Tensions in grain markets due to flooding in western China

The international grain markets reacted tensely last week to the large global weather differences and the possible consequences for grain harvests. This again led to higher quotations for wheat and maize, among others. Chinese officials make reassuring statements about the flooding in Henan food province.

The grain crop in the northwestern United States is already experiencing the largest and most severe drought in recent decades. Forest fires are also raging in many places, destroying parts of the crop. Harvests are also under pressure in maize producer Brazil, and agricultural areas in China are being destroyed by flooding.

China's Zhengzhou Commodity Exchange, which mainly trades commodity futures, said on Wednesday that its operations are unaffected and functioning normally. At most there would be some delays due to transport problems.

Analysts predict that China's floods could affect food prices, as Henan accounts for about 30% of the country's wheat crop and is the third most populous province, with a population of nearly 100 million.

According to a report by Nomura Holdings Inc. grain prices could rise in the coming weeks due to supply shortages and transport disruptions, noting that that impact would only be temporary.

After the heavy floods in the Chinese metropolis of Zhengzhou, the number of deaths has risen to 51. There is damage of 8.5 billion euros, reports Chinese state television. Moreover, the end is not yet in sight.

Typhoon In-Fa, which is currently approaching the east coast of China and also affecting the weather deeper inland, is responsible for the torrential rains. In-Fa is already the sixth typhoon to hit China this year and is expected to make landfall on Sunday in the coast of Zhejiang and Fujian provinces.

Zhengzhou, a city of more than 9 million inhabitants in central China's Henan province, has been hit by the heaviest rainfall in decades since Tuesday. The metro network, among other things, partially filled up as a result, as a result of which hundreds of people were trapped in flooded metro trains. Many streets are also under water.