China has asked trading firms and food processors to boost inventories of grains and oilseeds as a possible second wave of coronavirus cases and worsening infection rates elsewhere raise concerns about global supply lines.
Both state-run and private grain traders as well as food producers were urged to procure higher volumes of soybeans, soyoil and corn during calls with China’s Ministry of Commerce in recent days, three trade sources told Reuters.
A senior trader at one of China’s leading food processors, which was on a call last week with authorities to discuss purchases said: “They have advised us to increase stocks, keep supplies higher than we usually have. Things are not looking good in Brazil,” he added, referring to China’s main supplier of soybeans and a key meat exporter where the number of coronavirus cases has surpassed those in Spain and Italy.
“One of the main concerns is how the epidemic in South America might impact supplies (of beans) to China,” another source said.
China’s state-owned agriculture conglomerate COFCO and grain stockpiler Sinograin have been stepping up purchases of U.S. soybeans and corn in recent weeks.
Chinese importers bought at least four cargoes, or about 240,000 tonnes, of U.S. soybeans on Monday for shipment beginning in July, two traders familiar with the deals said.
Beijing has also increased its allocations of crop import quotas to major grain buyers, paving the way for further potential purchases.