of grains to the tune of 114.6 million tons to ensure food security by the end of this month.
Reuters, quoting IGC (International Grains Council) estimates, say that the figure is more than the combined total of 104.5 million tons held by all the major wheat exporters.
There were fears that China would shop for wheat given the possibility of a wheat crops failure thereby pushing up global wheat market prices, further.
Given the gigantic foreign exchange reserves--$2,622,000 million, as on December 2010--China is having; the country can procure wheat from the global market, but at the expense of other wheat importing countries, analysts had said.
The announcement may give the world some breathing space now.

(Source: http://www.commodityonline.com/news/China-wheat-crops-safe-may-ease-concerns-of-further-price-rise-36975-3-1.html)