China grain imports to surge as water dries up

By Tim Large, Reuters, 11 April 2002

TOKYO - China could begin large-scale grain imports within a year as dwindling water resources force it to eat into its big stockpiles, putting pressure on grain prices around the globe, a prominent agriculture economist said.

Drought and overpumping have created a huge grain deficit in China, where consumption now outstrips production by some 45 million tonnes a year, Lester Brown, chairman of environmental watchdog Worldwatch Institute, said in an interview.

They've dealt with that by drawing on their reserves but they can't do that for much longer, he said.

They might be able to do it for one more year, but at some point China's going to turn to the world market.

With a population of 1.3 billion, China is the world's biggest consumer of grain but it has kept imports to a bare minimum in recent years, buying just 500,000 tonnes of wheat in 2000/01, mainly from the United States.

China joined the World Trade Organisation in December and has promised to allow imports of various farm products, including up to 8.5 million tonnes of wheat and 5.9 million tonnes of corn.

Officials have said, however, that it would probably import only 1.5 million to 2.5 million tonnes of wheat this year.

China's total grain stocks were estimated at 362.4 million tonnes as of December - more than half of world inventories.

I have a feeling that we're not too far from a convergence of climate events and emerging water scarcity that could begin to show up in economic indicators like world grain prices, Washington-based Brown said.

I also have a feeling that China will be the country that will bring that into focus for the world, he said.

PUMPED DRY

More than two decades of overpumping and unbridled industrial development have dried up wells and springs, turned lakes to dust and polluted 80 percent of China's rivers and streams.

In the countryside, riots have broken out as farmers battle for water.

Brown said China was overtaxing its water supplies by 37 billion tonnes annually - a volume equivalent to 37 million tonnes of grain production.

In China, in the competition between residential, agricultural and industrial uses, agriculture will almost always lose because it's such a low-value use of water, he said.

Brown is author of Eco-Economy: Building an Economy for the Earth, in which he calls for a restructuring of the world economy to ensure sustainable development.

No stranger to China, he first rattled Beijing in 1994 by forecasting a global grain shortage as the country's population swelled.

China has always been keenly conscious of its vulnerabilities to food embargoes, and Brown's comments touched a raw nerve.

China's total wheat output in 2001 was about 94 million tonnes, down from 99.6 million in 2000 due to smaller planted area and poor weather, state analysts have said.

Beijing acknowledges that China faces a water crisis.

Officials have said that without prompt action, China's total water supply would outstrip resources by 31.8 billion cubic metres (1.12 trillion cubic feet) by 2010.

Water scarcity, which traditionally has been a local issue, is going to become a global issue, Brown said.

Water scarcity is going to cross national boundaries via the international grain trade.

Brown said that was already happening throughout the Middle East and North Africa as water shortages boosted grain imports.

Importing grain is the most efficient way of importing water, simply because one tonne of grain is worth 1,000 tonnes of water, he said.