China has long been obsessed with finding ways to ensure there is enough food for its people, and with good reason.
ith almost a fifth of the world’s population, limited arable land and the increasing challenge of climate change, President Xi Jinping’s administration has urged farmers to maximize harvests and consumers to minimize waste. It has built up huge inventories to cope with shortages and created new seeds to increase production.
Despite this, the country still buys around 60% of all internationally traded soybeans and is the largest importer of corn and barley. It has also recently become one of the world’s largest buyers of wheat. This makes rising global crop costs and a possible looming world food crisis a major concern for the government, particularly with regard to how local prices are developing. Here are some of the food security challenges facing China:
soybeans, edible oils
China’s local consumption of soybeans is almost as large as the entire US crop, and the country has to import about 85% of its needs. The beans are processed into cooking oil for cooking and other food uses, and feed for the world’s largest population of pigs. Global soybean prices have doubled in the past two years due to dry weather in South America and a shortage of oil-bearing seeds. If the US doesn’t have a bumper crop this year, it could go even higher.
“Soybeans pose the greatest risk of inflation,” said Jim Huang, head of China-America Commodity Data Analytics. Rising crude oil and freight prices and the weakening yuan are making the situation worse, he said via email.
China is also the second largest importer of palm oil after India and a major buyer of sunflower oil. Global cooking oil prices have risen to record levels due to drought, labor shortages and Russia’s war in Ukraine. The latest rebound came after top exporter Indonesia banned palm oil shipments.
The government is making major efforts to boost soybean production, with the harvest expected to increase by 19% in 2022-23. But with production so low compared to consumption, it won’t make much of an impression on imports.
For a long time, China didn’t buy much corn abroad, but in recent years that has started to change as the country has risen to become the world’s largest importer, driven by the need to replenish inventories and feed a rapidly growing pig population. The surge in buying, much of it from the US, its geopolitical rival, spurred China to increase its focus on self-sufficiency as a national security goal.
Unlike soybeans, where the country was heavily dependent on foreign supplies, corn imports accounted for only about 10% of domestic consumption in 2020-21, and that percentage is expected to shrink to about 6% by 2022-23, according to the U.S. Ministry of Agriculture.
China buys quite a bit of corn from Ukraine, with the Black Sea nation providing about 30% of shipments last year, its second largest supplier. However, this trade was curbed by the Russian invasion and is one of the possible reasons for an expected drop in imports in the coming year.
The world’s wheat supply is under threat as everything from war to drought, flooding and heat waves affect production. Global wheat prices rose to a record in March after Russia invaded Ukraine and are 80% more expensive than a year earlier, helping push global food costs to an all-time high.
As with corn, the country’s reliance on imports is low, accounting for about 7% of consumption in 2021-22. This means that it is still one of the top buyers worldwide, alongside Indonesia, Egypt and Turkey. There were concerns about production in China, and at one point a senior official said the country could be facing its worst harvesting conditions in history after last year’s record-breaking floods. Authorities are also investigating whether there is illegal crop destruction after videos showing unripe wheat being destroyed or cut down went viral on social media.
China has built up huge stocks of wheat, rice and corn, and the USDA estimates that the country holds at least half, if not more, of the world’s stocks of these commodities. The government will release stocks as needed to ease food inflation or shortages, said Iris Pang, chief economist for Greater China at ING Bank. Fertilizer costs are a concern and could push up food inflation, but “not a worrying situation,” she added.
In the longer term, Beijing is calling for stronger measures to stabilize production with two priorities: new seeds and protection of arable land. It is trying to develop genetically modified seeds to increase yields and wants to prevent farmland from being used for construction or converted into golf courses.
https://www.independent.ie/business/farming/agri-business/agri-food/record-food-costs-throw-spotlight-on-how-china-will-feed-itself-41677814.html Record food costs highlight how China will feed itself