From: Reuters
Published January 30, 2008 06:01 AM

China's crops badly damaged by icy storms

BEIJING (Reuters) - China's Agriculture Ministry said on Wednesday that the unusually harsh winter had dealt a serious blow to the country's wheat and vegetable crops and warned that damage could rise because of persistent cold.

The ministry said in a statement on its Web site that 103 million mu of farm crops had been hurt by the freak weather, which has plagued southern, central and eastern China over the past week.

Of that total, it said 11 million mu had been ruined, while another 53 million mu were badly damaged.

The crops affected included rapeseed, vegetables, wheat, tangerines and tea leaves, although the ministry did not specify how much of each had been damaged.

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Beijing is sending out experts to the most damaged areas: Hunan, Guizhou, Hubei, Anhui, Shaanxi, Henan, Jiangxi and Jiangsu.

"They will survey the damage and lead rescue work, to guide these areas to resume winter production as quickly as possible and ensure efficient market supply of farm products," it said.

Grains traders and industry officials were most nervous about damages to rapeseed, an oilseed grown mainly along the Yangtse River that is harvested after March.

While record vegetable oil prices have raised the country's rapeseed acreages this year by possibly as much as 30 percent from a year earlier, any crop loss would lead to higher imports of edible oils or oilseeds, including soybeans.

"The most important thing to watch out for is the local rapeseed crop," said a trader at an international house in Shanghai.

"This year, if the weather is normal, the crop should be around 11 million. If bad weather continues in the next 1-2 weeks, we'll have to cut our forecast."

A small 2007 rapeseed crop, which some traders estimated at 8-9 million metric tons -- or well below the government think-tank estimate of 12 million -- has helped push up the country's imports of soybeans and vegetable oils last year.

The Shanghai trader added that so far China had booked 6-7 cargoes of canola, or rapeseed from Canada, for December to February shipment at $570-620 per metric ton, including costs and freights.

The traders and industry officials said though the icy weather would reduce the country's 2007 winter wheat crop, they expected the damages to be small. It was also unlikely to lead to any supply shortages due to its ample stocks in the grain.

"I do not have great concern about wheat supply at this moment," said one industry official in Beijing. "The Chinese government has enough wheat stocks."

He said the top wheat producing in the north, such as Shandong, Hunan, Hebei should be fine, though damages might be done in less crucial producers such as Jiangsu, Anhui and Hubei.

"According to weather department forecasts, rain and snow is persisting in most southern areas and some are still experiencing snow storms, so the disaster may continue to develop," the National Development and Reform Commission said in a statement.

The NDRC said in a separate statement that prices of some vegetables, including cabbage, carrots, eggplant and cucumbers, have risen by more than 50 percent in some regions because of the storms.

(Reporting by Simon Rabinovitch and Nao Nakanishi in Hong Kong; editing by Dominic Whiting)

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