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The increase of China's wheat output this year will end a six consecutive year decline in national wheat stockpile, said sources with China's national grain and oil information center.

 

Li Ke, director of forecast section of the center, released the prediction at a national seminar on summer wheat harvest held in Zhengzhou, provincial city of central China's Henan Province this week.

 

Li said China's wheat stockpile would increase this year, with the supply to exceed market demand. The declining of national wheat stockpile made China short of wheat supply in the past six years.

 

Statistics with the national grain and oil information center said the wheat output will hit 105 million tons, an increase of 8 percent over the previous year.

 

The information center predicted that China's wheat supply may exceed the market demand by three million tons in the coming one year.

 

Li said that after China's wheat stockpile reached 140 million tons in 1999, the storage level began to decline year by year, and the greatest drop was between 2003 and 2004 when a total of 20 million tons of wheat reduced in national stockpile.

 

But Li said the increase of wheat stockpile this year also resulted in a drop of wheat price in the market in China.

 

To protect farmers' interests, Chinese government decided to launch the protective price or floor price in six major wheat-producing provinces during the wheat purchase season between June 1st and September 30.

 

Li said the protective price policy is playing its role in stabling the country's wheat price.

 

Summer grain plays a critical role in a year's grain production in China. In the north, wheat is the decisive factor of the year's cereal yield.

 

In the south, where rice is the staple food, summer grain harvested in June usually plays a major role in stabilizing grain prices driven up by a short supply of stored grain in April and May due to seasonal reasons.

 

Henan Province is China's largest wheat production base, which produced about one-quarter of China's total.

 

Governmental statistics showed that the total wheat output in Henan reached 28.44 million tons this year, 2.49 million tons more than last year.

 

A total of five million tons of wheat produced in Henan has been purchased at the protective price, and the yearly total wheat to be purchased at the protective price is expected to exceed 10 million tons, according to the statistics.

 

(Xinhua News Agency July 1, 2006)