China's wheat growers face 'disaster' after heavy rain batters crop

After two weeks of continuous heavy rains, a farmer surnamed Chen in China's Henan province surveys bent stalks of saturated wheat in sodden fields that will take days to dry out before harvesting can start.

The rains are also causing the kernels on his wheat crop to begin sprouting early, which, more crucially, means the grain will produce lower quality flour unsuitable for noodles or bread. That could mean a large chunk of the crop will end up being sold as less valuable animal feed, or even abandoned.

"Look, all this wheat has sprouted," Chen told Reuters, pouring kernels into his hand while standing in his fields about 40km north of the town of Zhumadian. Chen plants about 2 acres of wheat every year.

About one-third of China's wheat is grown in Henan province, earning it the nickname the granary of China. With roughly 30 million metric tons expected to be affected nationally by the rains, out of a forecast bumper crop for all of China of 137 million metric tons, the losses may mean rising grain imports into the world's biggest wheat consumer.

About a third of the wheat across southern Henan has sprouted, said a harvester driver operating on a nearby farm who has worked his way north from Anhui province over the last week. He declined to give his name.

The rains have also impacted neighbouring provinces like Anhui, Shanxi and Shandong, though it's too early to say how extensive the damage is, but it could increase the need for more overseas grain.

"Imports of wheat into China are already going up. If there is damage to the crop... then it's likely that China will need to increase its imports next year. So obviously that would have an impact on global prices and an impact on global markets," said Darin Friedrichs, co-founder of Shanghai-based Sitonia Consulting.

However, China's large grain stocks should protect against any impact on food prices, he said.

Any higher imports would also come just as the El Nino weather pattern is set to sharply reduce output in major wheat producer Australia and as the ongoing war in Ukraine continues to curtail its grain exports.

A disaster

For farmers like Chen, incomes will take a hit.

China's Agriculture Minister Tang Renjian visited Zhumadian and other impacted areas this week and urged "extraordinary measures" to harvest the wheat, according to a ministry statement on Monday.

The Henan government is urging insurance providers to cover early sprouting damage and quickly settle claims, the ministry said.

It has also ordered state grain buyers to purchase lower quality wheat at above-market prices.

A Xiping-based grain dealer surnamed Wang is paying growers US$295 (about RM1,358) per metric ton of germinated wheat, about 75% of the market price for food-grade wheat. JCI-WHT-ZHZH

The wheat kernels she has bought have all more or less sprouted, Wang said. "These (sprouted) wheat have a bad taste as they are sticky and doesn't mix well to make dough."

But for damp wheat still unharvested, the price could be even lower, unless it dries up soon.

Only three-quarters of Henan's crop had been harvested as of Tuesday, compared with 90% this time last year, according to state media.

Farmers are digging trenches or using pumps to drain water off their fields so harvesting can start.

"I think that we will have to wait four or five days before harvesting," said Chen.

"This is really a disaster."