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Commodity Intelligence Report
August 17, 2006

Severe Drought in Chongqing Hurts Agricultural Production

Unusually hot and dry weather has caused drought conditions to develop in the Sichuan Basin (Chongqing Municipality and Sichuan province).  According to local sources, more than 1.3 million hectares of farmland suffers from drought as of August 16, and more than 280,000 hectares have been destroyed.  Some locations in the basin have had no measurable rainfall for more than 40 days, and the current dry weather pattern is expected to continue through the end of August.  Temperatures have been higher than normal this summer, often exceeding 40 C for several consecutive days.  Several typhoons have brought heavy rain in July and August to southern China, but almost none of the rainfall reached the Sichuan basin.  AVHRR and MODIS satellite imagery for the region shows hazy conditions but no sign of rain-producing clouds. 

The Yangtze River near Chongqing reportedly dropped to a 100 year low this month, and several tributaries were nearly dry.  About 2/3 of the villages in the municipality and more than 7 million head of livestock are short of drinking water.  The supply of water for irrigation and for generating hydroelectric energy has dropped significantly.  Direct economic losses are conservatively estimated at more than US $1 billion US, with agricultural losses at more than US $240 million.


Map of Chongqing-

chongqing mapAgricultural impacts

1.  The drought is most severe in Chongqing municipality, a region with a population of 30.9 million (2001) that was part of Sichuan province until 1997.  According to local government officials, the drought has had a significant direct impact on the production of grain, vegetables, livestock, milk, poultry, and eggs.  The corn crop has been severely stressed and local production may drop by 30 percent or more. 

2.  Vegetable production is forecast down 20 to 30 percent, causing market prices to rise by more than 50 percent.  Drought conditions have made it difficult to plant autumn-harvested vegetables, so the supply shortage is expected to continue for several months. 

3.  The drought has reduced the quantity and quality of fodder crops for cattle and other grazing animals.  According to one report, about 60 percent of fodder crops in Chongqing have withered.  Lower fodder supplies have forced farmers to purchase more corn, thus increasing their feed costs. 

4.  The extreme heat has caused above-normal animal mortality (especially chickens) and lowered the production of eggs, milk, poultry meat, rabbit meat, and pork.  Lower production has caused higher prices for consumers, while the increased cost of fodder, feed and water will reduce farmers’ profits.  

Sichuan and Chongqing normally produce about 7.4 million tons of corn per year, accounting for about 6 percent of national production.  Their share of national meat, milk and egg production is about 10 percent, 3 percent, and 7 percent, respectively.  The full impact of the current drought on agricultural production will not be known for several more weeks.

Current USDA area and production estimates for grains and other agricultural commodities are available on PECAD's Agricultural Production page or at PSD Online.

For more information contact Paulette Sandene | | (202) 690-0133

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