Monday, July 23, 2007

Disasters raise food fears


Floods and other natural disasters are hurting China's grain output, the government said, raising the prospect of higher food prices with inflation already at uncomfortably high levels.

"Agricultural production is facing various problems, including flooding, drought, typhoon, plant diseases and insect pests," the agriculture ministry said yesterday on its website.

"Stabilizing the autumn grain supply is a big challenge."

The ministry called on farmers to expand late-harvest planting of rice and other crops to help make up for losses caused by the weather-related problems.

China's biggest grain-growing area is in the south, where floods over the past couple of months have destroyed large swaths of farmland.

The floods have also caused other problems, such as a rat plague in central Hunan province which has seen an estimated two billion rodents gnaw their way through crops that were supposed to end up on dinner plates.

Meanwhile, a severe drought is continuing in northeastern China, another crucial farming region.

"A loss in grain output this year is inevitable," said Chen Sufen, the head of a 460-hectare farm in northeast Liaoning province.

"First it was the persistent drought, and then came the bugs."

Chen said she was expecting grain output on her farm to fall by 20 percent this year.

At the same time an economist has warned of the inevitable impact on food costs nationwide.

"A decline in grain production will drive up food prices," Sealand Securities analyst Yang Yongguang said.

The warning comes after the government released data last week showing that inflation rose 4.4 percent last month, and 3.2 percent in the first six months of the year, with food prices among the biggest drivers.

Food prices have jumped 7.6 percent in the first half of the year.

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