If there's no precipitation before the end of Februray, wheat output and quality will drop and prices will climb, Zhang told Xinhua.

Li Guoning, general manager of Ningjin Zhongcheng Grain and Oil Trading Co. also in Hebei, shared Zhang's concerns.

"The drought can become a speculation factor if it lingers into March," said Li. "The wheat futures market has already showed some signs of speculative buying."

Wheat futures for September delivery at the Zhengzhou Commodity Exchange has risen 2.3 percent this month.

Higher irrigation costs could also spur price hikes, Li said, adding that the drought this year is even worse than two years ago.

Despite the fears, many, however, say it's too early to predict a decline in wheat output and a rise in prices.

Jiao Shanwei, an analyst at China Grain, said wheat usually stops growing in the winter months and therefore needs little water.

"There won't be a big impact on the output if the wheat fields can be irrigated timely in spring," said Jiao. "But if the drought does not ease after Lunar New Year, wheat future prices will continue to surge," he added.