The Chinese government is asking companies and food producers to replenish their grain and oilseed stocks to prepare for a second wave of corona infections. People fear for the stability of supply chains around the world.
State-owned companies as well as private grain dealers should process more soybeans and provide soybean oil and feed raw materials such as soybean meal and corn.
A letter from the Ministry of Economy assumes that the supply chains in the world are not yet stable enough. Supply bottlenecks could again occur in some regions of the world. This is not the case in Brazil, where China supplies a large amount of soybeans and meat. The infections there are already higher than in Spain and Italy.
Soybean deliveries from Brazil were already delayed in March and April, as workers in many parts of the country were down. China's soybean stocks have been at a record low ever since. In the meantime, the supply chain should function better again.
State-owned grain trader COFCO and Chinese warehouse Sinograin have bought more US soybeans and corn in the past few days.In early July, 240,000 tons of US soybeans were purchased. Beijing has also raised import quotas for large private grain importers. When the export season in South America ends, it will mainly be necessary to buy US soybeans and corn when the North American harvest begins.
The players in China are encouraged to buy raw materials not only in Brazil, but from everywhere in order to build up stocks.
China is also one of the largest meat importers in the world after African swine fever has severely decimated the national pig population there. The United States has delivered much more pork to China than usual in the past few weeks. However, after 20 of the largest slaughterhouses in the United States were forced to close due to the coronavirus workforce, supply bottlenecks and rising prices are now emerging in US supermarkets.
Source
Hansa Terminhandel GmbH
