Chinese Whispers - The Plot Thickens

From an official Chinese News Agency release:

According to the State Flood Control and Drought Relief Headquarters, extremely low rainfall since late October has created an extremely unusual drought in north China, traditionally the country's breadbasket.

As of Monday, about 136 million mu (9.1 million hectares) of winter wheat in eight major producing provinces was affected, of which 36 percent, or 49 million mu, was seriously affected. In addition, 3.5 million people and 1.66 million livestock had no access to drinking water.

Henan, which produces a quarter of China's wheat, is worst hit. Since October, it has seen about 10 mm of rain, 80 percent less than average, making it the worst drought since 1951. The provincial government says about 43.5 million mu of wheat is affected, 8.7 million seriously. In neighbouring Anhui Province, drought has hit 25.9 million mu of wheat crops.

Agriculture Minister Sun Zhengcai said Friday in Anhui that more than 2.3 million mu of seedlings in Anhui, Henan and Shandong had already died. He warned the dry spell was forecast to continue and cause more losses.

The Agriculture Ministry has no estimates of wheat yield losses this year, but a senior weather official said on Feb. 3 that production was likely to be down 2 to 2.5 percent from last year, when China produced around 110 million tons of winter wheat.

Xiao Ziniu, director of the National Climate Center of the China Meteorological Administration, has warned the "once-in-a-half-century" drought will continue until next month.

The Anhui provincial government says the drought has caused losses of 1.6 billion yuan (234 million U.S. dollars). Henan has published no estimated losses, but Party chief Xu Guangchun said the drought had affected people's livelihoods and could undermine social stability.

"The drought is adding difficulties to an already grim economic situation owing to the impact of the global financial crisis," he said.


It is interesting, is it not, that there are no official estimates as to how much production will be lost, yet they can tell us exactly how much the drought has cost in financial terms?

Why would they want to keep the true extent of any crop damage quiet? There is a clue methinks in "the drought had affected people's livelihoods and could undermine social stability."

And there's no point telling the world how bad things are now, that'll only make the price go up. We've got some buying to do first.

Make no official announcement on losses but get some "senior official" to say it's only going to be 2-2.5% or so.

The plot thickens.