Sat, Feb 12, 2011 - Page 9 News List

UN issues warning on China drought

Experts fear that if China buys wheat on the open market, prices could soar past already record levels

by Keith Bradsher  /  NY Times News Service, HONG KONG

Illustration: Tania Chou

The UN’s food agency warned on Tuesday that a severe drought was threatening the wheat crop in China, the world’s largest wheat producer, and resulting in shortages of drinking water for people and livestock.

China has been essentially self-sufficient in grain for decades, for national security reasons. Any move by Beijing to import large quantities of food in response to the drought could drive international prices even higher than the record levels recently reached.

“China’s grain situation is critical to the rest of the world — if they are forced to go out on the market to procure adequate supplies for their population, it could send huge shock waves through the world’s grain markets,” said Robert Zeigler, the director general of the International Rice Research Institute in Los Banos, Philippines.

The state-run media in China warned on Monday that the country’s major agricultural regions were facing their worst drought in 60 years. On Tuesday, Xinhua news agency said that Shandong Province, a cornerstone of Chinese grain production, was bracing for its worst drought in 200 years unless substantial precipitation came by the end of this month.

World wheat prices are already surging and have been widely cited as one reason for protests in Egypt and elsewhere in the Arab world. A separate UN report last week said global food export prices reached record levels last month. The impact of China’s drought on global food prices and supplies could create serious problems for less affluent countries that rely on imported food.

With US$2.85 trillion in foreign exchange reserves, nearly three times that of Japan, the country with the second-largest reserves, China has ample buying power to prevent any serious food shortages.

“They can buy whatever they need to buy and they can outbid anyone,” Zeigler said.

China’s self-sufficiency in grain prevented world food prices from moving even higher when they spiked three years ago, he said.

The UN Food and Agriculture Organization (FAO) said on Tuesday that 5.16 million hectares of China’s 14 million hectares of wheat fields had been affected by the drought. It said that 2.57 million people and 2.79 million head of livestock faced shortages of drinking water.

Chinese state media are describing the drought in increasingly dire terms.

“Minimal rainfall or snow this winter has crippled China’s major agricultural regions, leaving many of them parched,” Xinhua said. “Crop production has fallen sharply, as the worst drought in six decades shows no sign of letting up.”

Xinhua said that Shandong Province, in the heart of the Chinese wheat belt, had received only 1.2cm of rain since September. The report did not provide a comparison for normal rainfall for the period.

The FAO, in its “special alert” on Tuesday, said the drought’s effects had been somewhat tempered by government irrigation projects and relatively few days of subzero temperatures. The agency went on to caution that extreme cold, with temperatures of minus 18°C, could have “devastating” effects.

Kisan Gunjal, the FAO food emergency officer in Rome who handles Asia alerts, said by telephone that if rain came soon and temperatures warmed up, then the wheat crop could still be saved and a bumper crop might even be possible.

On Tuesday, Chinese meteorological agencies were warning of frost for the next nine nights in the heart of Shandong Province, with temperatures falling to as low as minus 6°C. They forecast little chance of precipitation over the next 10 days except for the possibility of a light rain or a dusting of snow, which came on Thursday.

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