Russia Bans Grain Export To China Causing Problems
China is one of the world’s largest importers of grain, therefore with the disruption in movement of goods and services it will have problem ensuring its own food security. Though there may be no immediate concern due to high level of production in staple grains. Yet global anxiety over food supplies will exert certain pressure on the country’s future grain requirements. It will surely cast a shadow on the domestic supply of agricultural products in the short term.
Now Russia, one of the biggest suppliers of grain to China has suspended its export to China.While this suspension of Russia’s grain exports may not pose an immediate threat to China’s food security, it could forebode a profound change to the supply structure of China’s agricultural products.
Russia has reportedly exhausted its grain export quota earlier than expected, meaning the world’s biggest wheat exporter will suspend grain exports until July 1. And Russia is not the only country that has imposed a ban on grain exports in recent days. As the Wuhan virus pandemic disrupts normal farming activities and sparks fears over food security, major grain producers around the world have restricted exports to ensure sufficient supplies for their domestic markets.
One of the most immediate effects will likely be upward pressure on food prices. Take soybeans, a staple food and other requirements of Chinese people. Russia announced it would impose a ban on soybean exports to China until the end of June, while some other countries including Belarus have reportedly issued similar soybean export bans. China is the largest global importer of soybeans. In 2019, China imported a total of 88.51 million tons of soybeans, accounting for about 85 percent of domestic consumption.
For now, China may still be able to source its soybean supply from Brazil and the US, but if more soybean exporters impose bans due to unexpected coronavirus impact, then China’s domestic feed production could be directly impacted, which will in turn affect the supply of other agricultural products like pork.
In this sense, the pandemic has disrupted the global supply chain for agricultural sector, which will likely be reflected in food prices in the near future.
When the global market is unable to provide sufficient supplies, China will have to rely more on its domestic agricultural industry. There is no denying there may be supply shortages for many agricultural products, which will pose a direct threat to food security and are bound to affect production of certain agricultural products like pork and processed food.
