Saturday, February 1, 2020

Officials Wary of Food Supply Crisis Amid Epidemic

Chinese officials are working to avert a food supply crisis in the midst of the coronavirus epidemic that has closed down transportation, kept workers at home, and idled production plants. News media have been ordered to report plentiful food reserves and normal functioning of markets to head off panic-buying.

The country's Administration for Food and Commodity Reserves held a January 30 video conference emphasizing the urgency of food-supply and price-stabilization as "the most urgent political tasks." Leaders instructed provincial and city officials to:
  • release reserves of grain as needed and to inject rice, flour, and cooking oil into city markets to prevent shortages, panic-buying, or spikes in prices
  • set up emergency food supply programs
  • monitor and report supplies and prices on a daily basis 
  • resume food production at "backbone" rice, flour, and edible oil processing companies 
  • move food into cities to prevent shortages, panic-buying and price spikes. 
  • use news media propaganda to "stabilize market expectations" 
Officials were told that Xi Jinping had held many meetings on the coronavirus epidemic and had issued many important directives on prevention and control (no mention of Premier Li Keqiang who was made point man on the coronavirus according to reporting from some news media last week). The officials were told that this is the most critical and urgent time for both disease prevention and food market stabilization. Communist party members and leaders were exhorted to play their role as "pioneer models," be disciplined, pragmatic, work hard, and be a good example. Officials were ordered to prevent grain that fails to meet food safety standards from entering the market, an oblique acknowledgment that government reserves hold large quantities of grain contaminated with heavy metals and mold.

The same day as the videoconference, official news outlet Xinhua issued an article assuring the public that China's grain reserves are plentiful, cities have reserves of rice, flour and cooking oil to alleviate any shortage, and there's no reason to panic. The food reserve bureau's deputy director assured readers that the country had capacity to process 1.5 million metric tons of rice, 800,000 metric tons of wheat, and 700,000 metric tons of edible oils daily, and the governor's grain responsibility system ensures adequate supplies to each locality.

According to Xinhua, State-owned COFCO is among 20 companies and units that can supply Wuhan--the coronavirus epicenter--with 200 metric tons of rice, about 50 tons or flour and 300 mt of cooking oils daily. A subsidiary, COFCO Biotech, is supplying 365 tons of alcohol for medical use to the cities of Shenzhen, Suihua, Zhaodong, and other cities. COFCO Biotech will also supply 922 tons of fuel ethanol to Wuhan, Xiaogan, and Huangshi cities in Hubei Province, Xinhua said.

Provincial and city news outlets dutifully issued stories about plentiful reserves, calm markets, and processing plants gearing up operations. A local news media outlet in Shaoxing--a city in eastern China's Zhejiang Province--reported that there had been incidents of panic-buying of rice and instant noodles at local supermarkets last week. Shaoxing Daily assured readers that there was no reason to panic since the local development and reform commission said reserves were adequate and had strengthened daily monitoring of food markets. The reporter's visits to supermarkets, wet markets and wholesale markets showed calm, orderly operations and stable prices. According to Shaoxing Daily, the local government has 4000 metric tons of rice reserves, 131 emergency sales outlets, and 19 processing plants with 1,760 metric tons of daily processing capacity.

The Xinhua outlet in Nanning, capital of Guangxi Province, showed videos of supermarket with shelves full of vegetables, fish, pork, and jugs of cooking oil. The camera lingered on sale price tags of RMB 4.99 per 500g for cucumbers and RMB 55 for a 5-liter jug of cooking oil but panned quickly across the meat counter where small tags indicated high prices of RMB 46-71 per kg. for various cuts of pork. A customer remarked prices were the same as usual. A supermarket worker said there was no reason to worry since the store receives multiple deliveries of vegetables and three pig carcasses daily, and never runs out of chicken, duck, or fish. A Wal-mart employee in Nanning told Xinhua the store hopes to fulfill its customers needs and showed bags of vegetables and a full shopping cart. Wal-mart's pork prices were RMB 35-45 per kg. The video also showed a poster in illustrating sanitation procedures, emphasized that the Wal-mart store is disinfected daily, and showed customers having their temperatures taken at the store's entrance. Customers and workers were wearing masks.

Before the coronavirus epidemic struck, pork supplies were the priority concern for Chinese authorities after an African swine fever epidemic decimated pork supplies in the second half of the year. In August 2019, Vice Premier Hu Chunhua proclaimed stabilization of pork supplies as an important political task, prioritized ensuring pork supplies during this month's spring festival and upcoming political meetings in March, and called for "guidance of public opinion." Guangxi Province planned to sell 1900 metric tons of frozen pork from reserves during the January holiday at a price of about RMB 32 per kg.

1 comment:

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