PRC’s food hoarding could worsen hunger in developing nations, analysts say
The People’s Republic of China (PRC) is stockpiling grain and other essential foodstuffs in amounts far exceeding the needs of its population, according to trade estimates. An obsession with food security fueled by historical shortages, concerns over current events and a controlling government are to blame for the hoarding, which analysts say could worsen global inflation and cause food shortages, particularly in developing countries.
The PRC, which accounts for about 18% of the world’s population, will retain 69% of global corn reserves, 60% of rice reserves and 51% percent of wheat reserves by mid-2022, the United States Department of Agriculture estimates. Much of these holdings are being obtained through imports and the PRC’s reluctance to release its own grain production to world markets, according to the U.S.-based publication Farm Journal.
“China’s pursuit of food security could affect world prices for key commodities including grain and soybeans. This could add to problems of inflation and exacerbate hunger issues in some developing countries,” Dr. Timothy Heath, a senior international defense researcher at the Rand Corp., told FORUM.
The PRC bought more than 2 million metric tons of corn from U.S. suppliers in April 2022, which soon was followed by world corn prices soaring to their highest levels since 2012. Chinese grain buyers are “in hoarding mode,” according to Brian Grete, a senior market analyst with the Professional Farmers of America, Farm Journal reported.
A growing dependence on food imports in recent years has heightened Beijing’s sensitivity to factors that could affect global supplies, Heath explained. “The efforts to stockpile food owes to a combination of factors, including increased public anxiety over the security of the food supply,” he said. “Concerns center on the disruptions from the COVID-19 pandemic, the effects of the Russia-Ukraine war and the effects of poor weather on key crops.”
The stockpiling bears similarities to the stringent pandemic restrictions imposed by authorities on residents in Chinese cities, Heath said.
“In both cases, Chinese leaders have emphasized the importance of self-reliance and China’s right to respond to its security needs in its own way,” he said.
With much of the world condemning Russia’s unprovoked attack on Ukraine, Beijing may fear being hit with international sanctions should it ratchet up its aggressive behavior against self-governed Taiwan, which the PRC claims as its territory, The Economist newspaper reported. Those concerns may heighten Beijing’s proclivity to stockpile foodstuffs.
The PRC has refused to condemn Russia or impose sanctions on Moscow despite evidence of ongoing atrocities by Russian forces in Ukraine since the invasion began in February 2022.
Grete expects the PRC to increase its purchasing of a range of food commodities, Farm Journal reported. Beijing also won’t sell its own supplies, particularly of wheat, which accounts for about half of global reserves, he said. “They’ll keep those for themselves.” (Pictured: A combine harvester works in a wheat field in northeast China.)
Poor weather, meanwhile, has lowered grain harvests worldwide, exacerbating inflationary pressures spurred by PRC stockpiling, Farm Journal reported.
“The best way to address Chinese anxieties over food security is to resolve some of the disruptions to the food supply, such as finding a way to end the Russia-Ukraine war and reestablishing the stability of the supply system following the COVID-19 pandemic,” Heath said.
Felix Kim is a FORUM contributor reporting from Seoul, South Korea.
IMAGE CREDIT: REUTERS