Bad Weather Drives China Vegetable Prices Higher and Threatens Autumn Grain Harvest
•Prices of cucumber, lettuce, cabbage and peppers experienced considerable increases compared to the previous year.
•Farmers were asked by the government to replant or switch crops, which is not always feasible.
•Autumn grain crop (rice, corn and soybeans) harvests are threatened.
The vegetable basket index in China, as reported by the Ministry of Agriculture and Rural Affairs, rose 1.98 points month over month and 9.29 points year over year in August, as bad weather tightened supply in the South.
Most of the bad weather was due to the dry to extreme drought conditions experienced in the Yangtze River Basin. The summer heatwave, which lasted 70 days, and the drought, were the worst since official recording started. According to official data, around 2.2 million hectares of agricultural land were affected.
The dryness has affected the yield and quality of several crops. A tighter supply has also provoked an increase in inter-regional crop transport. This situation translated into price hikes. According to the Ministry of Agriculture and Rural Affairs, cucumbers and bell peppers experienced the largest year-over-year (YoY) increases among vegetable crops.
According to Tridge data, in the week starting August 29, fresh cucumber prices in a wholesale market in Beijing climbed 48% month-over-month (MoM) and registered a 94% increase YoY to CNY 6.77/kg. Cucumber prices have almost tripled since their recent low in late May. Meanwhile, in the same period, fresh green bell pepper prices rose 5% week-over week (WoW) and 29% YoY to CNY 3.87/kg. Along similar lines, prices for fresh cabbage rose 26% WoW and 33% YoY to CNY 2.00/kg. Prices for fresh lettuce rose 28% WoW and YoY to CNY 3.07/kg.
The drought has also affected “middle” rice and summer corn crops. The former, which is to be harvested in autumn, presents the more serious threat. Potential lower production could reflect in lower exports to some countries such as the Philippines and South Korea, which in turn could push prices upward in the importing countries. For domestic consumption, China’s large rice reserves would offset the decline in production.
Another food product being affected by the adverse weather is meat. Livestock was being temporarily moved out of the worst affected regions in mid-August. Pig farms were also reported to be experiencing difficulties due to the same situation.
As rains are expected to alleviate some of the dryness in the weeks to come, farmers have been asked by the government to replant their current crops or in some cases, to temporarily change crops (from affected grain crops to vegetables). However, this is not always feasible because there might not be more available land. For now, drought conditions are forecasted to linger in some of the affected areas into the next few weeks.
Adverse weather and unpredictable weather changes have been known to have significant impact on agriculture. Tridge recently hosted a webinar covering some recent cases and the upcoming outlook. Find out more here.