From the Wall Street Journal, March 24:
Countries with large grain reserves, such as China, can shield their citizens from higher food prices caused by war in Ukraine
Food stockpiles might look comfortable at the global level. In reality, only a handful of governments have provisions to cope with grain shortages caused by the war in Ukraine.
For important cereals such as wheat and corn, the world-wide stock-to-use ratio—a measure of inventories as a proportion of annual demand—will finish the year at 29%, according to forecasts by the Food and Agriculture Organization of the United Nations. This is lower than before the pandemic, although not worryingly so.
But the headline number is deceptive as a small number of countries control the biggest share. The U.S. Department of Agriculture estimates that China holds half of the world’s wheat reserves and 70% of its corn. After five consecutive record crops, India has almost one-tenth of global wheat stockpiles. The U.S. has 6% and 12% of global wheat and corn reserves, respectively. Combined, countries in North Africa that are especially reliant on grain imports from the Black Sea region have a roughly 5% share of global wheat reserves.
With the largest grain inventories in the world, China is best prepared for a global crunch. Beijing has given priority to food security for its 1.4 billion-strong population for several years and began steadily building the country’s strategic reserves after the 2008 food price crisis.
China significantly ramped up imports at the beginning of the Covid-19 outbreak. In 2020, the country brought in 26% more grains and oilseeds than the year before, according to agricultural market data provider AgFlow. Import volumes rose a further 11% in 2021 and continued to show year-over-year growth in January and February of this year.
As Ukraine and Russia are major international grain exporters, tensions between the two countries began to push up the cost of commodities well before Russian troops first crossed the Ukrainian border on Feb. 24. Since December last year, cash prices for Argentine wheat and corn—a likely substitute for Ukrainian crops for a number of importing nations, especially in Africa—are up 27% and 38% respectively, according to AgFlow....
....MUCH MORE
We'll have more on stockpiles next week. In the meantime keep an eye open for China to do a bit of grain diplomacy with Egypt. As noted in July 25's "China & Egypt Strengthen Belt And Road Collaborations Including The Suez Canal International Logistics Zone"
Starting with the Bosporus/Dardanelles between the Black and Mediterranean Seas:
"China will buy Turkey on the cheap"
Why Turkey is Important
And the Panama Canal:
China Will Help Panama Secure the Canal Against Terrorists
and:
"Don't Fear China's Arctic Takeover"
And
all of a sudden you have China on-site on three of the world's MAJOR
shipping chokepoints and what could very well become the fourth at the
Bering Straits.
....It's just that, as we've seen over the last year, supply lines are fragile, a weak spot even without unfriendlies doing an interdiction.I suppose somebody should keep an eye on Morocco to note if the Chinese set up camp on the Strait of Gibraltar.
Should someone actively attempt to halt transportation it would make the Ever Given snafu look like child's play. As just one example, China has been very active in extending their belt and road initiative in Panama, including a $1.4 billion bridge over the canal and rail and other infrastructure.
And that's just one potential flashpoint. The Chinese influence in Brazil, hitherto based on VALE and iron ore could potentially go exponential as Brazil expands/modernizes its shipping and rail infrastructure. And then there's Australia...and...