Asia grain mountains swell as governments fret over food security
Towering grain mountains in Asia, already large enough to feed China for eight months, are set to grow even bigger as governments persist in shoring up their safety buffers against hard times.
Haunted by a 2008 food crisis that sparked unrest and panic buying, states will keep piling grain into reserves despite the strain on their finances and storage problems, buoying prices that have been hit by expectations of bumper harvests.
"The most populated countries, especially in Asia, will be very reluctant to see their inventories go down," said Abdolreza Abbassian, senior economist at the United Nation's Food and Agriculture Organization in Rome.
"Lessons learnt during the 90s and 2007-08 have convinced policymakers that the international market is important but it cannot be relied on 100 percent for food security."
With hoarding the name of the game, Asia's top grain-buying states have accumulated a whopping 100 million tonnes of rice and 90 million tonnes of wheat since a combination of high energy prices, bad weather and growing demand for biofuels sent grain prices soaring in 2008.
India halted rice exports at that time, when global prices for the staple grain <RI-THWHB-P1> jumped to an all-time high of $1,050 a tonne, triggering similar restrictions from other suppliers and panic-buying in importers such as the Philippines.
"Higher grain stocks reflect the government's priority of having a more-than-sufficient buffer to avoid any shortage and to run its welfare food programmes," said N. R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy in New Delhi.
"The entire stock will evaporate if one single crop fails."
India was forced to start exporting grains in 2011 after scenes of wheat and rice rotting in open fields grabbed international headlines. But half-hearted attempts to sell grains have not had much impact on stockpiles.
India's rice stocks at government warehouses stood at 21 million tonnes on Sept. 1, against an official target of 9.8 million tonnes, thanks to four consecutive years of good monsoon rains. It had 38 million tonnes of wheat against a target of 17.1 million tonnes.
All Eyes on Exporters
Asian nations with large populations to feed will not reduce their stockpiles unless they see inventories rising in top exporting countries such as the United States, Australia and Russia.
"I don't think people are comfortable with grain supplies just yet," said one Melbourne-based analyst. "As of now, stockpiles have merely shifted from producers to buyers."
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