Drought rattles farmers in eastern China

Terra Daily: …China is the largest global producer and consumer of wheat. A bad harvest would not only devastate local farmers -- if China were to buy a large amount of wheat overseas due to a crop failure, world commodity prices would surge.

The government has allocated 13 billion yuan ($2 billion) to combat the drought, and the central bank announced this week it would provide 10 billion yuan in loans to farmers. But the aid injection cannot make the rains come...The central government is implementing a number of emergency measures such as diverting water to the worst-affected areas and building wells.

….According to Ma Wenfeng, an analyst who specialises in cereal markets at Orient Agribusiness Consultant in Beijing, China's winter wheat harvest should only diminish by around two percent if the situation does not deteriorate. But "anticipation of bad (wheat) harvests linked to droughts in China, India, East Africa, as well as a bad rice harvest in Southeast Asia" has put an upward pressure on prices on international markets, Ma adds.

Experts are calling on China to implement more long-term measures to fight drought, so that the dire situation in Shandong and other affected provinces does not recur.