UN Warns Chinese Drought Will Affect Food Prices Globally

China is facing one of the worst droughts in decades and that's going to have a huge effect on global food prices. The UN Food and Agriculture Organization issued an alert Tuesday that a severe drought was threatening the wheat crop in China, which will have a spillover effect on global food prices and will cause shortages of water in China.

World wheat prices are already surging and have been widely cited as one reason for protests in Egypt and elsewhere in the Arab world. China has been essentially self-sufficient in grain for decades for national security reasons, and any move by China to import large quantities of food in response to the drought could drive international prices even higher, creating serious problems for less affluent countries that rely on imported food.

“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 S. Zeigler, the director general of the International Rice Research Institute in Los Banos, Philippines.

The Food and Agriculture Organization said that 5.16 million hectares, or 12.75 million acres, of China’s 14 million hectares of wheat fields had been affected by the drought, and that 2.57 million people and 2.79 million head of livestock faced shortages of drinking water.

Chinese state news 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,” reported Xinhua, the state-run news agency. “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 centimeters, or 0.47 inch, of rain since September but did not provide a comparison for normal rainfall for the period.

While China's wheat crops are in dire shape, the situation in the US isn't all that much better. Parts of the Southern US are dealing with the effects of an ongoing rainfall deficit that have reduced water tables and reservoir levels throughout the region. That too has affected crop prices and quality.