Friday, December 21, 2007

Droughts and inflation

From China Financial markets:

A few weeks ago I saw a report that China had suffered its worst drought in recent times. The dates and details were a little vague, so I tabled the article and decided at some point I wanted to find out a little more about it. Today both Bloomberg and the South China Morning Post have articles about the drought.

Bloomberg stares its piece by saying: “China's most severe drought in a decade is expanding throughout the country, threatening the normally humid areas along the southern coast.” I searched for more news on China Daily and found a whole slew of articles. Parts of China are suffering their worst drought since the early 1950s, about 400,000 hectares of crops have already been damaged this year, and the State Flood Control and Drought Relief Headquarters reports that 37.4 million tons of grain will be lost. China Daily adds: “In recent times, drought has been striking more areas of the country with greater frequency. It had extended from the north and western regions to the south and eastern areas, worsening water supply conditions for both agriculture and industry.”>>>MORE

HT: Naked Capitalism