CEO Morning Brief

China’s US$4 Bil Lychee Harvest Devastated by Extreme Weather

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Publish date: Wed, 15 May 2024, 10:43 AM
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TheEdge CEO Morning Brief

(May 14): Extreme weather is devastating China’s crop of lychees, the jelly-like tropical fruit that’s worth US$4 billion (RM18.89 billion) a year to the country’s farmers.

The nation is both the world’s largest producer and consumer of the fruit and a significant exporter. About half of China’s lychees are grown in the southern province of Guangdong, where the harvest has fallen foul of an unusually warm winter followed by heavy spring rains. As a consequence, prices have jumped.

China produced 3.1 million tonnes last year, but this year’s harvest could be barely half that at 1.65 million to 1.75 million tonnes, said Chen Houbin, a professor at South China Agricultural University who has studied the fruit for nearly three decades.

“People long for lychee season every year, and I have friends who eat more than 100 jin (50kg) a year,” said Chen. “They won’t be able to consume that much this year given the higher cost.”

Record rainfall

Guangdong saw a record amount of rain in April, with precipitation nearly three times the norm, according to the province’s weather bureau. But the lychee harvest is, of course, just a niche example of the wider havoc being wreaked on Chinese farming by climate change.

With the deluge set to continue in southern regions this week, the China Meteorological Centre warned on Monday (May 13) that low-lying fields are threatened by flooding that could disrupt the harvest of rapeseed, which is crushed for cooking oil, and the growth of the early rice crop.

And it’s not just farmland that’s affected. Prolonged heavy rains could slow the unloading of soybean imports and deliveries of soymeal for animal feed, as well as disrupt the movement of livestock and help spread disease, said Kang Wei Cheang, assistant vice president at StoneX Financial Pte Ltd.

China’s lychee lovers, meanwhile, have taken to social media to complain about the surge in the price of their favourite treat, prompting the authorities in Guangdong to release over 200 tonnes of fruit frozen from last year. At one point last week, lychees were the hottest topic on Weibo, the Twitter-like platform in China.

Fruit store

At a fruit shop in Beijing’s city centre on Tuesday, lychees were fetching 45 yuan (RM29.35) a kilogramme, having jumped to as high as 80 yuan two weeks ago when the storms in Guangdong were at their worst. The fruit is usually less than 40 yuan per kilo at this time of the year, said store manager Shen Xianghe.

It won’t just be Chinese suffering from lychee withdrawal. The country exported over 10,000 tonnes of the fruit in 2022, including to the US and Europe, with more than half of that from Guangdong. And then there are the farmers who bank on the crop every year.

Last month’s rain and hail storms blew a lot of unripe fruit off the trees, said Yin Yaocheng, who works at a lychee farm in the province. He expects profits to drop this year as China’s cash-strapped consumers won’t be able to afford significant price hikes. And he said he doesn’t know how to protect the crop from the extreme weather that’s striking with ever more regularity.

“Giant hailstones even punched holes in our warehouse’s roof,” he said. “How do you defend against that?”

Source: TheEdge - 15 May 2024

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