China, Largest Wheat Grower, Facing Threat of Drought

China, the world’s largest wheat producer, is contending with severe drought in the main region growing winter varieties of the grain, adding to concern about food supply at a time of record global prices.

Rainfall has been “substantially” below normal in the North China Plain since October, with a thinner cover of snow that protects plants against frost, the United Nations’ Food and Agriculture Organization said in a report today. That may harm the crop scheduled to be harvested in June, the FAO said.

Wheat traded in Chicago, a global benchmark, surged 76 percent in the last year as drought in Russia, flooding in Canada and parched fields across Europe ruined crops. Protests partly linked to food prices have erupted across North Africa and the Middle East in the last month, spurring governments to accelerate grain purchases to contain domestic prices.

“The drought has been bad enough for long enough in China that the crop is not likely to be what it was in 2010,” said Alex Bos, a London-based analyst at Macquarie Bank. “The thing with winter kill is there’s no way you can quantify any of the damage until the crop comes out of dormancy.” (more)