News

July 14, 2008

Full Impact of Sichuan Earthquake Yet To Be Felt On Food Prices

By Sally White

Food is a global industry – everywhere supermarket shelves give evidence. Yet the ripple effects from the May earthquake damage in China’s Sichuan region, now estimated by the UN Food and Agriculture Organisation (FAO) at US$6 billion, are likely to surprise many. China exported US$26 billion-worth of agricultural products in 2006 – by 2010 that is forecast to go through US$40 billion. At a time when prices of so many agriculture products are soaring, the loss of production in a major growing region will spread international food inflation ever wider.

The size of China’s agriculture and horticulture industries is not often appreciated. China is the leading exporter of soybeans, vegetable oil, cotton, wool, rubber, and animal hides. It produces 30 per cent of the world’s rice, 20 per cent of the world’s corn, a fourth of the world’s cotton, an estimated 37 per cent of the world’s fruit and vegetables, and half of the world’s pork. Chinese farmers dominate world markets in a variety of products areas, including garlic, apples, apple juice,...