China has said it will spend nearly $1 billion to battle a drought plaguing huge areas of its north, as wheat prices continued their climb and the UN warned of serious consequences for the winter harvest.

The drought is the worst in six decades in many areas, and has left a swathe of grain-producing regions reeling from a lack of any significant rainfall in more than three months.

The government will spend at least $911 million to divert water to affected areas, construct emergency wells and irrigation facilities, and take other measures, China’s drought relief headquarters said.

Concerns about the impact of the drought sent wheat prices on the Zhengzhou commodity exchange in central China soaring nearly across the board on Wednesday, the exchange said.

Prices of a key contract had hit a “historic high” of 2,865 yuan per tonne on Tuesday, the Chinese finance website Hexun reported, without specifying which contract.

The drought-induced price spike could not have come at a worse time for the government, which is struggling to cap soaring prices of food and other key goods.

On Tuesday, the central bank announced the third interest rate hike in four months, one of a series of macro-economic levers it has pulled to tame inflation which has a history of sparking unrest in China.