VZCZCXRO7113
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0331 0410947
ZNR UUUUU ZZH
O 100947Z FEB 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2198
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUCPDOC/USDOC WASHDC IMMEDIATE
RUEHRC/DEPT OF AGRICULTURE WASHDC IMMEDIATE
RUEHOO/CHINA POSTS COLLECTIVE
RUEHRC/USDA FAS WASHDC

UNCLAS BEIJING 000331 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USDA/ERS 
STATE PASS USDA/FAS/OSTA CHINA DESK 
STATE PASS USTR FOR STRATFORD 
TREASURY FOR OASIA 
 
E.O. 12958:  N/A 
TAGS: ECON SENV EAGR CH
SUBJECT: CHINA DROUGHT: NOT A CRISIS YET 
 
(U) This cable is Sensitive But Unclassified. 
Please protect accordingly. 
 
¶1. (SBU) Summary and Comment: China declared a 
drought emergency on February 5 in seven major 
agricultural provinces in central China.  Although 
the drought is serious, it should have limited 
impact on overall Chinese agricultural production 
and food supply.  A short-term drought of this 
nature is not unprecedented and could end quickly 
with a couple of good rain showers.  Light rainfall 
over the weekend in a number of areas has already 
reduced the official estimates of affected land. 
End Summary and Comment. 
 
¶2. (SBU) Following the February 5 announcement of a 
drought emergency in Henan, Anhui, Shandong, Hebei, 
Shanxi, Shaanxi, and Gansu, official Chinese media 
has focused on the drought's impact on the winter 
wheat crop, the primary winter crop in the affected 
area.  Foreign Agricultural Service (FAS) analysis 
suggests that the drought will have little impact on 
China's total wheat production.  At this stage, FAS 
estimates losses of between 2.5 to 3.5 percent of 
total production.  The winter wheat crop is still in 
its dormancy stage and less impacted by dry soil 
conditions.  When the wheat begins to emerge in the 
end of March or early April, agronomists will have a 
better understanding of the actual impact. 
Nonetheless, futures markets in China have already 
reacted to press statements by sending prices higher 
on wheat.  Misguided media reports are playing a 
role by suggesting that last year's catastrophic 
winter freeze and Sichuan earthquake depleted wheat 
reserves.  In truth, China has very high stocks, 
estimated to be about half of the annual production. 
 
¶3. (SBU) Premier Wen Jiabao has made inspection 
tours to drought-affected areas and official media 
reports that provincial authorities have already 
seeded clouds and are taking other drought-relief 
measures.  The Central Government is reportedly 
allocating drought relief funds, although it is 
unclear how much is additional to recently-announced 
funding increases for agriculture and rural 
development. 
 
¶4. (SBU) On February 10 Tsinghua University 
hydrologist Yang Dawen told Emboffs he agrees with 
the government's assessment that the drought is 
serious.  But Yang also said the drought's impact is 
limited to agriculture because water for industrial 
use and human consumption comes mostly from 
reservoirs and groundwater.  Government measures to 
improve irrigation and dig wells, according to Yang, 
will have very limited immediate impact.  Yang also 
said one or two good rain showers would make the 
situation much better. 
 
¶5. (SBU) Post will continue monitoring the drought 
and report on its impact on agriculture and the 
overall economy. 
 
PICCUTA