SHANGHAI – THE impacts of China’s worst drought in 50 years have been served up on the nation’s dining tables as the price of rice and vegetables from drought-hit provinces have skyrocketed.
The average price of staple foods in 50 cities has increased significantly, and the price of some leaf vegetables has jumped 16 per cent in one month, according to data from the National Bureau of Statistics.
Decreased production because of the drought has been cited as the major reason for price increases, and the prices of rice and vegetables may not drop soon, according to a report by the Ministry of Agriculture.
Statistics from the Office of State Flood Control and Drought Relief Headquarters show that an area of nearly 7 million hectares of arable land has been affected by the drought, with Hubei, Hunan, Jiangxi, Anhui and Jiangsu provinces most seriously affected.
‘I didn’t buy many leaf vegetables in the last week because the price is getting crazy,’ said Zhang Weirong, a 67-year-old Shanghai resident. ‘Cabbage used to be as cheap as paper, and for 5 yuan (95 cents) you would get too many cabbages to carry home,’ she said.
She has had to switch to melons and pumpkins, which are getting cheaper this year. She also changed from eating porridge for breakfast to noodles. ‘My grandson said he doesn’t like the dishes I cook these days, but what else can I do?’ she said. — CHINA DAILY/ANN
Feb. 9 (Bloomberg) — A global sugar shortage, which drove prices to the highest level in three decades, may peak in the third quarter this year on demand from the U.S., Mexico, India and Pakistan, according to U.S.-based Tropix Capital Management.
“As we enter the second quarter, we enter the inter-crop period for South Brazil when export supply is minimal,” Sean Diffley, founder of the hedge fund and former head of sugar trading at ED&F Man Holdings Ltd., said by email. “Countries like Russia will return to the market in force. The acutest part of the deficit may not be apparent until the third quarter.”
India, China, Indonesia, Pakistan, Egypt and Russia are among countries planning to buy sugar to cool domestic prices, worsening a deficit that may reach 11.92 million tons in the year ending April 30, up from 8.32 million tons predicted in October, Kingsman SA said yesterday. The shortfall may be 5 million to 6 million tons this season, according to Tropix.
“The world stocks-to-use ratio should reach 20 year lows in the second half of this year,” said Diffley, who worked for 16 years at ED&F Man, one of the biggest sugar trader.
India, the biggest user, may need to import an extra 2.5 million to 3 million tons this season to meet a 7 million ton deficit, according to Kingsman. Pakistan, Asia’s third-biggest user, plans to purchase 1.25 million tons by June. The country “apparently bought 100,000 tons” from Cargill Inc. in the past few days, Michael McDougall, a Newedge USA senior vice president said yesterday in a report from an industry event in Dubai.
China, the biggest consumer after India, may have a deficit of 3.3 million tons this year after drought and cold weather cut yields, the Guangxi Bulk Sugar Exchange Center said last month. Thailand, the second-biggest exporter, may produce 7.2 million tons in the year started in November, less than the forecast.
“There’s a real rationale to be invested in sugar, at least until March,” when the Brazilian harvest begins, Hussein Allidina, head of commodity research at Morgan Stanley, said in an interview in Dubai. Prices will extend gains as a deficit was expected to last through the season ending Sept. 30, he said.