The mystery of China’s grain reserves than any other part of the world. But why? (Courier della sera)

The stockpile of grain stored in Chinese pits exceeds 140 million tons – more than was released from the market due to the Russian invasion of Ukraine. But why was Xi Jinping prepared for this shock? And how will he use the “treasure” he refers to? – The Italian newspaper writes on Thursday Courier Della SerraQuoted by Radar.

Exploring grain stocks in ChinaPhoto: Costfoto / ddp USA / Profimedia

Despite being the world’s leading importer of wheat, it is not affected by the current crisis, but there is one country that can take advantage of it: China. For “mysterious” reasons, it has accumulated more wheat reserves than the rest of the world.

Vladimir Putin began storing grain in state reserves long before he began military occupation of Ukrainian soil. If Xi Jinping wants, Beijing’s food delivery puzzle can be solved with a few twists and turns.

At present, we can only hear about this extraordinary situation, its possible explanations and further evolutions.

The data are official, and one of the most reliable sources in the industry is the U.S. Overseas Agricultural Service: grain reserves in Chinese pits exceed 140 megatons (million tons). If you compare this figure with the amount of wheat lost in world markets due to the Russian invasion of Ukraine, that is good news: a maximum of 50 or 60 megatons. However, the huge Chinese stockpile is staggering compared to the grain reserves available in other parts of the world.

In total reserves in the United States, Europe, Canada and Australia do not come close to 40 megatons. South Asia, which includes India, still has fewer tonnes of reserves (but it is true that India has become a major producer / exporter of wheat). The West covers half the size of the region, which includes the Middle East and North Africa.

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If all these stocks are total, the result is positive and at the same time confusing: with a total of 280 megatons of wheat, there are enough reserves in the world to deal with Putin’s threat to seize Ukrainian exports.

As with fossil fuels, we are not really facing shortages, and some price increases are high compared to the actual imbalances between supply and demand. However, partial disruptions to traditional supply flows are sufficient to send markets into fibrillation. In addition, grain reserves are managed by each country according to specific criteria and are not available to deal with local emergencies.

“Chinese Mystery”

All of the world’s accumulated grain reserves are below China’s 140 megatons. The population of the Central Kingdom is insufficient to explain this inequality. With its 1.4 billion people, the People’s Republic is far from representing half of the world’s population (about eight billion).

Its stakes are high in Ukraine as a result of a cumulative, planned policy that began long before the start of the war.

Did Xi Jinping know long ago what Putin would do and predict the consequences for the global food market? Of course, the first phase of the Russian occupation predates 2014, so this explanation is not entirely exaggerated. However, it should be plugged into a wider context.

The Chinese Communist leadership is frantic on the issue of food self-sufficiency, which, among other things, is causing its expansion in Africa and Latin America. Beijing leaders may have anticipated a return to global post-Govt food demand. Communist labeling fears inflation, remember that one of the reasons for the eruption of social protests in Tiananmen Square in 1989 was the high cost of living.

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Of course, as traders and speculators, Chinese leaders had a remarkable ability: if they started selling their surplus grain in the markets today, they would make enormous profits. Will they? When will they do it? How?

Unlike oil reserves, grain reserves cannot be maintained indefinitely: they are perishable. What would be the serious management of this huge food tradition where Xi Jinping is “standing”?

Gradual selling in the markets will be profitable for the benefit of the Chinese government and will have a calming effect on world prices; However he acknowledged that their numbers were not enough to defeat Putin’s regime.

Can we imagine a major humanitarian diplomacy by Beijing to provide assistance to countries most affected by the current crisis in North Africa and the Middle East? We will sooner or later find out what strategies and calculations Xi Jinping will use to use his power in the food crisis.

However, the mystery of why China is preparing for the grain crisis still lingers.


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