Lincang's sugar and tea industries are two pillars of its economy. Sixty percent of sugarcane crops were affected by the weather in 2010 and there was a conspicuous reduction of total production.

Ganhua Company is a major sugar factory in Yunxian county, and is experiencing a hard time with this year's harvest.

According to Wei Xuehua, general director of the company, the scarcity of water has handed the company, as well as sugarcane farmers and delivery drivers, a total loss of 19 million yuan ($3 million) so far.

In addition, rats have also severely affected the production of sugarcane in the region as water can only be found in the plants.

"We are cooperating with the government to build more channels now and it helps irrigation of those crops on the flat ground, but we still have to pin the future of those on the hills on God," Wei said.

As sugarcane normally would be reaped four times in four years, the planting cycle should be ensured every year. But the shattering of farmers' confidence this year has threatened the next year's harvest due to a decrease in planting.

Zhang Yuebin, director of the Sugarcane Research Institute of Yunnan Academy of Agricultural Sciences, said the reduction of sugarcane in Yunnan due to the drought would contribute to a price increase of national sugar.

"The price of sugar might be pushed up from 6,000 yuan per ton to 7,000 this year," he said, adding that this would be a reasonable price for farmers, companies and consumers.

But Zhang also said the influence of the reduction of Yunnan sugarcane would be limited as the Guangxi Zhuang autonomous region has 60 percent of the total sugarcane growing of China.

"Yunnan only contributes 20 percent to the national market and had a total production of 1.76 million tons of sugar last year and will see a minor increase this year to 2 million," he said. "But without the impact of water scarcity, we would have 2.3 million."

He added that national sugar prices in recent years have been enormously affected by natural disasters. Guangxi was stricken by freezing conditions a few years ago and Yunnan has experienced a persistent three-year drought.