China Orders Giant Grains Stock-Take

Nogger's blog reports that China orders giant grains stock-take

(emphasis mine) [my comment]

Thursday, 26 March 2009
China Orders Giant Grains Stock-Take, Cat, Pigeons Etc

Do China's Wheat Reserves Really Exist?

Remember that one from this very blog a month or two back?
[I do: Does China's 60 million tons of wheat reserves actually exists?]

It would seem that even the government themselves have begun to smell a rodent or two. And it's not even Year of the Rat

If they don't mind slipping the odd bit of melamine in some baby formula, then the average Chinese storekeeper isn't going to be above half-inching a few million tonnes of grain here & there now are they?

Rumours are rife of such skulduggery not to mention falsifying records to claim storage on grain that doesn't exist,
Chinese Vice Premier Li Keqiang has ordered a complete stock-take of the country's entire grain inventory. [This will be interesting]

That could throw up some very interesting figures.

Li must have been reading Nogger's Blog himself.

I bet there are a few Chinese store keepers busy buying grain out of their own pockets right now to make up for one hell of a giant shortfall. If they have the money to buy them that is, if not I think I'd be packing in a serious hurry rather than waiting for the "auditors" to come knocking at my door.

I don't think that the old
"when you said stock-take, I thought you said take stock, me very sorry," will wash with these boys. They take their jobs a little bit more seriously than that.

"Every warehouse must be checked. Every inventory book must be examined. And the examination must be complete and thorough. [Someone is worried] As a development country with a population of more than a billion. grain has always been the first and foremost issue to maintain peace and stability," Li said.

"Only when we know the exact amount of our grain stock, can we make wise decisions in purchasing and stocking grain [and China's decisions in purchasing and stocking grain could have BIG ramifications], and managing the grain stock to cope with the need of development and reform."

A typical Chinese audit

My reaction: For those of you who don't remember, Northern China was hit by worst drought in 50 years. So China's wheat reserves or lack thereof is a somewhat pressing issue, especially considering the catastrophic fall in 2009 global food production.

Personally, I believe the combinations of a poor 2009 crop combined with overstated wheat reserves means China will be importing quite a lot of grain in the second half of this year.

This entry was posted in China, Food_Crisis, News_Developments. Bookmark the permalink.

6 Responses to China Orders Giant Grains Stock-Take

  1. Anonymous says:

    Check this out:

    Yuans for Argentina?

  2. Anonymous says:

    Well, tea is not a staple.
    Wheat is a staple food.
    World Wheat Production Estimates (MMT) according to Nogger’s Blog:
    2009/10 2008/09
    Total EU-27 139.6 151.7
    Total FSU 100.3 120.1
    Total N America 84.3 100.5
    Total S America 24.1 15.8
    Total Asia 252.2 255.9
    Total Africa 23.6 21.7
    Total Oceana 22.2 21.2
    Total World 646.3 686.9

    Rice a staple food.
    “25 February 2009, Rome - The 2008 rice bumper harvest is coming to a close with better-than-expected production that could help ease consumer prices, FAO said in its February Rice Market Monitor. … Global rice prices for 2008 ended the year on average 80 percent higher than in 2007 despite the steady decline since their peak levels in May, FAO said.”

    "12 February 2009, Rome - Early indications point to a reduction in global cereal output in 2009 from the 2008 record, according to FAO's latest Crop Prospects and Food Situation report."

    A very useful tool for comparing food prices:
    “19 March 2009, Rome – As part of its response to high food prices, FAO has developed an interactive database of staple food prices on national markets in 55 developing countries from Afghanistan to Zimbabwe. The “National Basic Food Prices Data and Analysis Tool” shows the prices of different food commodities in local currencies or dollars and local measurements as well as standard weights. It allows for price comparisons between domestic and international markets, between different markets in the same country, as well as between countries. … The new analysis tool has benefited from a financial contribution from Spain under the FAO Initiative on Soaring Food Prices. FAO plans to add new countries and series to the database, resources permitting.”

    News from China and the FAO:
    „25 March 2009, Rome –The People’s Republic of China has agreed to make available to FAO a $30 million trust fund to support developing countries in improving their agricultural productivity to achieve the Millennium Development Goals. The agreement signed yesterday in Beijing also marks China’s entry into FAO’s donor community. … China has been providing technical cooperation through FAO in Africa for many years and in 2005 China formalized a new Strategic Alliance with FAO for south-south cooperation, in which developing countries help each other through transfer of knowledge, personnel and technologies.“

    I don’t know if this should be read together with this:
    “Saudi Arabia has set up an investment fund to buy land to grow crops in Pakistan and the Horn of Africa. China is following the same route in southern Africa, as are countries across South Asia and the Gulf.”
    “… And reports are circulating in China about local investors buying 50,000 hectares of farmland in Argentina, and considering other investments in Argentina and Brazil.”
    “… China and the Middle East countries will invest in horticulture sector of Pakistan to the tune of $5 billion during the current year 2009, an official of Agribusiness Support Fund (ASF) said Wednesday.”

    “BEIJING, March 4 - China is not pushing to expand overseas farming and Chinese companies are less active in their investment abroad because of concerns of potential political risks, a senior Agriculture Ministry official said on Wednesday.”

  3. The drought affecting China is enveloping almost one-fourth of the world's arid land. From Argentina to Texas, South Africa to Syria, grain production will be drastically down this year. Because of low food prices, even places such as Kansas have seeded far less acres this year, because they did not see the profit.

    Australia, The EU, Canada and The US went from 54 million tons of grain production in 2004, to 27 million tons in 2008, due to low food prices. That means the food stocks and piles are very low.

    Food prices will spike, along with some nasty economic percussions, and place many countries teetering on the edge to go over.

  4. K'ang you-wei says:

    Yuans yet in EU atms?
    get new suit of silk clothes
    made while you shop S.hai
    for ge li/ cheri autos on sale.
    Pay in pandas. Chao!

  5. Anonymous says:

    Agree with China. China will spend USD as much as he can before the decline of USD. That is a signal from China that hyperinflation will come. This is the last minute to buy cheap things by now. Before hyperinflation, adnormal deflation is always appearing because liquidation is being distroyed by the US Caused Crazy Crisis.

  6. Links in deleted comments were breaking page formatting.


    Anonymous said...
    Same news on China and Argentina currency swap system here: China-Argentina-settle-trade-yuan/story.aspx?guid= {9229A1CC-3B26-4694-A82C-1D24927C4433}

    and here (Financial Times Deutschland): Alternative-zum-Dollar-China-schiebt-Renminbi-als-Leitw %E4hrung-an/494008.html

    According to Financial Times Deutschland, besides South Korea, Malaysia, Belarus and Indonesia there are on the list for future currency swaps: Venezuela, Brazil.

    March 31, 2009 1:07 AM


    Martijn said...
    Tea is already increasing in price due to drought according to financial times. Production declined 1.2%. b0b3f082-1d8a-11de-9eb3-00144feabdc0.html?nclick_check=1

    March 31, 2009 3:02 AM


    Anonymous said...
    By the way: Russia also tries to avoid USD in trade relationships with Latin America:
    Russland und Venezuela erwägen Umstellung auf nationale Währungen in bilateralen Geschäften

    Ria Novosti published this only „in small print“ in English:
    The Russian president said Moscow and Caracas could switch to national currencies in bilateral payments.

    And with other countries like Turkey or Armenia:
    Importantly, Turkey and Russia may start to use the Turkish lira and the Russian ruble in foreign trade, which could increase Turkish exports to Russia, as well as weakening dependence on dollar mediation.;=167782&bolum;=106
    Armenien möchte Handel mit Russland von Dollar auf Rubel umstellen

    And Russia found a rather creative solution for Guatemala: It could pay in sugar and coffee:
    Guatemala will russische Waffenlieferungen mit Zucker und Kaffee bezahlen 20090228_guatemala_interested_food_arms_trade_russia

    March 31, 2009 4:43 AM

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