The floods in central China threaten the supply chains for many products

The floods in central China threaten the supply chains for many products and could drive up their prices. The flooding of parts of the important economic and transportation hub in Henan Province could delay the movement of goods such as cars, electronics, peanuts and coal. The power supply was partially restored, while some trains and flights also ran. But analysts anticipate disruption for days that will drive prices up and slow business in densely populated Henan and neighboring provinces. Zhengzhou, Henan's capital with a population of twelve million, was hit particularly hard by the flood of the century. From Saturday to Tuesday there was almost as much rain as in an entire normal year. The metropolis is the hub of China's main north-south and east-west high-speed rail lines with connections to most major cities. The authorities admitted that the transport of coal, which is still used to generate the majority of electricity in the People's Republic, from top mining regions such as Inner Mongolia via Zhengzhou to central and eastern China is "severely affected". "With Zhengzhou being a leading national transportation hub and Henan Province being a major producer of grain, raw materials and some products such as iPhones, we believe that rainfall and flooding will have a significant impact on business activity and inflation in the short term," it said an analysis by the financial house Nomura. The Taiwanese company Foxconn, which manufactures iPhones for Apple in a plant in Zhengzhou, has not yet seen any direct effects on its production. "We are monitoring the situation closely," said the company. However, a person familiar with the matter told Reuters news agency that production at a small Foxconn plant, which mainly makes desktop connectors, has been hit by the flood. On a freeway that was overcrowded with stranded trucks, local residents distributed fried dough sticks to drivers, as footage from social media showed. "We're all stuck here day and night," said one driver over breakfast. China's largest automaker SAIC Motor warned of short-term consequences for the logistics in its Zhengzhou plant, while the Japanese automaker Nissan had even completely stopped production in its factory. Food prices in Henan, home to nearly 100 million people, and neighboring provinces could rise in the coming weeks, Nomura analysts expect. Because the floods could also have a longer-term impact on agricultural production. The rainwater can also spread diseases in the agar farms. Heavy rain in the south had resurrected African swine fever in 2020, which is deadly to pigs. With flooding affecting more than 200,000 hectares of farmland in Henan, analysts at finance house SDIC Essence Futures warned of the impact on the peanut harvest. Henan produces about a quarter of China's peanuts, an important source of edible oil.