China urges food companies to boost supplies on fears of further COVID-19 disruption
Naveen Thukral and Hallie Gu, Reuters
May 17, 2020
SINGAPORE/BEIJING (Reuters) - 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.
“There is a possibility of a breakdown in supply pipelines due to the coronavirus infections. For example, a port of origin or destination might shut down,” said a senior trader at one of China’s leading food processors, which was on a call last week with authorities to discuss purchases.
“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.
A second source in China who was briefed by a person who attended one of the meetings said China’s Ministry of Commerce met with some state companies on Tuesday to discuss how to guarantee supplies during the pandemic.
“One of the main concerns is how the epidemic in South America might impact supplies (of beans) to China,” the source said.
China’s Ministry of Commerce did not respond to a fax seeking comments on plans to increase food stocks.
SOY SHOCK ...