A customer wearing face mask buys flour at a supermarket on May 12, 2020 in Taiyuan, Shanxi Province of China.
Zhang Yun | China News Service | Getty Images
The world’s second largest economy, which has limited arable land, is facing pressure to shore up its food supplies as prices for food started ticking higher last year, prior to the virus outbreak.
Lockdowns and movement restrictions aimed at containing the coronavirus have triggered transportation and logistics bottlenecks.
Those blockages have highlighted the vulnerability of global supply chains, and fears of food shortages have come to the forefront of countries, both in developed and emerging economies.
Consumers in China are worried about further repercussions from the pandemic as it continues to spread globally.
“People there (in China) are panicked that coronavirus will eventually shut down the world’s ports, making it impossible for them to import,” said Arlan Suderman, chief commodities economist for INTL FCStone in a tweet on Monday. “As such, they are hoarding supplies now while they are cheap and available.”
“Fear is a powerful motivator. It’s driving policy in China currently. Fits well with those hardliners that want to rebuild food reserves,” he added.
Food prices surge
China is the world’s largest consumer of pork, a staple protein for the country.
In the first four months of the year, meat imports in China rose 82% compared to a year ago. These include pork, beef and poultry.
“We expect food stockpiling to continue especially in cities exposed to logistic disruption. The confluence of expected food price increases alongside an economic contraction and rising unemployment will push up the risk of civil unrest,” said Kaho Yu, senior Asia risk analyst at Verisk Maplecroft, a consultancy.
Already, food inflation in the country has been ticking higher.
Last Tuesday, China announced that food prices rose 14.8% in April from a year ago. Even though it was lower than the 18% increase in March, it was still at a high level.
Pork prices rose almost 97% in April in what has been a persistent trend since early 2019 due to the African swine fever epidemic in pigs that decimated China’s hog herds.
In comparison, non-food prices rose just 0.4% in April, official government data showed.
Soybean supplies are particularly vulnerable to supply shocks as China, the top importer of the commodity, needs the oilseed to make animal feed and cooking oil.
In April, China’s soybean imports fell 12% from a year earlier, customs data showed, due to bad weather causing the delay of cargoes from top supplier Brazil.
As for rice, China is the world’s…