Like the hamster, Chinese officials are compulsive food-hoarders. They stash so much grain away in warehouses that the country often imports grain when it is actually producing more than it needs.
Last week, China's Academy of Agricultural Sciences (CAAS) released its first ten-year projections of commodity supply and demand for the next ten years. The main feature that emerges from the blizzard of numbers is hamster-like compulsive stockpiling of grain. CAAS projects that carry-in stocks of wheat, rice and corn will rise from 217 million metric tons in 2014 to a plateau of 300 mmt from 2019 to 2023. CAAS thinks that China will add over 80 mmt of grain to its inventories over the next ten years!
In 2014, CAAS anticipates that the country will produce 5-percent more grain than it consumes -- a surplus of about 20 mmt -- yet they think China will import 10 mmt of grain that year. In effect, China will be importing grain to sock away in warehouses. CAAS expects the grain surplus to shrink and turn into a deficit of 18 mmt by 2022. Imports will be slightly less than the annual deficit in those years.
Why does a hamster feel compelled to bury hoards of food when his owner fills his bowl daily? It's probably a tendency programmed into his DNA by ancestors who needed a cache of food to carry them through winter months. In the same way, the Chinese have a hamster-like hoarding instinct that is out of step with today's reality.
In effect, China sucks grain out of markets to ensure its own "food security." This sends inaccurate signals of scarcity to the market and undermines global food security.
The CAAS professor chairing the meeting where the projections were released explained that the forecasts are "scientific" numbers that guide markets. Perhaps the most valuable contribution of the numbers is that they give the outside world a clue about China's grain-storage obsession. Observers should not infer that China is short of grain when it imports.