2011/02/16

China says drought won't affect world food prices

BEIJING, February 15, 2011 (AFP) - China sought Tuesday to alleviate fears about the global impact of a drought in its wheat-growing regions that has raised concern it could send world food prices soaring.

The situation "will not affect international food prices", foreign ministry spokesman Ma Zhaoxu told reporters at a regular press briefing.

"The recent drought may have some impact on winter wheat production but authorities are taking active measures to minimise the impact," he said.

He added that China had "abundant" reserves of grain that were sufficient to meet the nation's needs.

The dry spell in northern China's wheat heartland has caused considerable concern abroad, and even sparked a UN warning last week about the impact on winter crops, a key harvest for the world's biggest producer of the grain.

If China were to buy a large amount of wheat overseas due to a crop failure, prices on world commodity markets would surge at a time when food costs are already causing governments headaches.

Concerns eased somewhat after snow fell over the weekend across much of northern China including major wheat-producing provinces Shandong and Henan.

But experts say more precipitation will be needed to alleviate the dry spell, which has affected at least 7.7 million hectares (19 million acres) of wheat crops.

Beijing has earmarked 13 billion yuan ($2 billion) to combat the drought and has announced measures including diverting water to affected areas and constructing emergency wells and irrigation facilities.