China's grain output dipped from a record high of 512 million tons (tonnes) in 1998 to 457 million tons last year as the government tried to bring down stockpiles and free up farmland for more lucrative cash crops.

Output for this year is expected to come in between 440 and 450 million tons, giving China a grain shortfall of up to 45 million tons, said Liu Zhiren, a researcher at the Agricultural Economic Research Center of the Ministry of Agriculture.

The shortfall is about equal to the annual grain production of Canada, one of the world's major grain exporters.

"Right now we should be okay, our grain production has fallen for four years but our reserves are still enough," Liu told AFP.

"If we don't raise our production in the coming years, then the reserves will fall to warning level by 2005."

Rising grain prices in October -- the price of wheat was up over 30 percent -- have reflected the shortage and while signalling better pay for farmers, it has hut China's urban poor as prices for flour, edible oil, meat and eggs have also risen.

Grain prices in China are already higher than prices on the global market.

As the world's largest grain producer, China's harvest largely reflects world grain trends, said Lester Brown, director of the Washington-based Earth Policy Institute.

Brown predicts a world grain shortfall of 93 million tons this year following consecutive drops in world grain production over the last four years.

"Agricultural leaders are now looking to next year's crop with fingers crossed," he said in a recent statement.

"If 2004 brings another large shortfall comparable to this year or last year, there could be chaos in world grain markets by this time next year as more than 100 grain-importing countries scramble for scarce exportable supplies."

Severe flooding or drought in any of the major grain exporting countries like the United States, Canada, France, Australia, Argentina or Thailand could send traditional grain importers such as Japan, South Korea and most Middle Eastern countries scambling, he said.

Natural disasters in China or India could result in the world's two biggest grain producers seeking to fill the mouths of a third of the global population from world grain markets.

Brown's 1995 book, "Who Will Feed China?", sent alarm bells ringing in the mid-1990s as Chinese researchers rushed to debunk his theory that a growing population and deteriorating pasture and croplands would eventually end China's grain self-sufficieny and impact world food security.

His new book, "Plan B," published in September, reaffirms his earlier predictions but is better researched with growing evidence of global warming and water scarcity expected to seriously impact food security as the world population approaches some 8.5 billion by 2050.

Brown, who has long championed China's "one child" family planning policies, is expected to be in Beijing this week to meet Chinese leaders and publish the Chinese version of his new findings.

"Mr. Brown is a friend of mine, but his scenarios are a bit pessimistic," Liu said.

"A lot of the problems that his theories reveal are already well known to Chinese scientists, we have already been working on these things."

China's population alone is expected to grow to 1.6 billion by 2030, increasing its grain needs to 640 million tons a year and far-outstripping its present production capacity, Liu said.

"Right now China still has the capacity to produce 500 million tons of grain a year," Liu said.

"As far as 2030 is concerned, we think we can take measures to meet demand. This issue has the attention of our highest leaders.

"China will not import more than 20 million tons of grain a year because that would be too disrupting to global markets."

SPACE.WIRE