China currently has huge amounts of grain and other raw materials in stock. That is becoming a problem for the global trade balance, said Gregg Doud of the United States Trade Representative (USTR).
According to Doud, China controls 47% of the world's wheat supply. These supplies are expected to continue growing, reaching more than half of all world supplies by 2022. Chinese farmers are motivated to produce more wheat and are paid almost €300 per ton of grain ($10 per bushel). This is to ensure that the country self-sufficient can become.
In addition, China is said to have stockpiled approximately 40% of all corn stocks. This while the International Grains Council (IGC) announced that global corn stocks are firm will go down.
Fewer soybeans
When it comes to soybeans, China has fewer stocks. This is mainly due to the fact that a lot of soybeans are consumed in the country, due to the growing livestock sector. However, at around 22% of the world's supply, there are still huge stockpiles. The country also continues to expand these stocks. The country is expected to set an import record of more than 100 million tons next season.
These stocks cause problems and also saturate the markets. “China's disregard for fair trade is costing farmers worldwide dearly,” Doud claims. It led to the USTR going to the World Trade Organization (WTO).
Sneaky practices
Furthermore, China was described by Doud as "a country that has many sneaky practices". For example, China has not made it clear to the WTO since 2010 how high its agricultural production is. In addition, the relationship between the United States and China is currently in dire straits due to several reasons import duties.