CHINA, the world's biggest wheat producer, raised its forecast for this year's harvest as farmers planted the grain instead of other more labor-intensive crops, increasing prospects for boosting exports.

Wheat production may rise 2.2 percent this year to 107 million metric tons, against last year's 104.7 million tons and a previous forecast of 105 million tons, Shang Qiangmin, head of the China National Grain and Oils Information Center, said in Beijing yesterday.

China's better-than-expected wheat harvest may allow the country to export more of the grain to nearby Asian countries, possibly taking market share away from the world's biggest exporters - the United States, Canada and Australia. Chicago wheat prices reached a record US$6.50 a bushel on Friday on speculation high prices will curb demand, Bloomberg News said.

"In provinces such as Jiangsu, we found we have overestimated the planting area of rapeseed by 10-15 percent as farmers increasingly switched to wheat from crops that are too labor-intensive," Shang said. "That's why we raised our winter wheat output forecast by two million tons."

China's wheat production in the marketing year ending in June 2008 is forecast at 100 million tons, down from 103.5 million tons in the previous year, with exports unchanged at 2.5 million tons, according to a report by the US Department of Agriculture last month.

China's wheat harvest has been helped this year by improved production technology and higher government subsidies, leading to record-high yields, Xinhua news agency reported on June 17.

Production is likely to increase even after the crop was affected by drought, frost and pest-related disasters, Xinhua said, citing Minister of Agriculture Sun Zhengcai.