China: Extreme Weather and Rising Food Prices

Northern China has been suffering from severe drought since last October while the central and southern regions of the country are expecting prolonged icy weather this winter. Severe weather now and in the coming weeks could also affect transportation systems during the Lunar New Year holiday period in January and February. In addition to snarling travel during the busy holiday season, extreme variations in seasonal weather patterns will have an even greater impact on the country's grain and vegetable production, which will add to growing concerns about rising food prices and inflation in China.