China is constantly buying and stockpiling food and fuel as it worries about the continuing effects of the global pandemic and fears that it could run short of the much-needed 1.4 billion people.
The world’s second-largest economy is pushing for more food stocks because of rising global prices due to the pandemic and Beijing fears it could continue, according to CNBC. Fear is a strong motivator and stems in part from these increases, but also from the transport problems that were recorded in the midst of the pandemic. It is a key factor influencing policy at the moment and suits the hardest-working government officials who want to increase food stocks, market analysts told the news network. This practically means that the trend will probably continue.
At the same time, due to the sharp fall in international prices for black gold, China is slowly but steadily increasing its reserves of both crude and refined fuels. Imports of crude oil fell in April compared to the same month in 2019 but again rose compared to March. What is stopping Beijing from getting even more oil is the limitations on the world’s oil storage capacity.
China has already begun work to increase these storage facilities to further boost the country’s reserves. The Chinese fear that the coronavirus could cause new problems in major ports around the world, making it impossible to import various goods, especially food, another source told CNBC. That’s why Beijing is accumulating supplies now that products are cheap and available.
China is the world’s largest consumer of pork. Consumption in beef and poultry is also high. This may explain the fact that in the first four months of 2020 alone, meat imports from China increased by more than 80% compared to the same period a year ago. Last week, China announced that food prices rose by almost 15% in April compared to the same month last year. In March, the increase had reached 18% on an annual basis. Pandemic is not the only factor that has led to these increases but has exacerbated the situation.
Pork prices have risen sharply in recent years, mainly due to the outbreak of African swine fever in the country’s farms. This caused huge production problems. Chicken production has also been hit because many parts of the country have been quarantined due to the pandemic.
Soybeans are also in great demand, with the largest quantities being consumed worldwide by China, as they are used for both animal feed and cooking.
Indicatively, according to CNBC in April, soybean imports from China fell more than 10% year-on-year due to delays in shipments from Brazil, which is China’s main supplier. Beijing has also moved to find additional rice, despite China being the world’s largest producer, with most of its production being channelled to the domestic market.