China’s Floods Hit Grain Harvest, Put Pressure On Inflation

Li Qiang, managing director at Shanghai JC Intelligence, puts some numbers on our observation that the recent flooding would hit the forthcoming harvests hard. With official figures saying that 400,000 hectares of farmland across the country have been destroyed, Li tells Bloomberg that he expects rice output to be down 5% and cotton by 5%-10%. The summer grain harvest fell this year for the first time in the past seven years. But the autumn grain harvest is more important as it accounts for more than three-quarters of annual production in normal years. The price of rice has already risen 15% on the Chicago futures markets since June 30. Cotton has been climbing for the past year, and is now up 26% in the New York market over this time last year. As Bloomberg notes, that will make Beijing’s 3% inflation target harder to meet. And it will require judicious releases from the government’s grain stockpiles to stabilize prices.

Advertisements

2 Comments

Filed under Economy, Environment

2 responses to “China’s Floods Hit Grain Harvest, Put Pressure On Inflation

  1. When you factor in the shortfalls in wheat production in Russia this year it’s going to be a very bad year for global food production… which will make it a terrible year for the poorest people on the globe.

  2. Ho

    Perhaps we will see the rich poor gap widen quickly in China

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s