China’s grain hoarding contributes to rising food costs


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“The food of the Chinese people must be made by and remain in the hands of the Chinese people.” —Chinese leader Xi Jinping

Global grain trade strategies are currently underway, driving up food prices, while many profit at the expense of others.

One of the reasons food prices are rising is China. China stores food. In fact, while Russia was blocking trade routes, China was importing exports from these trade routes. Rumor has it that 40% of Ukraine’s April grain exports went to China.

As Bloomberg recently reported: “By mid-2022, the US Department of Agriculture estimates that China will hold 69% of the world’s corn, 60% of its rice, and 51% of its wheat.

These are staggering numbers. This is a bold attempt by China to increase national food security and reduce food dependence on the United States and Australia, but it is also a global strategy and direct threat to every consumer. Because China is hoarding grain, food prices will only continue to rise.

The evidence is now overwhelming and the ripple effect can be felt around the world. I’ve attached a graph illustrating the rise in food prices since 1913. As you can see, prices have risen exponentially over the decades – the last thing we need is this stockpiling by China.

The hoarding has been going on for the past year, but at the time many denied it was happening. China’s neighbours, notably Japan, disagreed. As Nikkei Asia reported last year: “Less than 20% of the world’s population has managed to store more than half of the world’s corn and other grains, leading to a sharp rise in prices at across the planet and plunged more countries into famine”.

Additionally, as AgWeb reported in April this year: “China made another big purchase of US corn to start the week, and market analysts say food safety concerns are whetting appetite. increase in the country for raw materials. USDA [U.S. Department of Agriculture] confirmed on Monday a flash sale totaling 1.020 million metric tons of maize by China: 680,000 tons of the purchase is for the old crop, the remaining 340,000 for delivery in the 2022/2023 marketing year. The purchase followed China’s largest maize purchase since May 2021 last week, a purchase totaling 1.084 million tonnes. »

James O’Brien, head of the US State Department’s Office of Sanctions Coordination, also had a lot to say about China, saying publicly, “China has been a very active buyer of grain, and they’re stockpiling grain… at a time when hundreds of millions of people are entering the catastrophic phase of food insecurity… It would have been much better to see this grain go to Egypt, the Horn of Africa and elsewhere.

O’Brien is right. Here in the rich world we complain about prices, but the world’s poor run the risk of starvation.

What about supply chains? Although there are still supply chain issues domestically and internationally, much of the devastation between 2020 and 2021 has been resolved. Right now, we are largely facing runaway inflation on everyday commodities like crackers and rail freight. It seems there is no end in sight.

A recent report by Dan Kowalski, Vice President of Knowledge Exchange at CoBank, shared valuable supply chain insights: “Warehouse and inventory costs continue to rise to levels approaching their peak, and transportation costs are rising at a much higher rate than before the pandemic… Grain railcar availability and prices hit multi-year lows and highs, respectively, in the second quarter. of consumer goods continue to dwindle, supply chains will slowly recover.”

Meanwhile in China, food prices are under similar pressure. Yahoo reported that Chinese Communist Party (CCP) planning authorities are ready to quell price issues, saying, “The National Development and Reform Commission, a central planning authority, will use tools such as the adjustment of reserves,” he told pork and slaughterhouse representatives at a meeting, according to a statement released on Monday. The NDRC also said it would work in coordination with other agencies to “severely punish illegal activities, including the fabrication and dissemination of price-gouging and price-gouging information.”

However, it was a different story in the China Daily, where it was reported that there was no problem, stating that “China’s grain imports are mainly to make up for the shortfall in domestic demand and not to hoard it. In fact, China’s grain imports in the first half of this year were down 5.4% year-on-year. China has also exported food and provided food aid to other food-deficit countries, contributing to global food security.

True, the China Daily is controlled by the CCP’s publicity department, and possesses by the CCP.

I know food prices will go down and back to normal, but when can anyone guess. The price of rice in the United States alone rose 40% year-over-year in the first quarter of 2022. But the fact that one of the world’s superpowers is hoarding essential foods and foodstuffs will not help certainly not to lower food prices.

So one can only wonder if the CCP is trying to corner the market of several essential products as part of a strategic defensive move to cripple consumers. The profits alone will fill the coffers of the Communists.

The opinions expressed in this article are the opinions of the author and do not necessarily reflect the opinions of The Epoch Times.

Chadwick Hagan

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Chadwick Hagan is a financier, entrepreneur, author and columnist. He has managed businesses and investments in global markets for two decades. As an author and writer, he covers economics, fine arts and conservation. He is a Fellow of the Royal Society of Arts and is based in Atlanta and London.

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