China's extreme weather takes bite out of produce as prices soar

By Bernard Orr

BEIJING (Reuters) - Produce prices in China have risen sharply over the past two months, affected by extreme weather from deadly floods to scorching heat that has devastated millions of acres of farmland and is now hitting consumers in their pockets.

According to data from the Ministry of Agriculture and Rural Affairs, an index of wholesale prices of agricultural products consistently rose every day from June 25 to Aug. 21 except for a slight dip on July 19.

Soaring food prices this summer present an additional headache for the world's second-largest economy, which is already wrestling with thorny problems from sluggish factory output and joblessness to deflationary pressures and uncertain external demand for Chinese goods.

Notably, the average wholesale price for 28 vegetables tracked by the ministry from June 17 to Aug. 15 jumped from 4.29 yuan (60 cents) to 6 yuan per kilogram, a 39.9 percent increase over the period, Chinese state media said.

"I don't know what's going on this year, but vegetarian food is very expensive and ordinary people can hardly afford it," complained a user on Toutiao, a Chinese news and information content platform.

At Beijing's Xinfadi Market - China's largest wholesale market for agricultural products - the weighted average price of vegetables in August was 4 yuan/kg, up 25% compared with the same period last year, China Central Television (CCTV) reported.

Prices for cabbage, cauliflower, and broccoli rose, said other state media, and the government also noted higher prices for cucumbers, spinach, pears, eggplant and zucchini as well as pears and watermelons, in its data.

"Who dares to go to the market now? I can't afford to buy vegetables. So I just don't buy or eat," said another netizen.

China suffered through torrid rainfall that started in the spring and continued through July, along with weeks of record-breaking heat.

In central Henan, one of the country's main commercial crop production areas, more than 1.13 million hectares were affected with some harvests lost from soaked fields.

Extreme weather led to a near doubling in economic losses from natural disasters in July from a year earlier.

China recently was also forced to provide an additional 100 billion yuan ($14 billion) to banks to support rebuilding areas devastated by floods, which damaged around 6 million acres of crops.

But consumers will find some respite as experts expect vegetable prices to come down in the middle to late September as supply increases due to the current higher prices on offer.

(Reporting by Bernard Orr and Shanghai newsroom; Editing by Michael Perry)