Drought impacts crops while heat could affect crushing operations

China’s Ministry of Agriculture, in coordination with the Ministry of Finance, announced 300m ($44m USD) in disaster relief funds for drought affected regions. The funds are intended for the purchase of seeds, fertilizers, and pesticides.  

According to the Central Meteorological Observatory, 1.07 million square kilometers have been affected by the recent extreme heat wave and 155 tracking stations have reached or exceeded their historical record temperatures. The center noted that some areas of the Sichuan basin and lower Yangtze had “localized extreme droughts”. 

More provinces continue to initiate emergency drought responses. Guizhou and Jiangxi initiated emergency drought responses yesterday.  

In Sichuan, industrial power users were told to curb electricity consumption for at least 6 days and in Jiangsu some factories are curbing power demand and are expecting outages.  

Chengkou county in Chongqing announced their water reservoir only had enough water to support 10 days of normal demand and the county was initiated their backup water supply.  

In addition to the damage to crops, power shortages could affect soybean crushing. Last year saw power shortages in some regions which caused crushers to halt operations. The unexpected power cuts in the middle of operations led to significant losses as crushers had clean and empty machines that were unexpectedly stopped.