Identifier
Created
Classification
Origin
09BEIJING331
2009-02-10 09:47:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Beijing
Cable title:  

CHINA DROUGHT: NOT A CRISIS YET

Tags:  ECON SENV EAGR CH 
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VZCZCXRO7113
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0331 0410947
ZNR UUUUU ZZH
O 100947Z FEB 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2198
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUCPDOC/USDOC WASHDC IMMEDIATE
RUEHRC/DEPT OF AGRICULTURE WASHDC IMMEDIATE
RUEHOO/CHINA POSTS COLLECTIVE
RUEHRC/USDA FAS WASHDC
UNCLAS BEIJING 000331 

SENSITIVE
SIPDIS

STATE PASS USDA/ERS
STATE PASS USDA/FAS/OSTA CHINA DESK
STATE PASS USTR FOR STRATFORD
TREASURY FOR OASIA

E.O. 12958: N/A
TAGS: ECON SENV EAGR CH
SUBJECT: CHINA DROUGHT: NOT A CRISIS YET

(U) This cable is Sensitive But Unclassified.
Please protect accordingly.

UNCLAS BEIJING 000331

SENSITIVE
SIPDIS

STATE PASS USDA/ERS
STATE PASS USDA/FAS/OSTA CHINA DESK
STATE PASS USTR FOR STRATFORD
TREASURY FOR OASIA

E.O. 12958: N/A
TAGS: ECON SENV EAGR CH
SUBJECT: CHINA DROUGHT: NOT A CRISIS YET

(U) This cable is Sensitive But Unclassified.
Please protect accordingly.


1. (SBU) Summary and Comment: China declared a
drought emergency on February 5 in seven major
agricultural provinces in central China. Although
the drought is serious, it should have limited
impact on overall Chinese agricultural production
and food supply. A short-term drought of this
nature is not unprecedented and could end quickly
with a couple of good rain showers. Light rainfall
over the weekend in a number of areas has already
reduced the official estimates of affected land.
End Summary and Comment.


2. (SBU) Following the February 5 announcement of a
drought emergency in Henan, Anhui, Shandong, Hebei,
Shanxi, Shaanxi, and Gansu, official Chinese media
has focused on the drought's impact on the winter
wheat crop, the primary winter crop in the affected
area. Foreign Agricultural Service (FAS) analysis
suggests that the drought will have little impact on
China's total wheat production. At this stage, FAS
estimates losses of between 2.5 to 3.5 percent of
total production. The winter wheat crop is still in
its dormancy stage and less impacted by dry soil
conditions. When the wheat begins to emerge in the
end of March or early April, agronomists will have a
better understanding of the actual impact.
Nonetheless, futures markets in China have already
reacted to press statements by sending prices higher
on wheat. Misguided media reports are playing a
role by suggesting that last year's catastrophic
winter freeze and Sichuan earthquake depleted wheat
reserves. In truth, China has very high stocks,
estimated to be about half of the annual production.


3. (SBU) Premier Wen Jiabao has made inspection
tours to drought-affected areas and official media
reports that provincial authorities have already
seeded clouds and are taking other drought-relief
measures. The Central Government is reportedly
allocating drought relief funds, although it is
unclear how much is additional to recently-announced
funding increases for agriculture and rural
development.


4. (SBU) On February 10 Tsinghua University
hydrologist Yang Dawen told Emboffs he agrees with
the government's assessment that the drought is
serious. But Yang also said the drought's impact is
limited to agriculture because water for industrial
use and human consumption comes mostly from
reservoirs and groundwater. Government measures to
improve irrigation and dig wells, according to Yang,
will have very limited immediate impact. Yang also
said one or two good rain showers would make the
situation much better.


5. (SBU) Post will continue monitoring the drought
and report on its impact on agriculture and the
overall economy.

PICCUTA