Drought to Persist in China, U.S. Europe Wheat Areas, U.K. Forecaster Says

Drought conditions may persist in wheat-growing areas from China, the world’s largest grower and consumer, to the U.S. and Western Europe, hurting crops and lifting prices, British Weather Services said.

The La Nina event is likely to continue to block rain from moving into the wheat-growing regions in the U.S. and China through mid-May, while the North Atlantic Oscillation will curb significant rainfall in France, Germany and the U.K., preventing the replenishment of soil moisture, Jim Dale, a senior risk meteorologist at British Weather said.

Dry weather may curb grain output, further boosting world food prices that rose to near a record in April and adding to pressure on central banks from Beijing to Brasilia to increase interest rates. About 44 million people have been pushed into poverty since June by the “dangerous levels” of food prices, World Bank President Robert Zoellick said in February.

“A lot of things are going in the wrong direction, with areas that don’t usually get rains getting more rainfall, while those areas where you’d expect rains, having drought,” said Dale, who correctly predicted last month that drier conditions will persist in China through this month. “Prices are going to go higher rather than lower.”

Corn in Chicago has almost doubled in the past year and on April 11 touched $7.8875, the highest price since June 2008. The July contract dropped 0.2 percent to $7.075 a bushel at 10:14 a.m. Singapore.

La Nina is the cooling of the Pacific Ocean which can cause flooding in Southeast Asia and dry conditions to corn and soybean areas in Argentina. The North Atlantic Oscillation is a shift in atmospheric pressure that can determine U.S. weather.

Output Curb

Dry weather may jeopardize farmers’ plans to boost global production and replenish stockpiles that have been drained after the worst drought in at least half a century in Russia and excessive rains in Canada and Australia slashed harvests of food-quality wheat.

The International Grains Council lowered last month its outlook on global wheat production in the 2011-2012 season by 1 million tons to 672 million metric tons, matching global demand, because of “less than ideal conditions for some crops” in the U.S., the European Union and China. Further losses to the crop may cause production to lag behind demand for a second straight year, draining inventories.

Dry weather threatens to curb output in growing regions in China after similar conditions caused the winter-wheat crop in the U.S., the largest shipper, to deteriorate, while England had the hottest April in at least 352 years.

‘Very Late’

“It’s getting very late now in the growing season,” Dale said in a phone interview from London, referring to the China wheat crop. “I still think there’s trouble on this one.”

Shandong, the second-biggest wheat grower, has received as much as 20 percent less rain this year compared with the average in past years, Cngrain.com said in a report yesterday. Some crops in the province’s southern regions have wilted or died because of a lack of water, it said. The website is a unit of the China Grain Reserves Corp., which manages state stockpiles.

In Jiangxi province, 253 millimeters (10 inches) of rain have fallen in the past four months, 53 percent less than the previous year, the Xinhua News Agency reported May 4. Rivers in Jiangxi are at their lowest levels on record because of drought, Xinhua reported April 28.

Rain Forecast

Still, China’s northern wheat-growing regions are forecast to receive rain in the next few days, which may help ease dryness affecting winter wheat, said researcher Xn121.com, which is a division of the China Meteorological Administration. Another round of rain may bring wetness to northern provinces beginning May 9, according to the website.

While there may be “bits of rain” that may fall in the wheat-growing regions, it won’t be enough to end the drought, Dale said. “We’re seeing another two weeks of dry weather with no real sign of a breakdown” in the pattern, he said.

The dry conditions persisting in Western Europe may spread across Russia, Dale said. Spring plantings of grains and other crops across Russia fell by about half this year, Prime Minister Vladimir Putin said in Moscow April 28.

Spring sowing covered 2.5 million hectares (6.2 million acres) as of April 25, Putin said. That compares with 5.1 million hectares in the year-earlier period, according to Agriculture Ministry data. The sowing is behind schedule because of a cold spring, Putin said, although he still expects a normal-sized crop to be planted.

British Weather Services is a London-based meteorological company that provides weather-related risk analysis to agriculture production, sports events and businesses.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

To contact the editor responsible for this story: James Poole at o jpoole4@bloomberg.net

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