China’s food security concerns mount, but supply risks are growing as farmers hoard grains

Industry insiders say the coronavirus pandemic has resulted in farmers holding about 20 to 30 per cent more grain in reserve in their home warehouses

National Food and Strategic Reserves Administration does not comment on reason for the decline in grain purchases in Henan, but says China’s purchasing of the summer harvest is on track

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A man works in the wheat field in Yanzhuang village, Anyang city, in central China’s Henan province. The nation’s agriculture minister, Han Changfu, wrote in an opinion piece published on Friday in People’s Daily that China is “confident and capable of ensuring food security”. Photo: Xinhua

Published: 9:56pm, 7 Aug 2020Updated: 10:16am, 10 Aug 2020

Prices of wheat and corn are rising sharply in the world’s most populous country, raising fresh questions about whether China’s food supply is truly safe amid a rising dependence on grain imports, shrinking arable land and disruptions caused by natural disasters.

The latest evidence came via a decline in the state purchase of summer harvests of wheat – an important grain for Chinese households. According to data released by China’s National Food and Strategic Reserves Administration (NFSRA), China’s state grain reserve system purchased 41 million tonnes (45 million short tons) of fresh wheat from June 1 to July 31, a drop of 17.2 per cent from a year ago.

Industry insiders said that many farmers have decided to hoard grains – instead of selling them to the government – as a result of the coronavirus pandemic.

Ma Xiaojuan, deputy general manager at the Henan Oil and Grain Foreign Trade General Company, said farmers are estimated to have put about 20 to 30 per cent more in reserve in their home warehouses, while traders, who play the role of agents between farmers and state-run warehouses, are also hoarding grains in anticipation of further price increases.

Merchants wait for customers at the Xudong grain market in Hubei province. Industry insiders said that many farmers this year have decided to hoard grains – instead of selling them to the government – as a result of the coronavirus pandemic. Photo: AP

In Henan, one of China’s major wheat-growing provinces, an online trading system for grain purchases by state-run warehouses was closed from Thursday, according to a notice issued by the local subsidiary of China Grain Reserves Cooperative that was seen by the South China Morning Post.