China's poor water resources are tipped to increase food imports over the next decade – and economists are starting to work the relevant numbers.ANZ economists Li-Gang Liu and Louis Lam this week predicted that, while China's food supply and demand
China’s poor water resources are tipped to increase food imports over the next decade – and economists are starting to work the relevant numbers.
ANZ economists Li-Gang Liu and Louis Lam this week predicted that, while China’s food supply and demand are mostly balanced at present, the country is likely to face annual food shortage of about 111 million tonnes over the next 15 years.
Driving the shortfall is China’s low natural freshwater endowment – at 2156 cubic metres per year per capita, less than one-third of the global average.
This national average is above the commonly defined “water scarce” threshold but is extremely unevenly distributed, with northern China – which holds over half the country’s arable land – facing serious water shortages.
Messrs Liu and Lam are sceptical that China’s major north-south water diversion project will alleviate water shortages for agricultural producers.
“The huge investment required suggests that the costs of this water will be high; making it too expensive for farmland irrigation once the project is completed,” their report states.
Based on previous trends and project growth, China is expected to gradually become a major net importer of agricultural products over the next 15 years.
Future food shortages are likely to be concentrated in high grade agricultural products, dairy, meat and other high protein products, all of which require a relatively high water input to produce.
The positive implications for New Zealand exports are obvious – as pointed out this week by Sunny Verghese, chief executive of global agribusiness giant Olam International, and last month by Craigs Investment Partners’ Mark Lister.
That is, assuming New Zealand’s own freshwater endowment – a whopping 90,400 cubic metres per year per capita – continues to flow.
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