China, the world’s largest grain producer, raised its drought-emergency alert to level one, the highest class, for the first time, as dry weather threatened crops, livestock and rural incomes, Bloomberg reported.
About 143 million mu (9.5 million hectares) of winter wheat are in drought, more than 40 percent of the crop, and about a third of that is in a "severe" condition, according to the Office of Flood Control and Drought Relief Headquarters. Some 4.3 million people and 2.1 million large livestock have limited access to drinking water, the office said.
The dry weather may cut grain output, curb exports and hurt efforts by the government to boost farm incomes at a time when 20 million migrant workers have lost their jobs. President Hu Jintao and Premier Wen Jiabao have ordered "all-out efforts" to fight the drought, the official Xinhua News Agency has said.
The worst dry spell in 50 years may reduce the wheat harvest in summer "by 2-5 percent, or 2 million to 5 million tons," said Ma Wenfeng, a grains analyst at Beijing Orient Agribusiness Consultant Ltd. Still, China has 60 million tons stored in state-controlled warehouses and has "ample" supply, he said by phone from Beijing today.
Wheat prices jumped the most in two weeks yesterday because of the crop damage in China, the biggest grower. Wheat for March delivery was up 0.2 percent at $5.63 a bushel on the Chicago Board of Trade at 12:54 p.m. Singapore time today.
