Drought is threatening China’s grains output, which may force it to re-enter the global market after staying away from major purchases in recent months due to oversupply and sluggish consumption.

Wheat and corn production in the new season is forecast to fall, as drought in parts of northern China — a key grains hub — has reduced crop yields and delayed planting, according to BOABC, a Beijing-based agriculture consultancy. 

Any significant drop in grain production in China, the world’s top consumer, could push the country to scoop up purchases from the global market, reversing a recent trend where the nation has been almost dormant with corn and wheat buying. 

While the government still expects a bumper harvest of wheat and is predicting higher corn output in the new year, recent drought conditions have stoked concerns. The country’s agriculture ministry in recent days sent delegations to top grains producers, including in Henan and Shandong provinces, to deal with drought. 

Wheat output in China in the marketing year through June 2025 is forecast to fall 1.24% to 134 million tons, as dry weather and high temperatures hurt yields of the staple grain in some areas of northern China, BOABC said this week. 

Drought also delayed planting of corn in parts of the region, and is expected to continue to bake crops, contributing to the fall of production of the yellow grain in the marketing year through October 2025 by 2.26% to 282 million tons, it said. 

Less rainfall since May and lasting high temperatures have caused drought in parts of HuangHuaiHai, a major grains production area in northern China, and affected planting of summer grains, the agriculture ministry said late Thursday. 

It warned drought conditions might worsen as high temperatures would continue in the next 10 days across Shandong, Henan, and Hebei, which are major producers of both wheat and corn.

China scoured the global market for wheat last season, after heavy rains damaged crops in top producer Henan, and made a significant amount of the harvest only suitable for feed use. China-based independent consultancies flagged the damage before government data was released that showed a fall in wheat output. 

©2024 Bloomberg L.P.