It estimates that 12 million acres of winter crops have been lost or damaged as a result of inadequate rainfall and higher temperatures, and the areas planted in spring crops have been reduced substantially. The worst-affected provinces are Yunnan, Gansu, Ningxia, Inner Mongolia, and Hebei.
Cheng Fang, economist at the FAO, told AP-Foodtechnology.com that the drought would have little impact on national wheat supply.
"The provincial wheat harvesting area is less than 1 million hectares for Inner Mongolia, Yunnan, Gansu, and Ningxia. The national wheat area is about 23 million hectares in 2006," he said.
"As a result, we are not expecting that the ongoing drought will have a big impact on national market prices but it may have a big impact on local grain markets."
The FAO does not have the market price information in these affected local markets yet but warned that the drought will have a serious impact on vulnerable groups, particularly in affected mountain areas, where there are few alternative sources of income.
The drought in Ningxia started in 2004, and some districts have not received significant rainfall for more than 600 days. In the worst-hit districts, over 60 per cent of winter wheat crops were reported as totally lost, with a 40-50 per cent reduction in output in the remaining areas.
The FAO says that out of 2 million acres of planned spring crops, only around 30 per cent were planted.
In Hebei, almost 5 million acres of agricultural land have been severely affected by two consecutive drought seasons, and the level of groundwater has fallen by 2 feet.
The affected areas are among China's poorest regions, with 2004 per capita annual incomes of rural households of $227 in Yunnan, $226 in Gansu, and $283 in Ningxia. Over half of rural households live under the poverty line and have limited access to food.