When China goes hungry, the world shakes

From SMH.Com Au

A severe drought is threatening the wheat crop in China, the world’s largest wheat producer, 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 China 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 shockwaves through the world’s grain markets,” said Robert Zeigler, the director-general of the International Rice Research Institute in Los Banos, Philippines.

Advertisement: Story continues below The state-run media in China warned this week that the country’s major agricultural regions were facing their worst drought in 60 years. On Tuesday, the state news agency Xinhua 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 had reached record levels in January.

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 $2.85 trillion in foreign exchange 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,” Mr 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 Organisation said on Tuesday that 5.2 million hectares of China’s 14.2 million hectares of wheat fields had been affected by the drought. It said that 2.6 million people and 2.8 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 reported. ”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 1.2 centimetres of rain since September.

The Food and Agriculture Organisation, in its ”special alert”, said the drought’s effects had been somewhat tempered by government irrigation projects and relatively few days of sub-zero temperatures. The agency went on to caution that extreme cold, with temperatures of minus 18 degrees, could have ”devastating” effects.

Kisan Gunjal, the organisation’s food emergency officer in Rome who handles Asia alerts, said 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.

Typically, world food reports barely mention China, partly because many details of the country’s agriculture production and reserves are state secrets. But China, in fact, is enormously important to the world’s food supply, especially if something goes wrong.

The heat wave in Russia last summer, combined with floods in Australia in recent months, has drawn worldwide attention to the international wheat market, because Russia and Australia have historically been big exporters.

But China’s wheat industry has existed in almost total isolation, with virtually no exports or imports, until last year, when modest imports began. Yet it is huge, accounting for one-sixth of global wheat output.

The database of the UN’s food agency shows that in 2009, the last year available, China produced about twice as much wheat as the US or Russia and more than five times as much as Australia.

Currently the ground in the country is so dry from Beijing south through the provinces of Hebei, Henan and Shandong to Jiangsu province, just north of Shanghai, that trees and houses are coated with topsoil that has blown off parched fields.

China’s national obsession with self-sufficiency in food includes corn. Little known outside of China, the country’s corn industry grows one-fifth of the world’s corn, according to the Food and Agriculture Organisation’s statistics. China’s corn crop is mostly in the country’s northern provinces, where the drought is worst now.

Gunjal said the success or failure of the corn crop, as well as the rice crop, would depend mostly on rainfall this spring and summer, not the shortage of rain this winter.

– Prophecy News Watch

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