By comparison, the country imported 893,700 tonnes in 2009 and just 31,900 tonnes in 2008.

Landsberg said unless the drought conditions affecting eight grain-producing provinces eased, the mainland was expected to produce between 90 million and 100 million tonnes of wheat. 'Approximately 100 million tonnes seems likely.'

This would be down from the 114.5 million tonnes of wheat the country was set to harvest before the drought began late last year in Shandong and Henan provinces. Farmers were thought to have produced 115 million tonnes last year.

Beijing has already announced plans to spend more than 5 billion yuan (HK$5.9 billion) to battle the drought, which is the worst Shandong has seen for 200 years and in other provinces for six decades.

Landsberg said the country was likely to dig into its extensive grain stockpiles to meet the shortfall.

'China started last year with about 45 million tonnes of wheat stockpiled. This year, wheat stockpiles began the year at around 53 million tonnes. However much wheat is harvested this year is in effect adding to those stockpiles which began the year historically robust,' he said.

'China doesn't need to cover the expected shortfall with imports alone ... but in no way does the government want to rely only on stockpiles.'

Commodity traders said most of the imported wheat would come from the east coast of South America and the United States, especially via the Pacific ports and US Gulf coast. They said the Australian Wheat Board would continue to sell noodle wheat from Queensland and northern New South Wales.

'There has been some disruption caused by the floods in Queensland,' one trader said. Other wheat export areas are Victoria and South Australia which have not been as badly hit.

Shipbrokers said a surge in wheat exports from Australia to China should help buoy charter rates, especially if there is port congestion as a result of the increase in ships waiting to load cargoes. But they said an increase in exports from Latin America and the US would have a more dramatic impact on charter rates.

'The normal transit time between Queensland and New South Wales is around eight to 10 days. But a surge in cargoes from the east coast of South America, with a voyage duration of 45 to 50 days, should really lift freight rates,' one dry bulk shipbroker said.

He explained that dry bulk ships of between 55,000 and 70,000 deadweight tonnes were favoured for the grain trade because of their flexibility. An increase in the number of voyages from the Americas to China would reduce the available supply of these handymax and panamax-sized ships, causing charter rates to rise in the face of a possible vessel shortage.

The broker said rates for handymax vessels were reasonably healthy at around US$21,000 per day compared to last year's average of US$35,000 per day. But charter rates for panamax vessels have more than halved to around US$11,000 per day from last year's average daily rate of US$25,000.

Jinhui Shipping derived 10 per cent of its cargo volumes from agricultural products in 2009. But the percentage was much higher for Pacific Basin Shipping, with grains and agricultural products accounting for 17 per cent of its cargo volumes in the first nine months of last year.

The broker said: 'A rise in the mainland's wheat exports, especially if it leads to an increase in voyage duration, should benefit both companies along with other shipping firms with handymax and panamax tonnage in the dry bulk sector.'

Landsberg said the global supply of wheat was tight. 'Russia's wheat export ban remains in effect and Australia's wheat crop has been damaged by flooding. American wheat remains in great demand worldwide.'

At the same time, wheat prices are now at their highest levels since 2008.