When China goes hungry, the world shakes

The impact of China’s drought could have serious effects on global food prices and supplies

Chinese farmer during 2010 drought

Keith Bradsher
Sydney Morning Herald

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.

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.

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