As the world’s largest importer of American agricultural products, China stands to get walloped by the drought that is ravaging U.S. croplands.
With the worst dry spell in 50 years threatening to kill corn and soybean crops across a wide swath of the Midwest, driving food prices to record highs, Chinese officials are bracing for a shock that could complicate plans to revive the economy this year.
In 2011, China imported $20 billion worth of soybeans, corn, cotton and hides from US farmers, surpassing Canada for the first time.
China is particularly dependent on soybeans, which have become a crucial feed crop for the country’s massive pig farms. As more Chinese can afford to eat meat more regularly, pork consumption has skyrocketed. More than half of the world’s pork is now produced and consumed within China. Corn imports are also important, with China purchasing more from the US than any country but Japan. Next year, it is expected to buy 5 million tons of American corn.
But analysts don’t expect the prices to come down anytime soon. A bullish run on soybean futures drove up the cost to $16.92 per bushel for November delivery, beating the previous all-time high of $16.37 set during the global food crisis of 2008.
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