China Economic Review: Ensuring the Resilience and Safe Transportation of the Grain Supply Chain | Grain | Resilience

The haze of this year's COVID-19 epidemic has dissipated, but the Black Sea food transport agreement has been interrupted, the periodic recurrence of El Nino phenomenon has triggered extreme weather, food trade protectionism has risen, and the global food supply chain is again facing the risk of rupture. As a major importer of grain, whether China's grain supply chain resilience and security level can withstand shocks and ensure import security has become a focus of attention.

Throughout the history of human development, the food crisis has always been a constant shadow. Extreme weather, trade protectionism, and war, any factor can potentially trigger food security issues. This year, the overall global food supply and demand have been tightly balanced, but the factors that triggered the global food crisis have reappeared. The Black Sea Grain Transport Agreement has been terminated, and Ukrainian grain has once again withdrawn from the global food market; The El Ni ñ o phenomenon triggers extreme weather, and some major grain producing countries face the risk of reduced production; Countries such as India, the United Arab Emirates, and Russia have banned rice exports, affecting the stability of global rice supply. Various factors are intertwined, and the World Food Programme predicts that over 345 million people worldwide will be in crisis level food insecurity by 2023, of which 43 million are just one step away from famine. How to cope with the global food crisis has become an important issue faced by many countries.

Moderate import of grain is an indispensable means of adjusting China's grain supply and demand relationship. China is a major producer and consumer of grain, and has always attached great importance to grain production. It has achieved basic self-sufficiency in grain production and absolute food security through continuous years of abundant harvest and inventory. However, structural contradictions between supply and demand still exist, and it is necessary to adjust the surplus and shortage through imports and optimize the supply structure. Faced with the turbulent international environment, the instability, uncertainty, and insecurity of China's grain imports are becoming increasingly prominent. It is urgent to enhance global supply chain management capabilities, improve the resilience and security level of the grain supply chain, and cope with shocks and pressures.

Improving the resilience of the global food supply chain is essential to ensure that food is "affordable". In the face of the uncertain international trade environment, it is necessary to establish and foster diversified partnerships among governments, international organizations, chambers of commerce associations and enterprises, strengthen in-depth cooperation with the food industry chain supply chain of countries and regions along the "the Belt and Road", establish a diversified food cooperation mechanism, promote the diversification of import sources, effectively reduce excessive dependence on a single country or region, and avoid food import security risks. Taking rice as an example, China's rice imports mainly come from countries such as Vietnam, Thailand, India, and Pakistan. Last year, India implemented a rice export restriction policy, and as early as October last year, China began to reduce India's rice imports and seek alternative food sources. According to customs grain import data, the import volume of rice in China significantly decreased in the first half of this year, while the import volume of wheat increased significantly, effectively offsetting the adverse effects of the decrease in rice import volume.

To enhance the resilience of the global food supply chain, it is necessary to ensure that food can be transported back. The current intensification of competition among major powers and continuous regional conflicts have become important factors affecting global food transportation security. The United States is a maritime hegemonic country that firmly holds control over global maritime transportation hubs such as the Panama Canal, the Strait of Gibraltar, the Suez Canal, the Strait of Hormuz, the Strait of Mandela, and the Strait of Malacca. Since the outbreak of the conflict between Russia-Ukraine conflict, the United States and the West have pursued maritime hegemony, imposed trade sanctions and shipping embargoes on Russia, prevented Russian grain exports, and seriously threatened the security of the world food supply chain. To ensure the safety of food transportation, China needs to continuously promote cooperation in international transportation, work together with other countries to strengthen global logistics infrastructure construction, and establish a diversified three-dimensional transportation network integrating railway, sea, and air transportation.

The resilience of a country's global food supply chain reflects its ability to resist risks and shocks. The better the toughness, the less likely brittle fracture occurs, and the greater the impact strength. From historical experience, the resilience of the global food supply chain has withstood numerous shocks, and in the future, we will continue to strengthen the security, stability, and sustainability of the supply chain, fully ensuring the security of food imports.