How the Chinese factor explains global food inflation

The global food crisis did not happen in the blink of an eye. Some are tempted to explain it away as a result of the Russian invasion of Ukraine. Food price inflation, which is felt in all parts of the world, is one of the most obvious effects of the problem. The risk of shortages tends to worsen with the threat of crop failure due to fertilizer shortages. A reflection wrongly treated as one of the consequences of the war started by Vladimir Putin.

In September of 2020, this column warned of atypical imports from China. The communist regime was advancing with unusual ferocity on food stocks. It was evident at that time that, in addition to the country facing severe weather phenomena (droughts and floods in different parts of its vast territory), there was also the pressure caused by the loss of millions of pigs that had to be euthanized because of a veterinary disease. .

The phenomenon was explicit and made the Brazilian agribusiness happy, which sold more than ever with the dollar exchange rate soaring. China has never been loved as much as at that moment.

Exactly past 19 months, in September of 2021 , China made another move. With its silos and warehouses crammed with grain, the Chinese regime has drastically reduced fertilizer exports. The largest fertilizer producer on the planet cut exports of the input by 66%. In an operation disguised as customs inspections, which is actually a maneuver to drastically restrict exports.

While cutting the supply of inputs to markets like Brazil, for example, China found itself in comfortable position of those who emerge from an imminent food crisis, in 2021, to the owner of the largest food stocks on the planet.

In December of 2021 ), according to surveys by the US Department of Agriculture, China had already stockpiled more than half of all grain available for world food. At this time, it is estimated that Chinese stocks are close to 69% of the entire global corn reserve, 60% of rice and 51% of the wheat.

Chinese gluttony was visible, but instead of understanding and worrying, everyone just tried to commemorate the flood of dollars into the pockets of producers. Over the past five years, Chinese grain imports have grown up to 12 times, depending on type and origin. Meat imports in 2021 were five times higher than in 2017.

“The Chinese people’s rice bowl must be firmly kept in their own hands,” said dictator Xi Jinping, to explain the aggressive move.

On top of a mountain of food, the Chinese watch global consumption outpace production and Western stocks dwindle at a rapid pace. worrisome. Just to name the United States, its grain production and inventories are predicted to be at the lowest level since 2014.

The food price index released by the Food and Agriculture Organization (FAO), of the United Nations, reached a historic record this year, beating the previous record, which is 2011.

The war in Ukraine had a negative impact on food prices, but the food crisis has its origins in another war. Xi knows better than anyone that his countrymen cannot accept a decline in their standard of living, which in the very recent past has been marked by hunger and deprivation. Something that for the Chinese Communist Party is part of the long string of humiliations that China’s “enemies” have imposed on the Chinese regime and people.

Did Xi know that, combined with the suspension of exports of fertilisers, their staggering food stocks and the collapse of logistics chains would lead the world into shortages and inflation? If so, why is no one else paying attention to these movements?

China’s misconduct in the Covid pandemic-19 should have taught Western leaders about the obligation to, in addition to observing, interpret Beijing’s gestures. Not every war is fought with weapons as in Ukraine.

The Chinese Communist Party is fighting theirs. A battle that is not limited to the survival of the regime and the benefits of its leaders. And the enemy, rival, opponent, competitor (call it what you want) is in the West.

When you go to the supermarket and feel the price salty or the lack of a product on the shelf, remember : he did not simply disappear. It is in the silos and warehouses in China.

Back to top button