China’s drought in southwest: A harbinger of inflation worries
Southwest China’s drought has brought about an increase in prices of agricultural products like rice and even metal prices like zinc due to lack of water for ore processing.
Electricity prices may also be raised if other sources can’t make up for shortfall in hydropower.
The question raised is will it spread to other parts of China. If so, China’s government may be forced to act.
They better pray that the drought is not followed by endless torrential rain which could affect agricultural and metal production.
Entry filed under: Watch your step.