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Chinese grain imperatives

SinoShip’s Mark Downing on China’s quest for food security.

Roughly a tenth of seaborne dry bulk goods is composed of grain destined as food, feed or industrial inputs. With a fifth of the world’s population and less than a tenth of its arable land, China is increasingly being forced to tap this global agricultural supply chain despite decades of rhetoric around food self-sufficiency

Motivated to provide food security since the Great Leap Forward, Beijing has long sought food self-sufficiency and resisted market forces to import grains and other land-intensive crops.

Officials have been relaxing the definition of self-reliance for years as they acknowledge the growing need for food imports. Policies are being readjusted to accommodate imports to supplement to China’s domestic food supplies, but the markets are still bound with support measures and trade barriers to prevent imports from dominating.

Policymakers still believe that China must produce most, if not all, of its staple foods at home rather than rely on unpredictable world markets. But this leads to inefficient food-production practices such as subsidising farmers to produce food that would be cheaper to import and incentives to grow grain on unsuitable land that requires significant chemical boosts.

China’s grain production is at or near record levels as government policy has bolstered production. China achieved remarkable increases in domestic grain production, rising 40% during 2003-13 and reached a 2010 set target of 550m tonnes. Despite the potential for further increased productivity, output is ultimately capped by fixed arable land and limited uncontaminated water resources. Beijing’s 2020 grain production target has been set at an achievable 550m tonnes, well below the estimated domestic demand of 720m tonnes and the 2014 harvest of 607m tonnes.

Production of the key food and livestock feed grains of corn, wheat and rice is at 95% of domestic consumption. But the loosening of the definition of ‘grain self-sufficiency’ towards ‘edible grain self-sufficiency’ by policymakers has propelled imports of feed grains such as soybeans to 85% of demand last year.

By 2011, China lost its ability to harvest for itself what it needs to eat and became the world’s largest importer of agricultural products and a net importer of grain. China swung from being net exporter to net importer of corn and began importing large volumes of distillers’ dried grains.

Imported soybeans are increasingly feeding China’s burgeoning livestock herds as average diets incorporate ever more meat.

China’s imports of corn and corn substitutes, including barley, sorghum and distillers’ grain hit a record high this July as feed mills took advantage of cheap overseas prices to replace expensive domestic grain in part owing to Beijing’s stockpile system.

Projections by the US Department of Agriculture (USDA) anticipate continued growth in Chinese agricultural imports through 2023, with soybeans the dominant import commodity and imports of corn also expected to rise.

China has long been self-sufficient as a matter of policy, providing a measure of government legitimacy. It was largely absent from grain imports at the beginning of the decade, but has since transformed into the world’s largest food importer.


This article first appeared in the just published latest issue of SinoShip magazine. Readers can access the whole magazine online for free by clicking here.

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