Drought risk to China wheat crop

A punishing dry spell in the country's biggest wheat producing areas is threatening the winter harvest, in turn stoking fears that already rising prices will increase more steeply. And the problem has considerable political implications.

Drought has hit farmers hard in China, with the government pledging $1 billion to fight the worst winter drought in 60 years. The drought has affected more than 6.4 million hectares of wheat crops in eight provinces. Lu Jian / EPAShow less

China's chief food-producing areas are parched and reeling from an extreme shortage of rain this winter, prompting the UN food agency to warn of pressure on wheat prices in the world's largest producer of the grain.

The drought is adding to global concerns about food prices, which reached record highs last month and are expected to continue rising in the months ahead.

A steep increase in food prices in 2007 and 2008 led to protests in many countries, and recent unrest in Tunisia has been linked to food price surges. Some analysts believe rising wheat prices in China sparked the country's pro-democracy demonstrations in 1989, and the Chinese government is keenly aware of the destabilising effect of food price inflation.

While the traditional image of China is one of a rice-eating nation, most people north of the Yangtze River eat primarily wheat-based foods. In Beijing supermarkets, shoppers are concerned about the cost.

"The price of wheat is rising a lot. It's a worry," said a middle-aged woman shopping with her husband in the city.

Production from China's 4 million hectares under wheat cultivation has fallen dangerously, threatening the food supply of the country's burgeoning northern cities.

Prices for domestic wheat hit historic highs on the Zhengzhou Commodity Exchange when it reopened after the Lunar New Year holiday.

Overall food prices have also been affected by the New Year, which traditionally drives prices higher as workers go on holiday, and by snowfall in the south, which has made food distribution from southern provinces more difficult.

China has said the drought was mainly affecting the provinces of Shandong, Jiangsu, Henan, Hebei and Shanxi, which together grow more than two-thirds of the country's wheat.

Shandong has had only 12 millimetres of precipitation since last September, 15 per cent of the normal level, and is experiencing its worst drought in 200 years. The other affected provinces across the country's north and east are facing their worst in 60 years.

Despite more than 4,000 pumping stations continuing to supply water, the situation remains severe.

Average flour prices rose more than 8 per cent last month from the previous two months, and now there are fears that China may be forced to import wheat, which would lead to a further increase in prices that have already risen about 35 per cent since the middle of November.

The drought, which began in October, has hit the south-west parts of Shandong hardest, putting further pressure on politically sensitive food prices.

In a sign of how seriously the problem is being taken, Hu Jintao, the president, and Wen Jiabao, the premier, paid separate visits to stricken areas this month and called for "all-out efforts" to fight the drought.

"It's hard to know when it will rain. We must prepare for the worst and do our best to combat the drought to ensure a good harvest," Mr Wen said during a New Year visit to a reservoir in Qufu, one of the worst-affected areas.

Local media carried pictures of the premier, who is known as "Grandad Wen", holding a dead plant against a barren backdrop.

"The drought affects agricultural output, which is related to the nation's food security and the income of rural people. I worry about it," Mr Wen told a local farmer during his visit.

Hundreds of millions of Chinese rely on farming to make a living.

Rising food prices in China pushed inflation to 4.6 per cent in December after it hit a 28-month high of 5.1 per cent the month before. That put the rate for the full year at 3.3 per cent, while the economy grew by 10.3 per cent.

Snow fell in northern China last week, but drought in the region remains a long-term problem.

The authorities have struggled for years to combat a water shortage linked to climate change and surging consumption, especially among the tens of millions of people who live in Beijing and booming adjacent areas.

Good harvests are crucial to keeping meat, grains and vegetables affordable for the vast majority of poorer Chinese, who spend one-third or more of their income on food.

More than half of the 4 million hectares used for growing wheat have been hit by drought, and the government is introducing emergency funding to alleviate the problem. The capital is also in trouble. Beijing has had no rain for more than three months, the longest period in 40 years. Moreover, scores of millions of people in northern China are facing severe drinking-water shortages.

"Beijing had no snow before the spring festival, which is also the first time in 60 years," Professor Zheng Fengtian, a lecturer in agriculture and village rural development at Renmin University, wrote in his blog. He said 109 counties and cities in Hebei have not had a drop of water for three months, leaving millions of hectares of wheat production endangered.

China's winter wheat is harvested in June, and the UN Food and Agriculture Organisation says the situation could become critical if a spring drought follows the winter drought or if temperatures plunge this month.

"The ongoing drought is potentially a very serious problem," the agency said last week.

In response to the problem, China intends to invest billions of dollars in an attempt to improve water provision.

Some agricultural experts believe, however, it is too early to predict a decrease in the country's wheat output.

"We can still expect a wheat harvest if these regions have sufficient rainfall next month," Lu Bu, a researcher at the Chinese Academy of Agricultural Sciences, told the China Daily newspaper.