China's extreme weather is affecting fruit and vegetable production and causing prices to skyrocket

BEIJING (Reuters) – Prices of agricultural products in China have risen sharply over the past two months, triggered by extreme weather conditions ranging from deadly floods to scorching heat that devastated millions of hectares of farmland and is now hitting consumers deep in their pockets.

According to the Ministry of Agriculture and Rural Affairs, the index of wholesale prices for agricultural products increased daily from June 25 to August 21, except for a slight decline on July 19.

Soaring food prices this summer are adding to the woes of the world's second-largest economy, which is already grappling with thorny issues ranging from sluggish factory production and unemployment to deflationary pressures and uncertain foreign demand for Chinese goods.

In particular, the average wholesale price of 28 vegetables monitored by the ministry rose from 4.29 yuan (60 cents) to 6 yuan per kilogram from June 17 to August 15, up 39.9 percent over the period, Chinese state media reported.

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

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

Other state media reported that prices for cabbage, cauliflower and broccoli had risen. The government also noted higher prices for cucumbers, spinach, pears, eggplant and zucchini, as well as pears and watermelons.

“Who dares to go to the market these days? I can't afford to buy vegetables, so I just don't buy or eat any,” said another netizen.

China suffered heavy rains that began in the spring and continued into July, and was marked by weeks of record-breaking heat.

In central Henan, one of the country's main crop-producing areas, over 1.13 million hectares were affected and some crops were lost due to waterlogged fields.

Due to extreme weather conditions, economic losses from natural disasters in July were almost twice as high as in the previous year.

China was also recently forced to provide banks with an additional 100 billion yuan ($14 billion) to help rebuild areas devastated by floods that destroyed about 6 million hectares of farmland.

However, there will be some respite for consumers as experts expect vegetable prices to fall in mid to late September as supplies increase due to current higher prices.

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

By Bernard Orr