Asia grain mountains swell as governments fret over food security
World supplies have been tight in the last six years, as the global grain market lurched from one crop crisis to another, including a devastating drought in the United States, Brazil and Argentina in 2012.
In contrast to Asia's giant reserves, the United States - the world's main corn exporter - ended the marketing year in August with its lowest stocks in 16 years.
Australia, the No. 2 wheat exporter, was left with 3.7 million tonnes of wheat at the end of last month, just half of year ago closing stocks of more than 7 million tonnes.
And the grain storage situation in Asia is only going to worsen with near-perfect weather likely to boost stocks.
India, which already has some 12 million tonnes of rice and wheat stored in the open, covered with just tarpaulin sheets, will see up to 30 million tonnes of rice added to its stocks by the end of the year.
India's rice production is forecast to reach close to last year's all-time high, while good monsoon rains have left ample moisture for wheat to thrive in the months ahead.
In Thailand, the government is extending its controversial rice intervention scheme for a third year. The scheme supports farmers by paying them above market rates, making supplies uncompetitive and costing the country its title as the world's biggest rice exporter.
The populist move will add about 10 million tonnes by year-end to existing stocks estimated at 16 million currently, or roughly half of annual global trade. With warehouses bursting at the seams, Thai officials are considering renting air force airport hangars for storage.
Although wheat stocks in China have fallen in the last few years, the country is seen emerging as the world's No. 1 importer as it rebuilds depleted reserves and meets a shortfall in domestic supplies.
China is expected to buy around 9.5 to 10 million tonnes of wheat in the year to June 2014, according to the U.S. Department of Agriculture and traders.
In addition to piling up reserves, the Philippines is striving for self sufficiency in rice supply by the end of 2013.
"Our target is to increase our inventory to ensure food security and stable prices," said Orlan Calayag, an administrator at the National Food Authority. "We are prepared to spend more to improve and expand our storage facilities."
- Ag futures ended the week in decidedly mixed fashion
- Pinnacle Agriculture, Tecomate Wildlife form alliance
- Ag markets remained quite mixed at noon Friday
- California pays the price for Corn Belt’s cold snap
- Seed treatments strongly recommended for 2014 wheat crop
- Oregon GMO labeling measure certified for November ballot