China is banking on a grain harvest of 490 billion kg this year, 6 billion kg more than last year.

China's 2006 grain output is likely to sustain upward momentum for the third year in a row.

Natural disasters, particularly a two-month summer drought afflicting grain production areas, had resulted in a loss of 40 billion kg of grain so far this year.

China could still expect an abundant harvest. China produces grain in summer - a third of annual production - and autumn. Most of North China expects a good harvest this autumn to make up for drought damage.

In 2004, China's grain production recovered. Output reached 469.4 billion kg that year, jumping from 430.6 billion kg in 2003.