Heat Wave in Northern China Adds to Mounting Agricultural Risks

A heat wave in northern China is the latest threat to agricultural production in the country as the El Nino weather pattern brings hotter and drier conditions than normal.

(Bloomberg) — A heat wave in northern China is the latest threat to agricultural production in the country as the El Nino weather pattern brings hotter and drier conditions than normal.

The mercury approached 42C (107.6F) in Beijing and Tianjin late last week, with fifteen other weather stations in northern provinces including Hebei and Shandong also reporting record heat.

The extreme temperatures and low rainfall are expected to continue in northern China this week, the National Meteorological Centre said in a report on Monday. That could impact the output of crops including wheat, corn, soybeans and cotton. 

The heat is affecting the growth of corn and soybean crops in parts of northeastern China, the weather center said in the report. It could also hinder timely planting of summer corn, lead to more diseases from pests, was well as disrupt cotton output from the Xinjiang region in the the northwest, it said.

Read More: A Record-Breaking Heat Wave Is Baking Northern China

The dry conditions in the north comes as heavy rain in the south looks set to impact rice production. The growing array of agricultural risks suggests weather disruptions could be greater this year than in the summer of 2022, when high temperatures pushed up food prices and inflation.

“Last year’s heat wave gives some sense of the risks to China’s food supply and the potential impact on prices,” Capital Economics said in a note by analysts including Julian Evans-Pritchard. 

After adjusting for seasonality, the food component of the consumer price index rose 3.8% between June and October last year, adding 0.8 percentage point to headline inflation, it said in the note on Friday.

The Week’s Diary

(All times Beijing unless noted otherwise.)

Monday, June 26

  • Mining investment forum in Changzhou, day 1

Tuesday, June 27

  • World Economic Forum’s Tianjin summit, day 1
  • Offshore wind summit in Tangshan, day 1
  • Mining investment forum in Changzhou, day 2

Wednesday, June 28

  • China industrial profits for May, 09:30
  • CCTD’s weekly online briefing on Chinese coal, 15:00
  • Summer coal fair in Shandong, day 1
  • World Economic Forum’s Tianjin summit, day 2
  • Offshore wind summit in Tangshan, day 2

Thursday, June 29

  • Summer coal fair in Shandong, day 2
  • World Economic Forum’s Tianjin summit, day 3
  • Offshore wind summit in Tangshan, day 3

Friday, June 30

  • China’s official PMIs for June, 09:30
  • China weekly iron ore port stockpiles
  • Shanghai exchange weekly commodities inventory, ~15:30

On the Wire

China said it supports Russia’s actions to maintain national stability, a day after Moscow defused the biggest threat to President Vladimir Putin’s rule. 

Two more Chinese developers have failed to meet dollar-bond payments, occurring amid renewed home-sales softness and a lack of aggressive stimulus. 

The onshore yuan reopened from a holiday on the back foot, despite a move by China to slow its slide with a stronger-than-expected reference rate for the managed currency.

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