Grains of wrath as drought hits hard

Updated: 2012-08-30 07:25

By He Na (China Daily)

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Grains of wrath as drought hits hard

Corn stalks, severely damaged by a widespread drought, at a farm near Oakland City, Indiana, on Aug 15. Record temperatures in US farming states have hampered crop production and will likely send corn and soybean prices to record highs, according to the Department of Agriculture. Saul Loeb / AFP

Grains of wrath as drought hits hard

Extreme weather across the globe is recipe for surging food prices, reports He Na in Beijing.

Shi Hongmin has been panic buying recently. Two enormous bottles of cooking oil and two 25-kg sacks of flour are just some of his purchases.

The Beijing resident, 61, is reacting to news that global grain output will decline as a result of a severe drought in the United States and excessive worm damage to crops in a number of regions in China.

The 3-square-meter kitchen in Shi's family apartment is too small to store all the goods he's bought so he's started piling them up in the corridor.

Conditions are getting increasingly cramped for the five people living in the crowded 50-sq-m apartment.

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Drought has gripped around 85 percent of US corn-growing farmland. More than 80 percent of land devoted to growing soybeans and about 70 percent of land in cattle-raising areas have also been hit by drought, according to the US Department of Agriculture. Nearly half of the corn and soybean-producing areas are experiencing levels of drought classified as extreme or exceptional.

This has resulted in lower yields and earlier harvests. The drought is the most severe to hit the world's largest producer of grain and meat since 1988.

Besides the US, a number of major grain-producing nations - Russia, India, Ukraine, and Kazakhstan - have also been plagued by appalling weather. Russia, the world's largest wheat exporter, is facing a decline in farmland of 4.4 million hectares, while the Ukrainian Ministry of Agriculture has said that the country's annual grain yield will decline by 20 percent from last year.

"Experience tells me that the price of grain will rise, so I am saving money," said Shi. However, sadly for him, his foresight hasn't won him any praise from his son and daughter-in-law.

"My wife and I often eat out, and my son is only 26 months old, so we really don't need to store so much food. My parents once stored too much rice, and the bugs crawled everywhere," complained Shi's son, Liang.

"My son only contributes 1,000 yuan ($157) a month to cover the cost of the family's food. If I didn't budget carefully, how could such a small amount of money stretch far enough? I am not joking: Every day I expect to see the price increases that will prove I was right," said the Shanxi province native, who moved to the capital with his wife to help take care of their grandson.

Despite the family criticism, Shi's prediction may be correct. On Aug 21, cooking oil suppliers handed in a request for higher prices for the product to the Wu Mart Group, according to Guo Yang, director of the public relations department at the retail chain store operator in Beijing. The producers say that the price of the raw material is surging because of the drought in the US.

"It's the first time suppliers have banded together to request a price increase, so it could well be that the US drought has started to affect the Chinese market," said Guo.

"I know they've also made the same request to other retailers. We still have oil in reserve, so we will wait. But if other retailers agree to raise prices, we will do the same," she said.

Hao Xueyong, cereal and cooking oil purchasing director of the Beiguo Supermarket outlet in Shijiazhuang, Hebei province - owner of the province's largest chain store operator - confirmed that the price of cooking oil is rising.

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