China Declares Drought Emergency as Crops Threatened

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Feb. 6 (Bloomberg) -- 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.

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.

‘Supportive’

“This is supportive for the Chicago market,” said Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co. “But I don’t think this will push the price sharply higher for now as China appears to have enough stockpiles,” he said.

The State Council has earmarked a further 300 million yuan ($44 million) to a relief fund on top of the 100 million yuan already allocated. The dry conditions have affected about 155 million mu of all crops nationwide and spread to 12 provinces.

“China has ample wheat for now,” Beijing Orient’s Ma said. “The state reserve has the ability to control the wheat market,” he said. The 60 million ton stockpile is equal to more than half of annual production, he said. China boosted its wheat output for the fifth year in 2008 to an estimated 113 million tons, according to the U.S. Department of Agriculture.

The drought is the worst to hit northern China in half a century, Xinhua said yesterday, citing a State Council meeting. Average precipitation so far in the winter wheat area is the lowest in 30 years, the China Meteorological Administration said.

Forecast Mostly Dry

Drought-hit areas of northern China will go without rain today, the administration said on its Web site. Shaanxi, Shanxi, Henan, Shandong, Anhui and Hubei provinces may get 1 millimeter to 5 millimeters of rain tomorrow and on Feb. 8, it said.

As many as 157 million mu of wheat-growing land were affected by drought in northern China, the Ministry of Agriculture said on its Web site. Almost 65 million mu in Henan, Anhui, Shandong, Hebei, Shanxi, Shaanxi, Gansu and Jiangsu provinces were “severely” affected, it said.

Wheat for May delivery dropped for the first trading day in eight on the Zhengzhou Commodity Exchange, declining 0.4 percent to 2,065 yuan a metric ton.

http://www.bloomberg.com/apps/news?pid=2...refer=asia

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China Fights Drought With Cloud-Seeding

By Joe McDonald, Associated Press Writer

BEIJING — Parts of China's parched north got light rain after authorities fired shells loaded with cloud-seeding chemicals into the sky, but there was no end in sight for its worst drought in five decades, the government said Sunday.

Beijing has declared an emergency across China's north, where 4.4 million people lack adequate drinking water and winter wheat crops are withering.

"The drought situation will not be eased in the near future," said a national weather bureau statement.

Some areas got a sprinkling of rain and sleet Saturday and Sunday after clouds were hit with 2,392 rockets and 409 cannon shells loaded with chemicals, the weather bureau said. It said clouds were thin and moving out of the region, making conditions poor for more rainmaking.

Rainfall in northern and central China is 50% to 80% below normal, according to the Flood Control and Drought Relief Office. The official Xinhua News Agency said the drought that started in November threatens up to half the wheat crop in eight provinces — Hebei, Shanxi, Anhui, Jiangsu, Henan, Shandong, Shaanxi and Gansu.

On Saturday, one county in Shaanxi got 0.9 inches of precipitation, while other areas received less than 0.2 inches, the weather bureau said. On Sunday, about 0.08 inches fell.

The state television midday news Sunday showed farmers with parched wheat seedlings that were barely ankle-high.

Beijing has promised $12.6 billion in aid to struggling farmers. That will add to the strain on government finances as it carries out a multibillion-dollar stimulus package to boost slowing economic growth.

Premier Wen Jiabao inspected drought relief work in Henan over the weekend and said ensuring a good harvest was critical to the success of the stimulus, the Xinhua News Agency and state television reported.

Wen visited a village where soldiers and police were helping farmers irrigate crops with water from a tank truck. The premier was shown using a hose to water a field and talking to farmers.

"This is an extremely big drought. It is a test of our party committees, government and leaders at all levels," Xinhua quoted Wen as telling local leaders.

Rural hardship is politically sensitive at a time when 20 million migrants have returned home after losing jobs because of the economic slump. The communist government is trying to curb the potential for unrest by pressing companies to avoid more layoffs.

The Agriculture Ministry said the drought also is to blame for an outbreak of a fungal disease called stripe rust that attacks wheat. It said the disease can cut output by up to 40%.

Water Resources Minister Chen Lei said water levels in the Yellow River, a key source for farms and a string of cities, are down 20% to 40%, the Communist Party newspaper People's Daily reported.

Across eight provinces, irrigation has brought water to about half the 26.5 million acres of drought-affected wheat crops, the Agriculture Ministry said Sunday on its website.

http://www.usatoday.com/weather/drought/...ding_N.htm