Memories of 2008 food crisis push Asian countries to hoard grain

Towering grain mountains in Asia, already large enough to feed China for eight months, are set to grow even bigger as governments persist in shoring up their safety buffers against hard times.

Haunted by a 2008 food crisis that sparked unrest and panic buying, states will keep piling grain into reserves despite the strain on their finances and storage problems, buoying prices that have been hit by expectations of bumper harvests.

“The most populated countries, especially in Asia, will be very reluctant to see their inventories go down,” said Abdolreza Abbassian, senior economist at the United Nation’s Food and Agriculture Organisation in Rome.

“Lessons learnt during the ‘90s and 2007-08 have convinced policymakers that the international market is important, but it cannot be relied on 100 per cent for food security.”

With hoarding the name of the game, Asia’s top grain-buying states have accumulated a whopping 100 million tonnes of rice and 90 million tonnes of wheat since a combination of high energy prices, bad weather and growing demand for biofuels sent grain prices soaring in 2008.

India halted rice exports at that time, when global prices for the staple grain jumped to an all-time high of US$1,050 a tonne, triggering similar restrictions from other suppliers and panic buying in importers such as the Philippines.