Chinese floods send food prices soaring

Tuesday 28th Jun 2011 by theWeather club

While the Chinese Premier Wen Jiabao has been signing billion dollar trade deals in Downing Street, the people back home have been dealing with a disaster which will lean heavily on this imminent British trade revenue. According to the official Xinhua News Agency torrential rains have left huge areas of Hubei and Zhejiang provinces under water, with more than one million acres of farmland affected. Almost 1,000 businesses have been forced to close with over 5.5 million people having their lives disrupted. The downpour also triggered mudslides burying buildings and over 7,000 homes in the region are known to have collapsed or been seriously damage. At present the financial costs are estimated at almost six billion Yuan (£572,566), but this figure is sure to rise as more details emerge about the damage to homes and businesses. So far this month, flooding in eastern and southern China has left more than 170 people dead or missing, while many roads and railways have been rendered unusable hampering relief efforts.

And it seems that the economic costs are set to be as severe as the structural ones. Farmers have told the news agency that the flooding is the worst they had seen in 20 years, and has led to vegetable output being reduced by 20% as well as well as causing fruit and grain shortages. This has caused price increases of up to 40%, for green vegetables, adding to an inflation rate of 5.5% which is a three-year high. The increase in the Chinese consumer price index reported last week was higher than April's 5.3% and March's 5.4%, and the National Statistics Bureau said the main reason for the rise was an 11.7% jump in food prices.

China had mobilised troops across the region to rescue stricken farmers and distribute food, but there has been criticism of the response with some villagers saying local government could have done more to prevent the flooding. “When it first started, the breach (in the flood protection dyke) was not that huge - we could have easily fixed it,” villager Shou Qiongdan told reporters. “But the government did not do anything. None of the local officials tried to salvage the situation. That's why we have such huge economic losses and so many people being affected by the flooding.”