China prepares for ‘severe,long-lasting drought’

China's national weather bureau forecasts little if any rain for the Shandong region through Feb. 17.

Chinese officials said today they were preparing for a severe,long-lasting drought in several parched provinces,causing wheat prices to spike on the prospect of the world’s largest consumer putting pressure on a global supply that’s already squeezed.

Premier Wen Jiabao led a State Council meeting today on increasing grain production in the country that’s both the world’s largest wheat grower and largely self-sufficient in supply.

The UN’s food agency has warned that the months long drought is driving up the country’s wheat prices,and now the focus is on whether China will buy more from the global market,where prices have already risen about 35 per cent since mid-November.

The rising prices add to growing concerns in China about inflation,which the government sees as a potential source of social unrest. Average flour prices rose more than 8 per cent in January from the previous two months.

Wheat futures were up today at both the Chicago Board of Trade and the Zhengzhou Commodity Exchange in China,where prices for September delivery hit a new high. They were at 3,051 yuan (USD 463) a ton today night.

State television broadcast images today of withered crops in cracked earth. State media have said the eastern province of Shandong faces its worst drought in 200 years and that the other affected provinces across the country’s north and east are facing their worst in 60 years. Shortages of drinking water have affected 2.6 million people.

China’s national weather bureau forecasts little if any rain for the Shandong region through Feb. 17.

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“What we are doing now is making full preparations to deal with a severe,long-lasting drought,” said the director of emergency relief at Shandong’s weather bureau. Like many Chinese officials,he would not give his name.

China has said the drought is mainly affecting Shandong,Jiangsu,Henan,Hebei and Shanxi,which grow more than two-thirds of the country’s wheat.