China will upgrade its management of strategic reserves such as food and energy, the latest step in efforts to boost national security beyond military weapons and training. In that regard, a new State Grain Reserves Administration will be set up.
China will set up a state grain and reserves administration, according to a plan submitted to the national legislature for deliberations. Responsibilities of the commission include the stocking, rotation and management of the nation’s strategic and emergency-aid materials, including grain, cotton and sugar. The State Administration of Grain will be dismantled, according to the plan on institutional restructuring of the State Council submitted to the first session of the 13th National People’s Congress. Creating a central body under the National Development and Reform Commission is a bid to cut bureaucracy and overlaps in the face of challenges ranging from volatile commodity prices to natural disasters and, in a conflict situation, the risk of trade routes being blocked. China does not release figures for its stockpiles of corn, rice and wheat, but it is importing more food and leasing overseas farmland to meet growing demand as its arable land shrinks, partly because of urbanisation and pollution.
Chinese stocks of wheat at present account for 48 per cent of the global total and 110 per cent of domestic consumption, according to US trade publication Corn and Soybean Digest. But managing the reserves in an effective way is a challenge for the authorities in China. Beijing controls the market by buying grain from farmers at a fixed minimum price when the market price drops below that level.