China's request is based on a possible second wave of the coronavirus and the worsening of the disease in other countries
China has asked trading companies and food processors to increase stocks of grains and oilseeds in the face of a possible second wave of the coronavirus and the worsening disease in other countries.
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State and private grain traders, as well as food producers, were told to buy larger volumes of soybeans, soybean oil and corn during talks with China's Ministry of Commerce in recent days, three trade sources told Reuters news agency.
“There is a possibility of a supply collapse due to coronavirus infections. For example, an origin or destination port may close,” said a negotiator for one of China's biggest food processors. “They advised us to build up inventories, keep supplies higher than we normally have. Things don't look good in Brazil,” he added.
China's Ministry of Commerce did not respond to a request for comment on plans to increase food stocks.
Also, 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 came into effect because of the coronavirus, leading to a drop in Chinese stocks. soybeans to record lows.
In recent weeks, Chinese state-owned agricultural conglomerate COFCO and grain distributor Sinograin have increased purchases of US soybeans and corn. Beijing has also increased its import quota allocations to major grain buyers, paving the way for potential new purchases.
