China is the next concern as food prices soar

PINGGU, China – From village to village, grain harvests in China have been inconsistent this season.

A field in the plains east of Beijing was patchy, with knee-high emerald stems in some places and almost soon elsewhere, damaged by last fall’s torrential rains. The next village, a luxurious wheat crop thrived after the bright sunshine this spring and the slow, thunderous rains this spring.

China’s winter wheat harvest next month is one of the big uncertainties in an already struggling global economy high commodity prices, particularly in the highly crop-dependent regions of Russia and Ukraine. If the Chinese harvest is negative in the coming weeks, it could further increase food prices. aggravating hunger and poverty in the poorest countries in the world.

Global food prices have already risen sharply, with wheat up nearly 80% since July.

It was a perfect storm of war and time.

The Russian invasion, including the blockade of ports, he interrupted supplies from Ukraine, a major exporter of grain long known as the granary of Europe. The United Nations World Food Program call last week for the immediate reopening of Ukrainian ports, “before the current global hunger crisis gets out of control”.

Energy prices have risen since before the war, prompting many fertilizer producers to slow down or close their factories. As fertilizer costs rise, many farmers around the world use less fertilizer, contributing to smaller yields.

Bad weather added to the challenges. Has been hot this spring in India, a major exporter of wheat, while drought has damaged crops in the southern Great Plains of the United States and in East Africa.

It was a double blow to East African nations, including Somalia, Kenya and Ethiopia, which are heavily dependent on Russia and Ukraine for most of their grain imports. Bread prices have doubled in some areas. The World Food Program warned on Friday that “44 million people around the world are marching towards hunger.”

China, the world’s largest producer and consumer of wheat, is the next pressure point for prices.

The floods last fall left the soil so waterlogged that the roots of the wheat couldn’t easily penetrate it, said Ren Ruixia, a 45-year-old farmer, as she observed a wheat field that looked like she had a bad haircut. The coronavirus blockade has also delayed the arrival of fertilizers, she said.

“Right now, it looks like the harvest is definitely affected,” Ms. Ren said in late April. “But it also depends on the weather next month: how much rain we will have”.

Adequacy of food supplies has long been a central issue in China, where tens of millions of people died of famine in the early 1960s during Mao’s disastrous agricultural experiments. Strictly enforced rules require that a large portion of the country’s land area – 463,000 square miles, larger than Texas – be cultivated. Rural villages are sometimes demolished to maintain the national acre target.

Xi Jinping, China’s top leader, put food security at the center of attention, particularly when commodities became a trade issue with the United States during the Trump administration.

“In the future, the demand for food will continue to increase and the balance between supply and demand will become increasingly tight,” he warned in a political speech published on March 31 in Qiushi, the leading theoretical newspaper of the Chinese Communist Party. “Furthermore, the international situation is complicated and serious and we must always be on alert to ensure food security.”

China’s agriculture minister, Tang Renjian, sparked international concern in early March when he said the wheat harvest would be the worst on record due to last fall’s flood. Other agriculture ministry officials have issued warnings, albeit not so pessimistic.

Western experts analyzing satellite photos of the Chinese harvest are generally less concerned than Chinese officials. The United States Department of Agriculture estimated last month that China’s wheat crop would be 3% lower than last year.

“I don’t think it’s going to be a disaster, but I don’t think it’s a normal harvest either,” said Darin Friedrichs, founder and director of market research at Sitonia Consulting, a Shanghai-based commodity analysis firm.

Senior Chinese officials have issued pessimistic warnings in the past, obviously in 2011, to make sure lower-level officials pay close attention to the crop. A global food shortage could make Chinese officials cautious, especially this year.

China has a sizeable supply of emergency grain. But some of the grain may only be suitable for animal consumption given its poor storage, said Joseph W. Glauber, a senior researcher at the International Food Policy Research Institute in Washington.

“The international situation is complicated and serious and we must always be on alert to ensure food security: we would prefer to produce more and increase reserves,” said Xi. said in the remarks issued at the end of March.

Coronavirus complicates things. The blockades this spring have disrupted agriculture in large agricultural areas such as Jilin Province. And many families, who have been prevented from leaving their apartments to go shopping, have struggled to find enough food.

Some people have stockpiled, worried they will face the same lockdown restrictions. Cai Wenling, a 43-year-old resident of Chongqing, said she bought four gallons of canola oil, nearly 100 bottles of mineral water, four weeks of milk, and so much pork, beef and chicken that her refrigerator and freezer were full. She still plans to buy another 110 pounds of rice.

“Even though I stocked up, I still feel confident in preventing the Chongqing outbreak.” Ms. Cai said, “For middle-aged people like us, we would be more conservative when we consider things. We have the confidence, but the preparation avoids the danger “.

China’s nervousness about its food supply could ripple along the global supply chain.

China has the largest foreign exchange reserves in the world, so it has the ability to buy all the grain it needs on world markets. But doing so could push the price of wheat even higher, making it inaccessible in many poor countries.

China’s next move will depend on the harvest.

In the villages around Pinggu, wheat farmers have given different ratings. Much depends on how well-drained their fields are, but everyone agreed that last fall’s rain was substantial.

Rain was pouring in torrents week after week in China’s wheat belt, drown hundreds of people in tunnels and along the banks of rivers. In Pingyao, the centuries-old city walls, made of mud cores, collapsed after getting soaked last fall.

Zhang Dewang, a 69-year-old resident of Daxingzhuang Village, west of Pinggu, said the wheat in his family’s field was growing quite well. The crop was sown unusually late, after the autumn equinox, the traditional last day of planting in the area.

But in recent years, the weather has remained warm later, Mr. Zhang said, so the wheat has a chance to sprout before the winter frosts force it into dormancy.

“The wheat is growing so well,” he said. “He’s looking great.”

Claire Fu, Liu Yi Other You there contributed to the research.