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The Request from China Is Based on a Possible Second Wave of the Coronavirus and the Worsening of the Disease in Other Countries
China has requested that trading companies and food processors increase stocks of grains and oilseeds in light of a possible second wave of the coronavirus and the worsening of the disease in other countries.
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State and private grain negotiators, as well as food producers, have been advised to acquire larger volumes of soybeans, soybean oil, and corn during discussions with the Ministry of Commerce of China in recent days, three trading sources told Reuters news agency.
“There is a possibility of a supply collapse due to coronavirus infections. For example, a port of origin or destination may close”, said a negotiator from one of China’s largest food processors. “They advised us to increase stocks, keep supplies higher than we normally have. Things do not look good in Brazil”, he added.
The Ministry of Commerce of China did not respond to a request for comment on plans to increase food stocks.
Additionally, according to Reuters, Brazilian soybean shipments were delayed in March and April due to a combination of heavy rains and reduced labor as containment rules due to the coronavirus took effect, leading to a drop in Chinese soybean stocks to record lows.
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In recent weeks, the state-owned agricultural conglomerate COFCO and the grain distributor Sinograin have increased soybean and corn purchases in the U.S. Beijing has also increased import quota allocations for major grain buyers, paving the way for potential new purchases.
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