Rice price set to rise in wake of flooding

PUBLISHED : Wednesday, 22 June, 2011, 12:00am
UPDATED : Wednesday, 22 June, 2011, 12:00am


It's known as the land of fish and rice, but after more than two weeks of torrential rains that followed a prolonged drought along the middle and lower reaches of the Yangtze River, agriculture is reeling. Fears have been raised of price rises against the backdrop of already high inflation.

Four strong storm systems since June 3 have triggered flooding in 13 southern provinces, causing direct economic losses of 35 billion yuan (HK$42.07 billion), mostly in the agriculture industry, according to the National Committee for Disaster Reduction.

Analysts are warning that the price of early and mid-season rice, as well as of some fresh farm produce, could rise further amid prevailing market expectations of reduced output levels.

'Prices of some items have already risen after downpours in some southern provinces - corn and leafy vegetables, for example,' said Ma Wenfeng , an analyst at Beijing Orient Agribusiness Consultants.

Vegetables such as cabbage and lettuce have seen price surges of as much as 40 per cent following the flooding of farmland in the eastern province of Zhejiang, which was among the worst-hit regions during the latest round of deluges late last week, Xinhua reported over the weekend.

The rain hampered the reaping of wheat and oilseed rape, the two seasonal crops in the province, farmers said. 'If wheat is not reaped in time, it germinates. Such wheat cannot even [be used to] feed pigs,' said Zhou Lusong, a farmer in Zhejiang's Haining city .

Though he managed to reap all his wheat and rapeseeds before the storms, the harvest could rot if he does not get a chance to dry it in the sun.

And in Tianmen city, Hubei province, all mid-season rice seedlings, which had just been transplanted, were flooded, said Yan Xuejun, a staff worker at the Poverty Alleviation Department of the Bureau of Civil Affairs. He said mid-season rice accounted for about 70 per cent of all rice planted in Tianmen last year.

'This year the percentage could be higher, because many farmers failed to grow early-season rice, as the weather had been too dry,' Yan said. In central provinces such as Hunan and Hubei, three seasons of rice are planted - early-season in April, mid-season in May and late-season in July.

Statistics from the Hubei Provincial Bureau of Civil Affairs showed that more than 260,000 hectares of agricultural produce had been affected by the latest round of torrential rain on Friday and Saturday.

In Anhui province, the rain affected 89,000 hectares of produce, which translates to a loss of 524 million yuan, data from the provincial Civil Affairs Department indicated.

A further 42,000 hectares were hit in the nearby Jiangxi province, where 720 houses collapsed and around 40,000 people were forced to relocate.

The province, home to China's largest freshwater lake, Poyang, has also suffered losses in aquaculture. Fishermen's average income in the first five months of this year dropped by more than 70 per cent from a year earlier as the prolonged drought from January to May shrunk areas of lakes, the Jiangxi Daily reported.