More confirmation of a food crisis? China says winter wheat crop could be the worst in history.

 

File photo of a worker harvesting grain. Reuters. 

China says that their winter wheat crop could be the worst in history, raising fears of a greater food crisis. Reuters. Heavy rainfall caused late planting for up to 1/3rd of normal wheat crops which lead to 20% of the the wheat crops to be of a lower grade. The bad news comes on fears of a global food crisis caused by the war between Russia and Ukraine, which together account for 29% of wheat exports. The prices of wheat has skyrocketed due to the war. China will attempt to fix the problem by trying to get a bumper harvest of summer crops to make up for wheat shortfalls. They will also try to calm pork prices, after their massive herds were damaged due to an African Swine Fever outbreak. 

My Comment:

This is actually terrible news and news that should be getting more coverage than it is. China is a huge country and they will need to feed their people. They also have a long history of starvation and are more sensitive to the issue than most western countries. 

I'm not worried about starvation in China. They have the cash reserves to buy up all the wheat they need. What I am worried about is that the increased demand for wheat caused by this bad harvest will cause prices to get even worse. That could lead to other countries having major problems with being able to afford feeding their people. I wrote last week that Egypt is one of the countries that are especially vulnerable to high food prices. 

This is going to hurt everyone though, regardless of where the crops fail. High food prices are bad for everyone. High prices were a large factor in the Arab Spring and the world is still trying to recover from that. And even if it doesn't lead to more instability, war and violence, the economic damage is going to be huge. 

There are some ways this could be avoided. The most obvious is ending the war in Ukraine and lifting sanctions against Russia. Both things would ensure that exports from both countries aren't disrupted long term. The longer the war goes on the worse the food situation gets. If Russia wins the war quickly or a peace deal is made things should be fine. If the war leads to a stalemate or a long term insurgency happens than food prices are going to explode even worse than it has already. 

I almost wonder if it's time to start asking people in America to start "victory gardens" like they did in World War II. Having people grow some of their own food could reduce the prices by reducing demand. The impact would be small but it would help. And if I was in an especially vulnerable country like Egypt, you bet I would be trying to grow whatever food I could...