Chinese authorities have been fretting about "food security" and grain self-sufficiency. Suddenly, the country has a massive glut of grain--nearly a fourth of this year's grain harvest has been stashed in reserves to support prices.
In January, Chinese authorities reported that grain reserves were at a record-high level. They were out of storage space and using temporary structures and rented space to store the grain. During 2013, authorities purchased 82.5 million metric tons of grain through support-price programs, 24 percent of the 345 mmt total purchases. The support price purchases were up from 31 mmt in 2012.
Authorities auctioned off 34.8 mmt of grain into the market and arranged interprovincial transfers of grain inventories totaling 13.5 mmt during 2013.
In the first three months of 2014, authorities continued to buy corn and rice aggressively to support prices. As of April 5, purchases of corn for the "temporary reserve" to support prices reached 64 mmt for the season. The total is expected to reach 67 mmt by the end of April. That total would be equal to 31 percent of the 2013 corn harvest.
Support-price purchases of japonica rice are also at a historical high of 13.6 mmt as of the end of March. Over 10 mmt was purchased in Heilongjiang Province.