Record "Irrational" Farm Commodity Reserves Sold in 2018

Disposal of "irrational reserves" exceeded the target set for 2018 according to a document issued by the Administration of Grain and Commodity Reserves. China sold off a record-high 132.73 million metric tons (mmt) of grain, oilseeds, and cotton from reserves during 2018, reflecting mainly 100-mmt of corn. Rice and wheat reserve sales combined for less than 18 mmt. China's grain reserve corporation declared the destocking task for soybeans, rapeseed oil, and cotton reserves "basically complete."

Sales of China commodity reserves during 2018 (million metric tons)
Corn	100.13
Rice	17.00
Wheat	10.66
Soybeans	2.01
Rapeseed oil	0.42
Cotton	2.51

China's Grain Reserve Corporation purchased 26.56 mmt of rice and wheat at minimum prices during 2018, according to figures announced by the corporation's general director and communist party secretary at a meeting reviewing the year's grain reserve work held in Beijing. Minimum-price purchases equaled 7 percent of the 360-mmt total of all grain purchased by enterprises last year and 4 percent of the 657-mmt of grain produced (according to estimates released in December by the National Bureau of Statistics).  Rice and wheat are the only commodities that have minimum price purchase programs. (The amount added to government reserves through other types of purchases was not revealed. The report did not account for the residual 297 mmt of grain produced but not purchased by enterprises.)

Policy-type purchases were made at 11,248 depots across the country using a bank card payment system to ensure farmers are paid and to avoid issuance of IOUs. Brokers with unpaid debts to farmers were banned.

Summary of China 2018 grain production and purchases (million metric tons)
Grain produced	657
Grain purchased by enterprises	360
--purchased at minimum prices	26
Includes cereals, beans, soybeans, dry weight of tubers.

The Administration of Food and Commodity Reserves will conduct a nationwide check of the quantity and quality of policy-type grain reserves beginning in April 2019. The check-up is to determine the "true reliability" of reserves and to "prevent and mitigate hidden risks" and to "ensure national food security." Pilot check-ups were carried out last year at 20 locations in 10 provinces.

The grain reserve corporation reported that a 3-year construction project to build the largest reserve-processing-logistics grain base in northeastern provinces to support the "north-to-south grain transport" initiative became operational in December.