According to data from the US Department of Agriculture, China is expected to have 69% of the world’s maize reserved by the first half of the crop year 2022. The country is also projected to have 60% of the world’s rice reserves and 51% of its wheat. Less than 20% of the world’s population has managed to stockpile more than half of the world’s reserve, leading to consequences such as steep price increases across the planet and famine. China’s COFCO Group, a state-owned food processor, operates one of China’s largest food stockpiling bases at the port of Dalian. The facility stores beans and grains gathered in China and abroad in a staggering 310 silos.
The US Department of Agriculture data shows that China continues to hoard grain despite food shortages across the world. The figures represent increases of roughly 20 percentage points in the past ten years alone, while China spent over $98 billion importing food and beverages in 2020. Between January and September of 2021, China imported more food than it had since at least 2016. China’s soybean, maize, and wheat imports have skyrocketed two- to twelvefold over the past five years on aggressive purchases from supplier nations such as the US and Brazil. While China stockpiles the world’s grain reserves, the number of people living in famine-struck regions topped 700 million in 2020, according to the UN.
Read More: China hoards over half the world’s grain, pushing up global prices
So What: A key point for risk management professionals is to maintain a broad awareness of strategic issues, don’t just focus on the topics making headlines. Grain stockpiles are not top of fold issues in the media, but as this analysis indicates is clearly an issue of concern. It relates to food security globally and can impact just about every other category of risk. Why is this important to the CCP? Clearly they fear a hungry population.
What’s Next: Expect continued stockpiling by China, and expect an even more aggressive stance on global fishing by China.
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